Results 1 to 8 of 8
  1. #1
    Member
    Join Date
    February 20th, 2006
    Location
    Bay Area, CA
    Posts
    110
    How much percentage goes into marketing?
    I am putting ads in Adwords, and Yahoo Search Markeing. I do about 40% on my marketing budget on what I recover with Affiliate Sale. I think it should be around 20% to 30%. I am not yet keyword savvy.

    Was interested in knowing how much percentage of your returns you put in advertising?

  2. #2
    Member
    Join Date
    February 20th, 2006
    Location
    Bay Area, CA
    Posts
    110
    I understand people might be reluctant to share such info but from a newbie point of view, was looking for some pointers. Should I set a marketing budget upfront or base it on sale returns? Would appretiate some feedback. Thanks.

    Added : I am doing some straight sales site and I will be needing PPC conversions.

  3. #3
    Newbie
    Join Date
    February 25th, 2006
    Posts
    10
    Put as much of your turnover as you can afford into marketing a new business. Have you done a business plan? If so, you will have a rough idea what you are going to do in your first year, then allocate a percentage of that to marketing. Obviously, if you are doing much worse, or much better than you expected, you can always change your figures later.

    It is very difficult to give you an actual percentage for spending on marketing, as it all depends on your type of business, other business costs, and many other factors.

    Do remember not to put all your eggs into one basket though - split your marketing budget into several different forms of marketing, and monitor the results, so you know when to drop, or change one.

  4. #4
    The Google-hatesme! Guy
    2006 Winner Lazarus award
    PM Me....
    aahh's Avatar
    Join Date
    May 26th, 2006
    Posts
    36
    If you're advertising directly, there should be no affiliate cut so you should be able to devote somewhat more than you pay your affiliates (assuming that there is some overhead for an affiliate sale due to the cost of attending affiliate-marketing seminars.)

    - Chad

  5. #5
    Newbie
    Join Date
    February 25th, 2006
    Posts
    10
    Forgot to mention - you did say you weren't keyword savvy. Try using Wordtracker to find lots of cheap keywords - it is a lot easier than thinking of them yourself.

  6. #6
    Newbie Lonny's Avatar
    Join Date
    September 8th, 2006
    Posts
    30
    Depends on the product, on the targeting and the conversion - what happens if you bring the right people but your site doesn't do the job - or if you bring the wrong people?

    I had some company claiming that we should advertise on google through them for the keywords: "earn cash" - now how stupid is that? you target audience is 10-80 - and you'll get the clicks either way because they would think that you'll help them make more money even if they don't have a site.

  7. #7
    .
    Join Date
    January 18th, 2005
    Posts
    2,973
    Looks like another older thread being revived, but an interesting topic, so here I go...

    When I'm working as a marketing consultant, I often advise my clients on the proper amount to spend on marketing, or more specifically, how much they can budget for affiliate commissions or PPC bids.

    The answer, as others have noted, is that it depends. The main factor to consider is "gross margin" -- what percentage of the retail price represents "gross profit" (e.g. retail price minus wholesale price or other cost), but there are a number of other factors.

    Typically, most companies will budget 30% to 75% of their "gross profit" for marketing. Thus, if I determine that my company earns a "gross profit" of about 35%, I might budget 20% to 25% of revenue for marketing. If our company earns a very narrow "gross profit" (for example, 10%) then I would probably allocate less, perhaps 2% to 4%. If the gross margin is very high, then it may be appropriate to allocate most of that margin for marketing (hence the ebook merchants who pay 75% commissions on sales).

    The projected "marketing percentage" is not the same as "affiliate commission," of course. Affiliate commissions will usually be lower (to allow for expenses associated with recruiting and supporting affiliates), but might sometimes be higher (if competing merchants offer higher rates that must be matched).

    I never (ever) allow my clients to limit themselves by computing and then assigning a "fixed budget" for marketing. Several years ago, I was running PPC campaigns for a client that earned a gross profit of 35% to 50% on each sale. I budgeted 20% for PPC bidding, and launched thousands of keywords, adjusting the bids for each keyword to the level where every dollar we spent generated five dollars in sales. Our overall PPC spending rose from about $200 per week to about $1,000 per week, and I got a frantic phone call from the client's bean-counters: "We only budgeted $200 per week for this expense, you can't keep spending $1,000 per week." My response was to say, "You also forecast only $2,000 per week for sales, but we're selling more than $10,000 per week. If you want me to cut our PPC spending, then you are also asking me to cut our sales, and our profits." The bean-counter relented, agreeing that we should, in fact, continue to spend money to drive profitable sales. (Of course, there are some practical limits, such as the company's inventory and the staffing of the shipping department.)

    The reverse is true, also. If my client budgets $10,000 per month on PPC bidding, but competitors are insanely outbidding us, we must not pour that money into the drain. In one extreme case, I had a client who saw their PPC spending at Overture (now Yahoo SM) drop by 50% to 80% during the first few days of the month, because a competitor's account would be replenished on the first day of each month, then spend down quickly with a bid of 80 cents per click on keywords that we would not bid past 35 cents. After a few days, the competitor's account would be depleted and our activity would go back up.

    Earlier this year, I had a client (the marketing guy at a client company) who insisted on spending "whatever it took" to have his ad shown first in the Google AdWords list. I pointed out that this was completely wasteful, but the client insisted -- and the bids popped above $1 per click, and some keywords were above $3 per click. After three days, I suspended the campaign, and told the client I would not continue to waste his money in this way. The client went ballistic. But a few weeks later, he complained about how poor a marketer I was, because I'd spend so much money with such poor results -- if I'd continued to follow his instructions, I'd have been fired. (Not surprisingly, that client's inconsistency led me to "fire my client" soon thereafter.)

  8. #8
    Member zx88's Avatar
    Join Date
    October 7th, 2006
    Posts
    176
    Quote Originally Posted by markwelch
    Earlier this year, I had a client (the marketing guy at a client company) who insisted on spending "whatever it took" to have his ad shown first in the Google AdWords list. I pointed out that this was completely wasteful, but the client insisted -- and the bids popped above $1 per click, and some keywords were above $3 per click. After three days, I suspended the campaign, and told the client I would not continue to waste his money in this way. The client went ballistic. But a few weeks later, he complained about how poor a marketer I was, because I'd spend so much money with such poor results -- if I'd continued to follow his instructions, I'd have been fired. (Not surprisingly, that client's inconsistency led me to "fire my client" soon thereafter.)
    that sad...

  9. Newsletter Signup

+ Reply to Thread

Similar Threads

  1. percentage or flat $$
    By SlowCooker in forum Midnight Cafe'
    Replies: 5
    Last Post: May 17th, 2009, 03:43 PM
  2. What percentage of a feed changes, and how often?
    By FourthWorld in forum WebMerge (Fourthworld.com)
    Replies: 34
    Last Post: March 4th, 2005, 12:46 PM
  3. Adsense - What percentage do we get?
    By oranges in forum Other Affiliate Networks
    Replies: 15
    Last Post: September 25th, 2003, 03:30 PM
  4. What percentage with script
    By philr in forum Cusimano.com Scripts
    Replies: 1
    Last Post: September 8th, 2003, 08:11 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •