A little over a year ago, when I first started doing Pay Per Click Marketing on a serious level I made sure that I was tracking clicks and conversions. Doing so allowed me to split test ad copy and analyze my traffic to determine things like:
- Which picture attracted the most clicks
- Which ad was converting best
- Which demographic I was most successfully reaching
That’s all vital intelligence that allows you to dynamically react to and adjust a campaign, but as I gained experience with PPC advertising I realized there was an important proactive question I should have been asking that I wasn’t (not specifically anyway). That question was, should I be running this campaign in the first place?
In Pay Per Click affiliate marketing (and pretty much every other business) your ultimate goal is to make money. If you make more money then you spend, your golden. Of course, “Me make more money then spend” is how a caveman might describe it. We should aim to be a little more precise when defining our objectives. To do that we have to look at all the variables that impact our ability to have a successful PPC campaign.
For me, that entails understanding the various components that make up a campaign, and then defining what success is.
Anatomy of a PPC Campaign
When you promote a product via Pay Per Click Marketing you create an ad and then use a service like Facebook Ads, Google Adwords, or Microsoft Ad Center to get that ad in front of a target audience. Because of this, you can literally get millions of impressions and thousands of clicks a day without any SEO work. It’s like turning on a fire hose.
Getting traffic this way is not free however, as each of the aforementioned services charge you a certain amount every time a user clicks your ad, hence the name Pay Per Click (PPC). Which leads me to my first variable, Cost Per Click (CPC), and the ultimate question I would like to answer:
How much should I spend per click?
The reason why this question is important to me is because I kind of have a feel for how much Facebook charges per click now. I also know what types of conversion rates I can realistically achieve, and how much money I would like to make overall when running my campaign.
By understanding these variables and how they relate, I can quickly determine the minimum Offer Payout I will need to have a chance at being profitable. This lets me instantly rule out offers that look good but don’t pay what I need to achieve my income goals.
Let’s Take A Closer Look At These Pertinent Variables:
- Cost Per Click (CPC)
- Offer Payout
- Conversion Rate
- Return On Investment (ROI)
This is how much your search network (e.g. facebook) will charge you each time a user clicks your link.
How much you will be paid by the advertiser if a user completes the desired action (e.g. provides their email address, downloads a toolbar, makes a purchase, etc.)
This is the percentage of clicks that result in a conversion.
Example: 10 people click your ad, but only 1 person performs the desired action that results in your getting paid. In this scenario you have a 10% Conversion Rate
This is the percentage return you would like to see on your investment overall.
Example: if you spend $100 running your campaign and you make $200, then you made $100 more then what you spent (ROI 100%)
Calculating Max CPC
It’s been famously said that when the great Physicist Stephen Hawking began writing his book A Brief History of Time he was told by his publicist that for each equation he included in his book he would halve the sales. As a result, he only put in one.
With that in mind I will keep things simple by showing you the equation I use to determine Max CPC without taking you through its derivation.
I apologize for the blurriness of the equation. I am using the plugin (WP LaTeX) to render the math which converts the text to a .jpg image.
As you can see, the Max CPC is effected by the Offer Payout, the ROI, and Conversion Rate. Let’s see it in action.
Example: Maximum Cost Per Click Calculation
Consider an offer that pays $2.00 and converts 5% of the time. If my desired ROI is 30% then the most I can spend per click is $0.08 cents.
Since clicks are costing me around $0.40 cents these days on facebook I can quickly see that this campaign is not going to work out for me.
In fact, for a campaign to work for me within the above specified parameters the Offer Payout would have to be $10.50.
In the above example I used conservative estimates to determine what my Maximum CPC should be. But what if I had an 18% conversion rate? How would that effect my Maximum CPC?
A quick calculation reveals that now my Maximum CPC is $0.28 cents. Still not the $0.40 I need to green light this thing but definitely more doable.
