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Getting Online Business Profitable - Not your typical FAC (8)

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Hi Hustlers,

My goal is to get one of my online (service based businesses) profitable using paid traffic (adwords first), display and then other mediums like Bing/Yahoo or even Facebook. I hope i can tap into the wealth of experience here on STM to accelerate the process and for motivation.

I currently have a site which sells a service in the legal arena. The service has no issues in being advertised on Adwords, so no issues in getting banned or anything like that (knock on wood)

My goal is to get the service profitable on Adwords using search, then bring it over to the display network, find profitable placements, then purchase media directly from those placements to diversify traffic sources.

The average CPC in this niche is around $2.00-$4.00 for keywords (Search)

Transaction value is around $100-$120 and cost around $40.00

So i have about $50.00-$60.00 to play with for traffic, before it becomes unprofitable. My goal is around $30.00 profit per transaction, so that leaves $20.00 to $30.00 to spend on obtaining customers.

Just thinking about this from a maths perspective it might be quite difficult to get profitable using Adwords (search) e.g.
$30.00 Traffic Spend @ $3.00 CPC = 10 clicks so a 10% conversion rate which is quite high. From past campaigns it has been around 3%.

I might check out Facebook. It could be a goldmine in terms of low CPCs for this service due to lack of competition, however my thinking however is to get information and data as fast as possible using Google Adwords (search), test, test, get the conversion process down, then bring it over to other media. Even if i'm breaking even or getting a slight negative ROI due to high bid prices on Adwords, i would accelerate the process to success since Adwords is the best and fastest testing ground. Then take it to other traffic sources and mediums.

I may also be able to improve conversion with better marketing, testing (i'm using Unbounce) and copy be able to push the transaction value higher to $150-$160 which should give me more room to spend on traffic.

I know it can be done as competitors in the niche which have old sites with lower transaction values, and mediocre marketing have been advertising for quite a while. So there is money to be made.

Also they lack message to market match. E.g. the vertical has different types of sub niches, and most advertisers are targeting broad based (i.e if someone is searching for sport car insurance, most competitors landing pages are on car insurance for this keyword, whereas my page will be on sports car insurance).

My sales funnels is also different, i'm capturing the persons information before they see prices. So if they don't buy straight away (i doubt most will), i can market to them via email or possibly direct mail.

One issue is that this service can't really be scaled as it is, since it requires an employee on my end to fulfill the transaction.

So what i want to do is get this baby profitable consistently, basically automated using VA's, diversified with as many traffic sources, etc. I know it's reasonably safe, I'll be happy with $500+ a week and then invest the capital into more scalable ventures. Business A --> Gives Capital To Build Scaleable Business B --> Etc.

Action Plan
I recently had created a page on the site which targets a sub-category and are currently sending traffic to that via Adwords. I've been using broad modifier match and have spied on the keywords a long-term competitor has bidded on with semrush. So i'm basically collecting and paying for data to determine which keywords will bring me leads. Not sure how much i should spend on this before i declare the landing page unsuccessful?

I also think my ads suck. My ads are too focus on getting the "click" (CTR is around 2%) rather than bringing people who are willing to pay money for the service. It will lower my CTR, but atleast i'm not paying for clicks from people who are not looking to buy.

Also going to create tighter adgroups. Currently have to 11 semi-related keywords in one adgroup. Going to split the lower performing keywords (i.e. low CTR into a new adgroup, and create new ads).

The other problem with targeting sub-niche category i.e. sports car insurance rather than car insurance, is lack of keyword volume, so I'm also currently getting my copywriter to create a new page for targeting keywords in the niche with high volume, high CPCs, and highly competitive. ETA Friday next week. So i can get results and data quicker. Will also be split testing this highly.

Any suggestions, recommendations or criticisms on my approach from what i have written so far, would be awesome.

Thanks for reading!

Summary of process:

Landing pages --> Test large amount of keywords using broad modifier --> Shutdown poor performing keywords or move low CTR keywords into new adgroups --> Improve ads --> Split test LP/Improve Copy and Conversion --> Get campaign breaking even or nearly profitable --> Take to less competitive sources such as Bing/Yahoo, Google Display Network, and possibly Facebook/Linkedin --> Start buying media directly from placements

Tools At My Disposal:
Unbounce
Mouseflow
Heatmaping
GA
SEMRUSH
KeywordSpy

Capital To Invest
Around $40.00 a day or $280 a week.

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Looks good! Very interesting to see a FAC like this.

With that CPC and conversion payout you might have a bit of trouble getting to statistical significance - you'll need about 5+ conversions to be able to say if an ad's paying off for you at all, and more like 10-20 to really get a grip on how it's doing. That's the usual problem with high-payout offers.

Having said that, there's every chance that in a niche like this you'll be able to pick low-hanging fruit to get started and raise your budget pretty quickly afterward.

What's the volume on keywords in your niche like? Is it enough to support scaling the campaign?

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Thanks for the response caurmen!

Yes its definitely scalable from a traffic standpoint, plenty of keyword volume.

However this service requires Human Resources/Employees to match the demand when their is a purchase.

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Hey man looks like an interesting follow along.

Would you like to share your lander or keywords so we could give you feedback on those?

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Hi Mr Green.

As much as i would love too, i rather keep the actual business anonymous for now.

I know this will affect the feedback/learning process, i'll be given but i will try and work around that.

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Are you sure that those are the 'real' CPC prices? Or is that just what the estimator says?



If you segment your campaigns out to all these subniches and have a really great message to market match, then I'm not sure how your competitors could compete with you. Are you sure they aren't charging a more and have backend services? Are they big, rich-ass companies with the $ to spend? I've noticed that many companies run campaigns that don't seem to be profitable because they are so big and have revenue coming from all sorts of different things they do. Not every company treats campaigns like we do (if profitable, scale, else turn off).

But remember, Google search is a pretty fair game. If you are getting better CTR's and conversion rates, and have better relevancy than these big companies, you can overtake them on your keywords.

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Yeah those CPCs are about right, i've spent about $1k already on Adwords in this vertical (half assed) and the main money keywords are around $2-$3.00

Good point on competitors. I've examined the sales process of a couple competitors, i can say the ones i checked out (the ones advertising the longest) don't have any backend, mainly upsells.

Its actually something i want to look into, creating a backend so i can increase transaction size even further and spend money to obtain customers.

I think however the biggest thing i can do for now is to get as much data as possible, get conversions cranking, then take the campaign to other traffic sources with way less competition (There's much less on Bing/Yahoo), media buys, FB, etc.

In terms of the sub niches, the problem is the lack of traffic. Its difficult to test quickly. E.g. last week total impressions for this sub-niche was 1246, my CTR was 2% and total clicks 24, AVG CPC $1.23. I'm targeting with broad match modifier as well. I might go broad, and see if i can increase the data.

Another thing i want to test is including price of the service in the Ad, so i stop getting people who are not currently looking to buy, clicking on my ads, costing me money, and only targeting those who are willing to fold out money. By doing this my CTR is probably going to drop, however i'll be attracting people who are in the buying stage for the service.

What do you guys think?

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Interesting FAC.

What position are your ads displayed?

I'm not a search expert but I do know 2%ctr is not high for well targeted search traffic. You should aim for 5% or higher. It is possible, especially if you are in the top 3 ad position

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