When Do You Measure The Cost Of Pay Per Click
All to often we take a very black and white view of things. If a product sells for a $100 with a $50 profit, and we know pay per click conversions run at 10% (for arguments sake), we can then determine what the maximum cost per click is to stay in profit. But what if your product sells for $20 and the cost per click is $17-$18 (or more) – should you stay in the market?
If you take the black and white approach, then most definitely not. Fortunately, we don’t live in a black and white world, it is in fact brightly colored. So too is pay per click. There are times when paying those high prices may make extremely good business sense – in fact, you may need to if you want to stay in business. Cost per click and cost per sale are not the issue – what you should be determining is the cost per customer over the lifetime of their patronage.
If your business is trading in consumables, or products that customers are always coming back to, then your aim with high cost pay per click is not so much to convert to sales (although that is nice). Your aim is to capture an audience that you can retarget time after time for repeated sales. Email marketing is ideal as is social media marketing. Being able to capture their email address and to have them follow you on Facebook and Twitter is the ideal. A perfect sign up form should now include all three options in one.
High cost pay per click marketing is popular across many niches. Jesse Laffen has an interesting post that is worth following up on related to this issue. Just because the costs are high in pay per click marketing doesn’t mean you can’t make a profit – you just have to measure those costs across extended data.
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