Will wonders never cease?

My contract to sell applications has finally been approved.  We’re rolling forward.  My Lite software will have a few enhancements, based on customer feedback.  My Pro software will go on sale.

Now we’re going to introduce the whole guarantee, coupon, package deal concepts.  Tracking which works and which ones don’t.  Once that’s set into motion, we’ll get into Google Adwords.  Since Google is my payment processor, it only makes sense that I advertise with them.

Google Advertising and their Payment Process (Google Checkout) are a 1 to 10 ratio.  For every dollar you spend in advertising, you get $10 in free payment processing.

Let’s say I’m selling widgets for $40.  To process credit cards, Google charges 2% + $0.20 per transaction.  So for my $40 widget, Google would charge me $1.00 to process the credit card.  If I sold 100 widgets, putting $4000 in my pocket and Google would take $100.

If I use Google Adwords, for every $1 spent in advertising that I get $10 in free credit card transactions.  Instead of just giving Google $100 to process my payments, I use that $100 in advertising.  Then $1,000 worth of transactions are processed for free.

What can $100 in advertising get me?  If my ad-click through costs $0.05 per click that means my little ad will appear in front of 2,000 people when they search for my key words.  Two thousand may sound like a lot but when broken up over a 30 day period it is 60 people a day.  Still if 60 people a day were to give me $40, I definitely wouldn’t complain.

So it’s important to have your wits about you, if you’re doing this.  It’s easy to get nutty and think “If I sell $4000 in a month, then I should spend $400 in advertising!”  Don’t get nutty.  Track everything.

If $100 per month generates $4000 in sales, then I would have spent $167.50 ($100 advertising + $67.50 in transaction fees).

If $400 per month generates $4000 in sales, then I would have spent $400 in advertising + $0.00 in transaction fees.

Ideally would be that my site be listed in the top search results organically.  Then I would spend zero on advertising to get $4000 in sales, which would cost $100 in fees.  That’s the cheapest option of the bunch.

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