Get 5% back from YSM and Increase Traffic

A few days ago, American Express struck a deal with Yahoo Search Marketing to help promote their Amex OPEN Savings Program. I personally have the American Express small business card and it has really saved me a lot of money with flights to Blog World Expo and hotel expenses when traveling around the country. Adding this new deal with YSM to help me save 5% on my total spend is a great bonus as I have already tied my accouts to my amex cards!

It’s not only 5% that you’re saving, it’s the increase in Gross Margin that you’re gaining.

With that said, you will be able to bid just a little bit higher on your campaigns over your competitors that aren’t using American Express. Remember my article on finding out your maximum CPC? Now you can use the number you found and apply the 5% discount to find your new maximum bid.

Example:

Formulas to Know

Cost Per Click (CPC) = Total Cost of Campaign / Total Clicks from Campaign Landing Page
Conversion Rate (CR) = Total Number of Leads / Total Number of Page Impressions
Cost Per Action (CPA) = Cost Per Click / Landing Page Conversion Rate
Lead Value = Value of Sale * Lead to Sale Conversion Rate
Gross Margin = (Lead Value – Cost Per Action) / Lead Value

Assumptions

Landing Page Conversion Rate = 10%
Lead to Sale Conversion Rate = 25%
Value of Sale = $100 - Determined by Total Profits divided by number of Sale
Lead Value = $25 - Determined by Total Profits divided by number Leads

Goal

Find Maximum Cost Per Click for a 20% Gross Margin

Solution

Maximum CPA = Lead Value - [Gross Margin (20%) * Lead Value ($25)] = $20
Maximum CPC = CPA ($20) * Landing Page Conversion Rate (10%) = $2.00

Example

Budget = $200
Clicks = 100
Leads = 10
Sales = 2.5
Total = $250

Gross Margin = (Revenue - Cost)/Revenue = (250 - 200)/200 = 20%

So you have figured out that you’re maximum CPC is $2.00, but now that you have got yourself an American Express small business card, you get a 5% discount, so what is your real maximum CPC before the discount?

New Maximum CPC BEFORE 5% discount from YSM.
$2.00 / 95% = $2.10

When it comes to search engine marketing, $0.10 can be the difference between ranking 7th and getting no traffic and ranking 3rd, which is the optimal spot you want to rank for highly targeted, converting traffic.

So, what are you waiting for? Go get your American Express Card and your Yahoo Search Marketing Account today! Here’s some of the things they get discounts for:

Travel and Dining

– Delta(R): 3% off flights (plus 2% with co-branded Business Cards)

– JetBlue(R): 3% off flights (plus 2% with co-branded Business Cards)

– eSkyGuide: 20% off digital flight timetables

– Hyatt Hotels & Resorts(R): 3% off hotel stays

– Hertz(R): 5% off car rentals

– Courtyard by Marriott(R): 5% off hotel stays

– Fairfield Inn by Marriott(R): 5% off hotel stays

– SpringHill Suites by Marriott(R): 5% off hotel stays

– Wingate(R) by Wyndham: 5% off hotel stays

– Ruby Tuesday(R): 5% off dining

Supplies and Services

– Yahoo! Search Marketing: 5% off internet marketing

– Yahoo! Small Business: 5% off internet business tools

– FedEx: 5% off express and ground shipping

– FedEx Kinko’s Office and Print Centers(R): 5% off business services

– 1-800-FLOWERS.COM(R): 5% off flowers and gifts

–

American Express

Incentive Services: 5% off prepaid cards

– Symantec: 10% off security software

Business Building Tools

– BizFilings: 20% off incorporation services

– Ceridian: 20% off payroll services

– Constant Contact(R): 5% off e-mail marketing services

– ExpensAble: 25% off expense management software

– Logoworks by HP: 15% off logo and graphic design

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