Adsense and SEO Tricks

If you apply it properly, it will save you hundreds if not thousands in the long run.
(more money for you, less money for that bastard google )
so the question we’ll attempt to answer here is: “how do we know how many clicks to send into a keyword before we determine that it’s unprofitable?”
i’m talking about an exact dollar amount where you can confidently say “this keyword sucks” and stop pouring any more money into it, and have the math to back it up.
so to start with, we’ll need just 2 numbers:
1) the offer payout for each conversion
2) your bid for the keyword
we then calculate the required conversion rate for the offer to break-even. (that is, when your costs equal your income and your total net profit is $0)
cRate = bid / payout
if this number’s unreasonably high (like over 25%), then stop right now, because there’s almost no chance of turning a profit no matter what you do.
you’d have to either find a higher paying offer or lower your bid in order to put the required conversion rate into a more reasonable range, like under 10-15% to be safe.
so we start by assuming that this conversion rate is true.
then your chance of not making a conversion on each clicks is:
(1 – cRate)
and your chance of not making any conversions at all after a certain number of clicks is:
P = (1 – cRate) ^ clicks
P is the magic number here.
as the number of clicks goes up, the probability of making 0 conversions goes down, if our initial assumption about the keyword’s conversion rate was true.
after P drops low enough, like say below 5%, then we can assume that our initial assumption about the conversion rate was incorrect, and therefore the keyword will not break-even. (meaning you’ll only lose money if you continue to send clicks into it)
so in other words, P is the probability that your keyword will be profitable over the long-term.
so now we’ll use this equation to calculate the number of clicks you need to send without getting a single conversion in order to drop P below 5%. (or whichever probabilty you’re comfortable with).
note that P=5% is an arbitrary cut-off point, and increasing the value of P means that you’ll be able to lose less money per unprofitable keyword, but your probability of falsely cancelling a profitable keyword would also go up. i’d recommend keeping P below 12% and above 4%.
reversing the equation above to calculate for clicks, we get:
clicks = log(P) / log(1 – cRate)
which can also be written as:
clicks = log(P) / log(1 – (bid / payout))
now just plug in the numbers and see how many clicks you’d need to send with 0 conversions in order to determine the keyword is a dud.
here’s an example:
lets say you have an offer that pays out $30, and you bid $2 on a keyword.
then your required conversion rate to break even would be 2 / 30 = 6.6%.
6.6% is a reasonable conversion rate for targeted traffic, so everything looks good so far.
now you decide that you’re willing to keep sending clicks until your keyword drops below a 5% chance of ever being profitable. so then we set P = 0.05
and then we plug in all the numbers:
clicks = log(0.05) / log(1 – 0.066) = 44
and that’s it.
so for this specific bid & payout, if you sent 44 clicks without getting a single conversion, then you can be confident that the keyword only has a 5% chance of ever being profitable.
and so you stop dumping any more money into the keyword.
that’s all.