Anyone that has surfed the net has seen the multitude of “get rich now” websites, landing pages, articles, blogs, and the list goes on, in fact in a search in Google for “make money with Adwords” there are over 200,000 pages and I am sure if you substitute ‘make money’ with ‘get rich’ etc there will be millions more. As with all of the get rich schemes on the web, part of the mind pushes this aside as all hype and wishful thinking, but the other part of us says ‘what if?’
It is this ‘what if’ factor that drives not only Google’s mega cash flow and a tsunami of eBooks, but the hopes of millions of Internet users looking to get wealthy from the Adwords ‘money machine’. The thing that anyone new to the online business will inevitably ask is ‘How do I make money with Adwords? It seems so complicated!’’ The answer is similar to that of ‘How does a lion eat an Elephant?’ – Just taking one bite at a time.
To the newbie in the world of business on the internet this can still be a bit intimidating. Mostly because when one thinks of “Adwords”, they think of money, and not receiving it but spending it to advertise themselves and that can be daunting. The old saying ‘you have to speculate to accumulate’ could have been written for Adwords but remember some of the most successful people on the web use this Google tool to make millions, and if we play it right… so can you and I and here is how I know that..
After military service I began a career in sales. I moved onto to training sales people and then owning businesses that were involved in selling, generally in the stock and commodities markets. One of these businesses reached a total volume of business over $300mn and all that business was based on a simple philosophy we used to call ‘The Numbers’.
Let me explain (and I promise this is Adwords related) – every sales person or business has a number. That may be the number of people that need to walk in the door before they make a sale, the number of mail outs they need to get people walking in the door, whatever it is each sales person has a number and the average of those numbers is your company number. Bear with me…
In the 90’s we were still working on mail shots. Each letter, designed, printed, stuffed, addressed and sent, including the list of original potential buyers to send them to was approximately £0.50 in total. Typically we would send out 50,000 at a time. Now out of 50,000 mails shots I knew that I would get these results:
Out of 50,000 mail outs 500 would return the prepaid slip showing interest. Out of 500 people showing interest 50 would buy now, and out of the remaining 450 at least 50 would buy in the following three months. The average transaction would be £3000 with the average commission being £600.
So here are the costings: The mail shot would cost $25,000 and over 3 months of business from this marketing exercise we would make £600 x 100 = £60,000. On this piece of marketing, therefore, we would make £35,000. After salesmen commissions that was about £25,000 profit, not including any further business done with those clients.
These, therefore, were our company numbers. We knew that whatever we spent on marketing we would double in profits. So why wouldn’t we just keep spending and make millions? Well we did give it a good go but the problem with any physical business is product, manpower, office space and managing all that, it is doable but the profit level is not linear when you begin to grow.
How does this relate to Adwords? Well think of Adwords as your mail shot and the clicks your ad gets as people returning the slip and your landing page as your salesmen. Basically, making money this way is just like finding your numbers as a business or salesman, except with the Internet your products are endless and your potential customer base huge. The key to the game is finding the right product, the right sales pitch, the right keywords and the right price paid for the clicks you receive on your adverts.
Let’s assume you have done this and all things are gelling, if you were making $1 of profit for every dollar spent on Adwords, you will be a very rich person if that is sustained. Is anyone doing it?
In the next post in this series we will go into more depth about who is making the money, how they are making the money and how you can too.
If this article interests you and you don’t want to miss the next one, sign up for the RSS email at the top of the sidebar.
Regards
David
@themarketmaker
It is this ‘what if’ factor that drives not only Google’s mega cash flow and a tsunami of eBooks, but the hopes of millions of Internet users looking to get wealthy from the Adwords ‘money machine’. The thing that anyone new to the online business will inevitably ask is ‘How do I make money with Adwords? It seems so complicated!’’ The answer is similar to that of ‘How does a lion eat an Elephant?’ – Just taking one bite at a time.
To the newbie in the world of business on the internet this can still be a bit intimidating. Mostly because when one thinks of “Adwords”, they think of money, and not receiving it but spending it to advertise themselves and that can be daunting. The old saying ‘you have to speculate to accumulate’ could have been written for Adwords but remember some of the most successful people on the web use this Google tool to make millions, and if we play it right… so can you and I and here is how I know that..
After military service I began a career in sales. I moved onto to training sales people and then owning businesses that were involved in selling, generally in the stock and commodities markets. One of these businesses reached a total volume of business over $300mn and all that business was based on a simple philosophy we used to call ‘The Numbers’.
Let me explain (and I promise this is Adwords related) – every sales person or business has a number. That may be the number of people that need to walk in the door before they make a sale, the number of mail outs they need to get people walking in the door, whatever it is each sales person has a number and the average of those numbers is your company number. Bear with me…
In the 90’s we were still working on mail shots. Each letter, designed, printed, stuffed, addressed and sent, including the list of original potential buyers to send them to was approximately £0.50 in total. Typically we would send out 50,000 at a time. Now out of 50,000 mails shots I knew that I would get these results:
Out of 50,000 mail outs 500 would return the prepaid slip showing interest. Out of 500 people showing interest 50 would buy now, and out of the remaining 450 at least 50 would buy in the following three months. The average transaction would be £3000 with the average commission being £600.
So here are the costings: The mail shot would cost $25,000 and over 3 months of business from this marketing exercise we would make £600 x 100 = £60,000. On this piece of marketing, therefore, we would make £35,000. After salesmen commissions that was about £25,000 profit, not including any further business done with those clients.
These, therefore, were our company numbers. We knew that whatever we spent on marketing we would double in profits. So why wouldn’t we just keep spending and make millions? Well we did give it a good go but the problem with any physical business is product, manpower, office space and managing all that, it is doable but the profit level is not linear when you begin to grow.
How does this relate to Adwords? Well think of Adwords as your mail shot and the clicks your ad gets as people returning the slip and your landing page as your salesmen. Basically, making money this way is just like finding your numbers as a business or salesman, except with the Internet your products are endless and your potential customer base huge. The key to the game is finding the right product, the right sales pitch, the right keywords and the right price paid for the clicks you receive on your adverts.
Let’s assume you have done this and all things are gelling, if you were making $1 of profit for every dollar spent on Adwords, you will be a very rich person if that is sustained. Is anyone doing it?
In the next post in this series we will go into more depth about who is making the money, how they are making the money and how you can too.
If this article interests you and you don’t want to miss the next one, sign up for the RSS email at the top of the sidebar.
Regards
David
@themarketmaker
TheMarketMaker
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