If in addition to this, I also increased my Offer Payout from $2.00 to $2.90 then my Max CPC would be $0.40
Translation: By creating an ad campaign that converts at 18% I can target offers with a payout of $2.90 or more and still achieve a 30% ROI provided I don’t pay more than $0.40 per click.
Of course different campaigns will have different goals, returns, conversion rates, and payouts. Being able to quickly ascertain their viability will help you green light or can a campaign before you waste any time building it.
Maximum Cost Per Click Calculator
When I built my house 4 years ago I wanted to have a surveillance camera installed at the entrance. Not for nefarious reasons, but because I just like technology and felt pressing my face up to a peep hole was so two thousand and late. The company I was forced to use wanted to charge me an exorbitant amount for the camera so instead I had them home run the requisite wiring so I could purchase and install a more affordable solution at a later date.
There was a lot going on after the construction of my home, and our corresponding move, that it took me at least a year before I revisited the whole external camera project. After doing some research I quickly learned that the clowns that put the wiring in ran a coaxial cable without a corresponding power line, rendering it useless. Over the years I have looked at a variety of solutions but didn’t want to spend $700-$1400 to get this project online.
Then, earlier this year I noticed Logitech had a system (the Logitech Alert 750e) that retailed for $340. It seemed interesting enough, the reviews were decent but the price was a bit high for my liking.
A little more digging and I found this little gem, the Foscam FI8918W Wireless IP Camera for a quarter of the price ($86.68) and comparable reviews.
Now, it’s not like me to go with a non-recognizable brand like Foscam. Don’t get me wrong, I am not a “name brand” guy, but I do like to purchase from a company that I have some familiarity with for support and warranty issues, but the features and price of this $86 bad boy made it difficult for me to say no. So I didn’t.
Last week I received the camera and promptly installed it.
What I Like About It
- The Price
- It’s Wireless
- It’s an IP Camera
- Pan/Tilt support
- Night Vision
- Two-Way Audio
- Motion Detection
- Web Browser Monitoring and Control
- Dynamic IP Address Support
At $86.68 this thing is super cheap.
Although it also has an Ethernet port for physical connectivity, being wireless means that it can connect to your 802.11b/g network even when an Ethernet jack is not close by.
This is one of its greatest features and means that it connects directly to your network (translation: you don’t need to connect it to a running computer to have it work.)
Unlike my printer which is physically connected to my wife’s computer. When I need to print something I need to make sure her computer is on. :(
Allows you to change the orientation of the camera 300 degrees horizontally, and 120 degrees vertically.
The more expensive Logitech camera is a fixed mount.
Allows you to see in complete darkness (up to 26 feet)
The embedded microphone and speaker enable you to remotely talk and listen to people by the camera from wherever you are on the planet which is crazy cool.
Which can be used to trigger the alarm function that snaps a series of 6 pictures and then emails them off to your gmail account (or other email address). I use it to get notifications when packages are delivered to my front door which is pretty neat.
Since this is an IP Camera it has to be self-sufficient, meaning it can’t rely on software running on a separate computer to function. That’s a good thing!
Since the device itself does not have a keyboard or display, setup, control, and monitoring are controlled via web browser. Just simply launch a browser on your computer (or iPad, or smart phone) and type in the camera’s IP address (Hence the name IP Camera) to interact with it.
Allows you to access your feed outside your home network even if your IP address changes.
The above picture is a snapshot of the browser interface of the Foscam FI8918W Wireless IP Camera. The feed displayed is from my freshly mounted camera. If you click on the picture you will be able to see the actual size of the control panel.
The little blue sphere in the top left allows you to pan and tilt the camera (which happens in real-time). You can adjust the camera’s resolution, turn on/off the Infrared camera, adjust brightness and contrast, and enable auto pan and tilt mode which keeps the cameras eye roving around.
This is another picture taken at night to demonstrate the night-vision capabilities. There is a street light off in the distance which is casting light toward the top of the image so what you are seeing is a bit of a hybrid night-vision shot.
