It's a new month, so time for a new case study!
For the longest time I've been meaning to run this case study, but I wanted to get all the pieces in line and test it out first before doing anything.
I realized that this was pretty silly though, because the whole purpose of a case study is that you're going to perform an experiment and document the results. Therefore, I've decided today, somewhat spontaneously, to just launch right into this case study and see what happens.
If things work out for the best, it can open up a whole new avenue for revenue for Amazon niche sites, so I owe it to our customers to try and crack the nut.
The Goal – To Use Paid Facebook Ads To Make Money From An Amazon Site
Getting ads to a niche site is nothing new, and using FB ads is equally nothing new. However, this particular model has proven a challenge for many people. Why?
- People are not often in “Buying mode” when browsing Facebook
- Despite FB ads being cheap, Amazon commissions are equally low
While I'm absolutely certain I can make sales using this method, the question remains to be seen; Can I make more than I spend?
I'm going to be undergoing a 4-week experiment and will give a weekly update, same time same place. Get some light reading in before Game of Thrones.
Here are some things that I am already expecting to be the most difficult parts of this campaign, and the reason why I'm planning a 4-week study.
Finding The Cheapest Ads
The first component in this traffic model is getting people to click your ads in the first place. Once you have this, you naturally want to get them as cheap as possible. The economics of a successful PPC campaign are pretty simple:
If your commission is higher than the price of the traffic, you win.
Here's an example of the small margins we are dealing with:
1.) Let's say your average product costs $100 on Amazon. Most people's commission would be $6.5-7.5.
2.) Let's say you need to get 100 visitors to your site in order to get 1 sale.
3.) In order to be profitable, you need to be getting 1 visitor for less than 6 cents.
Under this example, the cheaper you get your visitors, the better.
Finding The Best Converting Ads
Of course, chances are that you aren't going to be able to get a visitor for only 6 cents, unless you are operating in a very specific niche or know something about FB ads that I don't. In this case, what you can do is try to get traffic that converts better than 1%.
Using the example above again, if you can get a 2% conversion rate, or 1 sale for every 50 visitors, suddenly your cost per visit only needs to be 12 cents or less.
Finding The Best Converting Landing Page
You can't drive traffic directly from Facebook Ads to Amazon. I don't know whether Facebook would approve an ad like this or not, but Amazon certainly don't allow it in their affiliate TOS, so forget about it. You need to first send them to your site, where they can click your Amazon link and go earn you some commissions.
Let's say that you have managed to send 100 visitors to your site, and it's cost you 12 cents per visitor. In order to be profitable, you need 2 of those visitors to buy something from Amazon that costs $100 or more.
So if your landing page is good enough to do that, you're in luck.
Making It All Worthwhile
Now, let's assume that you CAN get 6.5% commission on a $100 product, and you CAN get a 2% conversion rate on 100 visitors. Let's assume you DO manage to get those 100 visitors at an average of 12 cents per click. This is how your campaign is going to look:
Ad Spend: $12
Commissions Earned: $13
In the case above, even if you are spending $120 per day on ads, you'll only be making $10 per day for all your troubles.
This is the problem that most people face when running FB ads above.
What I'm Hoping To Achieve
Of course, what I'm really hoping is that I can outperform the example above. Whether that means I get clicks for less than 12 cents, or I get more than 2% conversion rates, or the average purchase comes to more than $100, I don't particularly mind.
I want to create something that is scalable and applicable to multiple niches, so that it can be taught to the rest of you.
I don't want to fluke a profitable campaign because of an anomalous result such as 1 random customer who spends $1,000 on Amazon. These things do happen, so it's important to consider these other factors.
What Else Needs Considering
Because there are three or four stages to this campaign, I need to make sure that even if I don't make profit, I learn as much as I can. It's quite possible that one aspect of the campaign is successful and another is not.
For example, I could manage to create great ad copy and get cheap clicks, only to fail to create the right landing page to match my audience or the product being promoted.
This is another reason why I want 4 weeks to put everything together; it gives me the time to make sure each individual part of the campaign is optimized.
The General Plan – Week 1
Starting from today, (May 1st), I will run FB ads to the site. The plan for this week will not be to worry too much about making money or conversions, but rather to get the cheapest ad spend possible.
To do this I will test several different audiences, different ad copy, and different ad images (something I've seen effects the CTR the most).
I'm aware that the cheapest ads might not necessarily be the best converting ones, so I will make note of the various ads and come back to them all later when testing conversions.
In Week 2, I will be seeing what I can do to get more conversions from my landing page. Assuming I've managed to find a good supply of traffic for a reasonable price in week 1, the next step will be getting them to buy something!
Again, assuming I am getting conversions, I will be testing different ad groups (audiences and ad copy) with different landing pages to see if there is a better match.
For those of you who've not done much conversion testing before, it's important to note that the cheapest traffic or the traffic with the highest ad CTR isn't necessarily going to be the traffic that spends the most on Amazon. It's essential to test different combinations of traffic and offers.
The final week will pretty much be an extension of week 3 and is also a buffer week in case any of the previous weeks overran. It's also a chance to see how things play out over a longer period.
Keeping In Touch
As I said, I will report my findings every week from today. If you're interested to follow along, then check back every Sunday or join our email list. Equally, if you have any insights, questions, or suggestions of your own, leave them in the comments below.
I won't be revealing the site but I may be revealing the niche.