Website owners often wonder which type of advertising is the best choice to monetize their website: commissions from affiliate marketing sales or pay per click ad revenue?
To maximize the revenue each site can earn, you need to understand affiliate sales and PPC earnings to be able to determine which one can be used most effectively on your site.
A lot of affiliate marketers will often try to concentrate on generating commissions by referring sales on products, but sometimes there is a better route to take with certain niches. Every niche is different, but some of them may work better by trying to generate clicks on PPC ads from networks like Google Ads.
With PPC ads, you get paid for every click. For affiliate marketing, you don’t get paid anything for clicks. You only make money when you refer a sale. For this reason, it can be more difficult to earn as an affiliate. This article will teach you how to figure out which monetization method works best for your website.
Affiliate vs PPC Ads
The truth is that almost any affiliate site can actually be converted into a Google Ads site.
Some sites can even use both affiliate and PPC ads together, but it is typically best to determine which one works the best.
The best way to do this is to give each type of advertising a trial period on your site, also called split testing.
This should generally be a decent amount of time (a month is typically enough) so a fair volume of traffic can be analyzed.
Run affiliate ads for one month and then run Google Ads another month. After, compare the total earnings from each site.
Before you make a conclusion on which one is the best, make sure you compare your traffic levels from the test months.
If your site has extremely low traffic levels, more time than a single month may actually be needed to get a clear view of what works best.
Another important factor to consider when running this type of split test is the time of year.
Since many niches usually have some type of season tendencies, these trends can affect earnings.
To ensure that this is not altering your results, do some trend research on your niche to ensure you are comparing two equal months.
You should also think about things other than traffic levels when it comes to niche trends.
For example, conversion rates are typically higher around Christmas than other times of the year.
Some niches may have similar traffic for the holidays compared with other times of the year, even though conversions and earnings will generally be higher around Christmas.
Affiliate vs PPC Earnings
It is also important to consider the commission rate that you’re earning on a particular affiliate product promotion.
Calculate the actual amount of earnings that you’ll receive from referring a sale on an item. Then, compare that amount to the amount you may be able to earn from PPC ads on your keyword phrases.
In general, you will need multiple clicks on an affiliate ad to generate a sale.
Sometimes, you’ll even need 100+ clicks to refer a sale, so take that into consideration when comparing the earnings.
When you are calculating earnings for Google Ads, it is important to remember that Google’s stated CPC for a keyword phrase is what the advertiser pays for a click on their ad.
Each affiliate will have their own percentage of this amount that they can earn, although it is typically safe to assume that you’ll earn a minimum of 51% and possibly as much as 68% (beginner tier earnings for Search and Content ads).
If you have a niche site that has low priced products, it is possible that it could be better off as a Google Ads PPC site than an Amazon affiliate site. However, be sure to do some research to prove it before you decide to make a permanent change.
One final thing to consider is how much traffic your website receives.
In general, I’ve found that sites with a low number of monthly visitors will often not perform great with affiliate marketing ads. Since you need to send a decent amount of traffic to an offer before you refer a sale, a split test could result in zero revenue on affiliate ads if there wasn’t enough traffic during that time period.
Pay per click ads from Google will pay you for a single referred visitor and sometimes even for ad impressions, so it is often a much better choice when you have less than 100 visitors viewing a page each month. Again, run your own tests to confirm this for your niche – don’t just take my word for it.
Lower traffic sites that do not perform well with affiliate ads should revisit these split tests once their traffic levels improve. Without these additional tests in the future, you could easily miss out on higher revenue from a different type of monetization for your site.
Be sure to take a look at my in-depth guide for improving affiliate sites below. This article will teach you how to bring more traffic to your site now that it is optimized to make the most money per visitor.
How to Improve Amazon Affiliate Websites for a Bonanza of Traffic & Sales