3 Secrets You Must Know Before Advertising Online

Would you like to know how much money you’ll earn or lose, before you engage any type of online paid advertising?

If you’ve ever paid for traffic on line, such as Facebook ad campaigns, Google Adwords, or ran any other type of Pay Per Click campaign, you’ll be happy to hear that there is a way to know how successful you will be, way before you begin.

To some, advertising success online means that you’ve increased company revenues before going broke with your ad budget. To others, it means outspending your competition. No matter your perspective, there are three variables that you must know when advertising online.

  • You must know your customer LTV
  • You must know your EPC
  • You must know when to scale up your budget

Let’s go deeper into each one…

Know your customer Life Time Value (LTV)
Every one of your customers spends a certain amount of money with you. From the first dollar they spend, to the last dollar, you must know this. If you don’t know, take look at your customer’s buying history. How often does your customer pay you on a daily/weekly/monthly/annual basis? Multiply that amount by the number of days/weeks/months/years they stay with you as a customer. For example, if you charge $25 per hour for your services and each customer pays you for 4 hours per week and stays a customer for a year, your formula would be: 25 x 4 x 52 = $5,200. The LTV in this case is $5,200 per customer. This is important to know because it indicates how much you can realistically spend and still be profitable.

Know your Earnings Per Click (EPC)
Your earnings per click is simply the amount of money you’ve earned per person that visited your web site as a result of a paid (PPC) advertising campaign. This is vitally important because if you overspend, you will waste your advertising budget. Yet, if you underspend, you’ll never reach the full earnings potential of your ad campaign. The best way to know your EPC is to track every ad campaign. You must realize that it’s not just about paying for traffic to your web site, it’s about converting that traffic. So simply know how much you’ve spent per click, and divide it by your earnings for those visits, and you’ll get your answer. You must know this number before you scale up any campaign.

Know When to Scale Up Your Campaign
Once you know the lifetime value of your customer, and your earnings per click, you’ll now be ready to identify when it’s a good time to scale up your advertising efforts. If you don’t have the proper information and you scale up on a losing campaign, you’ll lose a lot of time and money. This is the difference between running an ad campaign that you lose 25 cents for every dollar you spend, compared to earning 2 dollars for every dollar spent. If you don’t have an advertising history that reveal these numbers, start a few small campaigns you can track and scale those up as you find the ones that are profitable for you.

Edison Guzman is a marketing expert that shows business owners how to attract, convert and keep more customers so that they can grow their business. This article is part of a presentation delivered to business owners nationwide. It is also the steps taken when delivering services to clients. Everything taught has been implemented, tested, tracked and tweaked for best results. Learn more at HowToAttractCustomers.com

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