How do you measure if PPC is worth it?

[Danjensen]

Do you simply measure.

COST - expected traffic per month multiplied by CPC.
RETURN - Expected sign up rate multiplied by product value


If Return Is greater than COST its worth it.

I know how to get three of the variables just wondered what value you typically put against sign up rate.

Sorry for newb question (and yes I will read the stickys)
Just wanted to ask a quick question until I get round to focusing on it.

thanks

 

[Linda Buquet]

Hi Dan,

By sign up rate do you mean conversion rate? In other words what percentage buys? If so, the average conversion rate across the board is 2% but conversions vary wildly based on a number of factors. After you start getting some sales for a merchant or offer you'd know what the conversion rate is but before hand it may be hard to guess. Sometimes the affiliate manager can give you some idea, but your actual conversion rates could still vary based on your ad, keywords, landing page, etc.

Does that help?

 

[Danjensen]

Thats great thanks linda.

I just needed a starting average number to do the maths.

So
If my ad gets 1000 clicks at $1.38 per click i spend $1380 on ads.

If 2% sign up that's 20 people at $12 = $240

Return is a loss of $1140.

to break even I would need a conversion of 11.5 %

is the assessment that easy?

thanks for the help