Getting Traffic: Paid vs. Free

No matter what you are marketing on the internet, the one fundamenta requirement is that you have to get traffic.  You have to get your offer in front of people.

There are a zillion variations on ways to do that, but they fall into two different camps: paid and free.

So which is better?  This is question I’m wrestling with right now.  And it depends on which you have more of, money, or time. And which you want to risk.

There are many ways to generate free traffic.  You can write articles, forum posts, blog entries, comments on blog entries, or various other forms of content, which, directly or indirectly refer people to the site with your offer (whether it’s your own site or an affiliate link).  You can generate enough relevant content to build up something of a reputation as an “expert” in your field, and you can get noticed in the search engine rankings, driving traffic to your site.  You can respond directly to people on social networks such as Facebook or Twitter who are discussing topics relevant to your offer, or you can just post blindly in these mediums about your offer.

All of these methods take time.  It takes time to generate the content, and it takes time for it to be recognized.  It takes time for sites to rise in the Google rankings.  It takes time to “troll” the social media sites for people to interact with.  And, in this internet age, we tend to be impatient. We want results yesterday.  It takes discipline to be willing to wait.  And it takes confidence in yourself, your offer, and your approach – confidence that what you’re doing will produce results if you keep at it.

But it doesn’t cost any money (or at least not a whole lot – you might spend a few dollars on a domain name and hosting if you’re going to run your own site, and maybe some small amount on some tools, but you’re not paying for traffic per se).

Paid traffic, on the other hand, can run on auto-pilot.  There are several forms of paid traffic as well, the most common of which is pay per click (PPC) advertising, such as Google AdWords or Facebook Ads.  In these, you create a two-line advertisment (plus title and your website address), and ty it either to some sites or some keyword topics.  When people go to those sites or enter those search terms, your ad gets shown to them.  If they click on your ad, you are charged an agreed upon amount.  Usually, you “bid” on placment – saying how much you’re willing to pay for each person who clicks, which may be from a few cents to several dollars.  Then Google will determine which ads to show using a complicated formulat, but basically, which advertiser is willing to pay the most.  So if you want your ad shown more often, you bid higher for it.

PPC can work well IF you know how much each click is worth to you.  That, in turn, requires that you know how much each customer is worth to you (over the lifetime of their relationship with you), and what percentage of people that come to your site will be come customers (referered to as the conversion rate). If, for example, you know that, on average, each customer will generat a net profit to you of $75.00,  and that, on average, one out of 10 people that come to your site will become customers (a 10% conversion rate), then each click is worth $7.50 to you. (These are completely hypothetical numbers.).  If you KNEW these numbers, would you pay, let’s say, $.75 per click to get people to your site?  Duh! $1.00? $2.00?.  In fact, you could theoretically pay anything less than $7.50 per click and still make money IF you KNEW that each click was, on average, worth $7.50.

When you’re starting out, though, the problem is that you DON’T know those numbers.  You may not even have guesses at them.  So you have to risk money to drive traffic to your site until you can get enough numbers to generate reliable statistics.  Setting up an open-ended PPC campaign without knowing the value of each click is a surefire recipe for going out of business. So you have to decide how much are you willing to risk to find out what your numbers are?  And then stick within those limits.

I hope to talk more about fine-tuning these numbers in future posts.  Meanwhile, share your thoughts in comments.  What has worked for you if you have experience?

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