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I received a question concerning a previous post, “Adwords Sticker Shock“, asking if I had found a solution to the ever increasing cost of advertising on Google Adwords.

The short answer is yes.

Now for the longer explanation, or is it a qualification? Actually, the answer can be found in the title of this post — only pay what the click is worth.

I’ve found that some campaigns that were profitable just a year ago advertising on Adwords are no longer profitable this time around. In one case, it’s not so much that the Adwords CPC is that much higher, but that the conversion rate has plummeted for the merchant. I emailed the affiliate manager and she confirmed that sales are down.

It just astonishing how far down they are. I don’t have exact numbers, but it has to be close to %90 down because I’ve only made a handful of sales compared to quite a few sales made this same time last year.

So rule number 1 - drop a poor converting program like a hot potato. It will just burn up precious PPC spend.

On the other hand, an offer that did well last year is doing even better this year. Much of that success can be directly attributed to a commission bump I received from the third-party affiliate manager just prior to the start of the busy season.

Just a small increase in commission or drop in CPC can be leveraged into sizable gains in revenue.

And then there’s the eBay affiliate program, which continues to confound me. I recently developed a dynamic landing page script that allows me to blast out loads of eBay niche product campaigns at a lightning quick pace. Most of these campaigns get little traffic and my daily spend is under $20. However, I’m upside down in every niche I’ve blasted so far and I’ve blasted more than 20 in the past 3 weeks.

The calculation I did several months ago when first promoting eBay as an affiliate is still holding steady at less than .01 CPC just to break even based on the EPC for the eBay affiliate program. Yeah, I don’t know why I continue to waste my time and money on promoting eBay via Adwords, but it’s just too tempting. There are just so many products available on eBay you would think I could hit on a winner eventually.

As you can tell, I’m primarily focused on Adwords for my PPC campaigns. I’ve dabbled with both MSN Adcenter as well as YSM, but have been disappointed in the traffic I’ve received every time I dabbled. I’m sure there’s a sweet spot for certain products and demographic combos or both, but I have yet to find it. I also can’t focus on more than one PPC search engine at a time and if I’m going to do PPC at all, then it might as well be with Google.

As for second and third-tier PPC search engines, well, I really don’t need the headaches of worrying about click fraud and crap traffic.

Speaking of crap traffic, I have been getting relatively cheap clicks for certain niches on the Adwords Content Network. Combined with appropriate offers, this can be a profitable combo. However, some of the clicks on the Adwords CN are just as pricey as what you’ll find on its Search Network counterpart.

Bottom Line - affiliate marketing using PPC can be quite profitable.
Caveat -  it takes a lot of unsuccessful campaigns in order to find just 1 profitable one and what was profitable just last year or only a few months ago, may not be so tomorrow.