PPC Profit Can You Be Profitable In Any Niche?

Dukeo » Marketing » Traffic Generation » ppc profit
Traffic Generation2 min read

It’s the question that everyone’s asking – especially those who are totally new to PPC: Can PPC be profitable?

It might seem like a really silly question to those already involved in PPC, but when you consider that some keywords cost upwards of $10 per click, and conversion rates are very low, it’s a question that’s well worth asking.

In this article we’re going to look at two examples – one where despite a high cost per click (CPC), PPC can be very profitable. The other example will look at a niche where there’s a relatively low CPC, but making a PPC campaign profitable can be extremely difficult indeed.

Join 12,003 bloggers taking my FREE Course: How to Start a Money-Making Blog in 7 Days»

Example 1 – Car Insurance

The first example we’ll look at is car insurance.

At the time of writing the average CPC for this keyword is a little over $10.

That means if you advertise on the Google AdWords search network and someone clicks your ad for car insurance, you pay $10, regardless of whether that person “converts” into a sale or not.

Conversion rates on insurance based keywords are relatively low due to the amount of competition out there.

Remember people are always being told to shop around for insurance – this is why bounce rates are high.

So let’s say that the keyword “car insurance” has a 5% conversion rate – that means that only one in every 20 people who click through are going to “convert” into a sale.

That means for each sale made, the advertiser has paid over $200.

Of course this looks like an obscenely high figure for people on the outside, but car insurance policies come with a large mark-up for brokers, so it’s still possible for this to be profitable.

Another thing to bear in mind is that people tend to stick with the same insurance company for many years – meaning that the $200 spent to bring that customer on-board should guarantee repeat business in the years to come.

So, although expensive, it’s possible for PPC to be profitable in the car insurance niche.

Example 2 – Lipstick

The second example we’re going to look at it is for the keyword “lipstick” – which at the time of writing comes with a CPC of around $1.70.

Now, let’s say the average lipstick costs around $8 – with 50% of that being a profit margin after shipping and taxes.

That means there’s $4 profit to be made on each transaction – but don’t forget that when the conversion rate is factored in, profit will slide dramatically.

If the conversion rate is around 20% (which is a little optimistic), it means that each sale will have cost $8.50 – which means that the seller is effectively having a $6.50 loss on each item.

The only way to combat such a high CPC is to offset PPC traffic with SEO and social media traffic, or entice users to purchase up-sells, so that they spend as much money as possible on your site.

It’s clear that keywords with a huge CPC can still be very profitable – some people assume that expensive keywords are the least profitable.

This couldn’t be further from the truth – often it’s the least expensive keywords that are the hardest for sellers to see a return on.

When you're learning how to optimize website for search engines, you need to understand that the very first step is to create a website. If you want to start your own blog, I have written a step-by-step guide that will show you how to start blogging for money for as little as $3.95 per month (this low price is guaranteed only through my link). You will also receive your own domain name for free ($15 value) by clicking on this link and purchasing at least 12 months of hosting with BlueHost. Keep in mind that if you're learning website optimization, the first thing you need is your own self-hosted website. It will help you look more professional in front of your visitors, clients, companies, and everyone else, including search engines.


Start Your Blog Right Now!

Join 12,003 bloggers taking my FREE course:How to Start a Money-Making Blog in 7 DaysSimply input your best email below to get started.


Start Your Blog
Right Now!

Join 12,003 bloggers taking my FREE course:
How to Start a Money-Making Blog in 7 Days

No thanks, I have enough money