Why Affiliates Are Losing Money On AdWords

A friend of mine recently bought an eBook of the kind where the seller promises their readers that they will tell them the well kept secrets of how to make easy money online without hardly doing any work. The eBook cost $50 for less than 50 pages of advice on how to sell items on eBay, how to make marketing that stands out and how to become an affiliate and initiate sales of the sellers eBook. The advice was mediocre and at $50 my friend was less than satisfied. The seller of the eBook was apparently not satisfied with making only $50 on the eBook he also encouraged his readers to create ads on Googles AdWords and use this as a means to make the promised easy money online. The affiliate is however very likely to lose money on this deal, Ill explain to you why below.

First however, lets look at how affiliate programs work. A seller may sell a product on the sellers website. The seller can have affiliates who link to the sellers site from the affiliate's website or using sponsored links. If a visitor follows the affiliate's link to the sellers website and makes a purchase, a percentage of the purchase price is paid out to the affiliate. The percentage that is paid to the affiliate varies for info products it is common for the percentage to be between 40% and 75% of price of the product. Affiliate programs thus allow both the affiliate and the seller to make money on the purchase and both parties should be happy with the agreement.

In the case of the $50 eBook on making money online and the affiliate advertising on Google's AdWords, the situation looks like this:

Lets say that the keywords Make Money Online on Googles AdWords will cost you $1 and that one in 100 users clicking the ad will make a purchase. In this case it costs $100 to make a sale of $50. The seller is unlikely to want to make such advertising as he loses $50 on each sale. If however he can make an affiliate pay for the Google AdWords, by promising the affiliate 50% on each sale, then the calculations are different. The affiliate will now pay the $100 to make the sale. The affiliate will make 50% of the purchase price of $50 so a total of $25. As the affiliate pays $100 to make a sale and makes $25 on each sale, the affiliate loses $75 on each sale. The seller however is left with $25 for each sale after paying $25 to the affiliate. The seller thus makes money on generating sales for Google AdWords where it doesnt pay off for the seller himself to advertise.

The conclusion thus has to be, that if you are an affiliate, be careful with advertising on Googles AdWords or with other sponsored links. If you have paid $50 for an eBook with poor or mediocre advice you are likely to have purchased a product from a scrupulous or even dishonest person and you should be very wary of doing anything to generate more revenue for the seller.

About the Author:

Andrew Nielsen is the author of The Online Business Builder. A FREE preview of the eBook is available on http://www.i-want-to-be-rich.com Andrew Nielsen is an internet entrepreneur and is currently helping online business start ups getting on their feet. mailto: an@i-want-to-be-rich.com

Pay Per Click - AdWords Can Be a Devastating Experience
Google AdWords can be a brutal and devastating experience. I know it from my own experience. Wherever I go I see people who are losing money with AdWo...

Make Money with Adwords
I will tell you right now that you can make money with adwords. Actually anyone can make money with adwords. The main object is to find out what peo...

Adwords Miracle Review - Become A Master Of PPC & Make Thousands Online
Google AdWords is one of the methods, that affiliates use to promote products to earn a commission from sale.Here I would like to write a review of a ...

Beating Adwords Review - A Review From A User Perspective
As an Affiliate marketer, you may have come across an Internet marketing Ebook called Beating Adwords. The product suggests that you could actually ma...

The Proven Internet Formula to Make Money Today
How to Make Money Today Using Adwords and ClickBankThe Internet has become a moneymaking machine through different marketing programs, such as Adwor...

Google Adwords
What is Google Adwords Go to Google and search for something(no matter what). You will see two types results-natural and form Adwords. The main resul...

Productive PPC Advertising Through Keeping an Eye on Your Competitors
I used to manage a store that had two competitors in town. None of us had a pricelist in our windows, and the only way to find out what we were all d...

Create a Web Site for Your Local Business
If you have a local business that caters to the people that live in your city or town, then advertising on the internet has probably not been an attra...

Using Adwords For Affiliate Marketing
So you have a website promoting your favorite affiliate products and now you need traffic. The fastest way to get high quality traffic is Google Adwor...

Why You Need to Track and Test Your PPC Campaigns
Pay per click advertising is great way to generate targeted traffic to your product or affiliate product quickly. Google AdWords is the most popular c...

Adwords Killer - Has Pay Per Click Got You Blue?
Can you really Beat Adwords or be an Adwords Killer...the short answer is YES, but most of us will need a little help.I can't make any outrageous prom...

Google Adwords Can Drain Your Pockets!
My approach caused me to fail at Google Adwords. Most people I speak to about my Internet Marketing strategies seem to take in what I tell them but th...

Beating Adwords - FAQs
Have you heard of Beating Adwords? If you have, maybe you are one of those affiliate marketers that is sitting on the fence about weather to pull the ...

Google Adwords Profits Dont Come Easy - Or Do They?
If you ask a hundred different online entrepreneurs with Adwords experience to tell you whether its easy to make money while buying traffic from Googl...

Make Money Online With AdWords - You Don’t Need a Gigantic List of Keywords
AdWords advertising can be profitable and rewarding, but it can also lose you lots of money if you don't know what you are doing. You want to have su...

This entry has been filed under Pay Per Click Advertising and currently has