Mobile Phone Support
Since the controls are browser-based you can access them from any web browser. I found a nifty application called IP Cam Viewer which is a bit easier to manage on my phones diminutive screen and allows me to not only see and control my camera from anywhere, but also listen and talk through it, even if I am in another country or state. Above is the feed viewed from my Droid X using IP Cam Viewer.
The program is free, but I loved it so much I splurged and paid the $4.99 to remove the ads and support the developer. This cool little app is also available for iPhone and Blackberry and is a worthwhile download even if you don’t have a camera as it allows you to see feeds from a list of beach and traffic cameras.
This short video I created gives you an idea of what the video stream looks like through the browser interface. I also geek-out a bit and show you how I am able to control and interact with the camera through my phone. Nerd alert!
Note: I intentionally recorded the web browser interface at its original size so you could see the actual size and shape of the view port provided by the browser interface. As a result it only takes up a small portion of the youtube video screen (hence the abundance of grey surrounding the image). To really get a feel for the camera’s image quality the video is best viewed at full screen and at 720p.
Setup and configuration of the Foscam FI8918W is contained in the Device Settings tab. Here you can adjust all elements of the camera. The user interface is similar to what you see when you setup a router or DSL modem. So if you have experience setting one of those up, you will be right at home here.
External Video Stream Access
Getting the camera to work outside your network requires that you to do a little port forwarding magic, and if your IP address is dynamic (that is, a new one is assigned to you every time your DSL modem is reset) then you will also have to configure the DDNS (Dynamic Domain Name Server). Thankfully the FI8918W supports this and Foscam provides step-by-step instructions for setting it up using the free service provided by dyndns.com.
UPDATE: dyndns.com is no longer free. With that said, I have been using them for over a year and am very happy with the service and reliability they have provided me. I don’t get it for free (I’m a paying customer as well).
If you decide to go with them this Coupon Code: RFE3ZKBAHP will save you 15% off new non-enterprise DNS/Email Delivery services (New Customers Only) and I will get a 30% voucher to use in the next year on any new/renewed service.
Sounds like a win-win to me! :)
To take advantage of the motion sensing and alert capabilities you will have to enter your outgoing email credentials into the device and if you want pictures sent you will have to have access to an FTP server. If you have a blog hosted on a provider like Host Gator you will already have access to this so it will be just a matter of entering in the appropriate ftp server address and login credentials to get this working.
Once properly configured you will receive an email with a series of six pictures anytime motion is detected. You can adjust the sensitivity as well as the time (in seconds) between snapshots.
Collecting all the right information and entering it into the requisite fields can be tedious but once you have it properly configured the results are certainly gratifying.
Maybe I’m a geek, but I find it super cool to be able to check my porch for packages, or receive an email snapshot of the person ringing my door bell when I am out and about.
Best of all, there are no monthly fees associated with this camera’s use, nor does it require a running computer to work. Once setup, plug it into a power source within your network’s range and rock and roll!
Anyway, that was my latest personal project. I realize it’s a bit off-topic but computers and electronics are a big part of my life. I was really excited about this purchase and thought it would be cool to share. Thanks for indulging me. Now tell me what you’ve been up to.
A lot of people have asked how they could embed the live video feed from their Foscam camera into their blog or website. The good news is that it’s not too complicated.
To make it even easier (and eliminate human error), I slapped together a little script that will automatically generate the code you need for your camera feed. Check out the post entitled How to Embed Video from Your Foscam FI8918W Wireless Camera Into Your Web Page.
I have placed this in my new blog where I will focus on technology and other geeky endeavors.
Foscam used to have two really important documents on their site that don’t appear to come with the camera (unless I missed it on the installation disk). In any event, I found the FI8918W Quick Installation Guide and FI8918W User Manual before they were removed. I have uploaded them to my site as they are extremely detailed and a great reference.
I just added another auto-code generator that will allow you to quickly embed multiple foscam camera video feeds into a single webpage.