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Residual Income, the Overlooked Resource in Pay-per-click

By Daniel Brough
Posted Sunday, November 14, 2004

Pay-per-click advertising is a quick, powerful, effective way to market products for affiliate programs. New advertisers to the medium are often stunned at how quick and effective it is. (I myself remember making over $1500 profit the first month I tried my hand at it, and that was back when I didn’t know what I was doing)

The pay-per-click method is simple and straightforward. Place an ad to show on Google or some other pay-per-click search engine. Customers click on it. It brings them to a page where they can make the purchase.

It’s a wham! Bam! atmosphere that’s sharp and direct, but sometimes those of us who use the pay-per-click market get into the same mindset and overlook perfectly profitable products simply because they don’t pay out as much right away.

I’m talking about the power of residual income, and any time you find an affiliate program that pays ‘residually’ or mentions the words ‘lifetime customer’, you should take notice.

Here’s an example. Suppose you find two web-hosting providers, each of which has an affiliate program. Web host #1 offers an immediate payout of $90 per sale to you for anyone who buys their service. Sounds pretty good; it’s a high payout and you think you can get a good conversion rate on any ads you run for their services.

Web host #2, on the other hand, pays out only $10 per sale, but offers $10 per month residually for the lifetime of the customer.

Oftentimes, those of us who play the pay-per-click game get so in the mindset of ‘quick money’ that we tend to dismiss those affiliate programs that have lower payouts without really considering what may be offered.

Which of the two web-hosting services has the better payout overall? We know that web host #1 pays out $90 per sale. That’s ‘quick money’, right away, and a lot of the time it’s easy to think “a bird in the hand…”

But suppose a customer buys web-hosting services from company #2. Presumably, if he is pleased with the service, he’ll stay with it for a very long time, possibly the rest of his life. So even though the initial payout is only $10, the potential return of this one sale is $10 per month, for the rest of the customer’s life! I think that kind of payout deserves a second look.

So which service is the better to promote? The answer, of course, is both of them. Depending on how well each service converts to sales, and what the click-through rate is on your ads, either or both of the above services could be wrong for you to promote. But either or both could be very profitable.

The moral: Don’t dismiss low-paying payouts out of hand, especially if there is residual income involved.

About the Author
Daniel Brough is the founder of AdWord Wizards, a free mentoring program designed to teach anyone how to profit from pay-per-click search engines. Want to start a profitable AdWords campaign in less than 30 minutes? Come to ( and sign up for this free program.


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