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Your Goal Is To INCREASE CPCs

Andy Black

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Your Goal Is To INCREASE CPCs

Most people want to reduce their cost-per-click (CPC).

But you should be trying to increase you CPC instead.

Obviously you have to stay positive ROI, so the game becomes:

“How can I increase my CPCs and still remain profitable?”

The secret is to increase the visitor life-time-value (LTV).

This means increasing the conversion rate of visit to sale.

…and increasing the average order value.

…and increasing the chance that these new buyers become repeat buyers (aka customers).

…and increasing the chance that these buyers refer us to their friends.

…and increasing the chance that they perform a “branded search” next time (where we can get clicks for pennies).

…and increasing the chance that they type in our website name directly the next time they need the products we sell, rather than perform a search on Google in the first place.

Any smart business (and they aren’t all that smart btw), will reinvest as much of their additional backend profits back into the front of their funnel so that they can get more people into the funnel.

They will also be able to pay more to affiliates, so affiliates will all start sending them their traffic.

…which is especially important when it’s a zero sum game where every sale you make or customer you get for life is a sale and customer that your competitors don’t get.

So that you eventually become the 1,000lb Gorrilla that can’t be moved from the top of the pile.

It looks to me like the winner of the “traffic acquisition” game actually ends up becoming conversion optimisation experts, with proper backend sales funnels, with cross-selling and up-selling, with good relationships with their customers, who are great referrers and evangelists of your business.

Everything that building a proper business means in effect!

-----------------------------

My typical AdWords paid search starting strategy is to bid low and count impressions.

This helps to identify where you can get traffic from at the lower CPCs for your market.

Then gradually raise the bids until I’m getting more clicks and can trickle traffic through my funnels.

I’ll then get to know my conversion rates and try and plug my major leaks.

Each time a leak is plugged, the tap is ratcheted open at the top of the funnel by increasing bids a bit more.

All the while trying to run at whatever target profit margin the business has.

If we can double conversion rates, we’ve instantly doubled sales (which is great), but we’ve also halved our CPA.

Our profit margin is now too big (yep, I’ve been shot down for that as well!), so we double CPCs to get back to the previous CPA. Which will often quadruple volumes.

(In case you didn’t spot that let me say it another way: Doubling our conversion rates can often multiply our sales volumes by a factor of 8.)

The target is position 1, all the time.

Get the 30% CTR, and also buy the traffic from the other positions.




(Watch a related video here.)
 
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Gymjunkie

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This shit blows my mind:

Our profit margin is now too big (yep, I’ve been shot down for that as well!), so we double CPCs to get back to the previous CPA. Which will often quadruple volumes.

(In case you didn’t spot that let me say it another way: Doubling our conversion rates can often multiply our sales volumes by a factor of 8.)


Like Dan Kennedy says, those who can outspend competition will usually win. I've heard it but it's still tough to really grasp and do. The part about Quadruple volumes is hard to grasp.
 

integrity

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The part about Quadruple volumes is hard to grasp.

By increasing your CPC, you're outbidding others and getting more impressions on your ads. That translates into more clicks.

Being higher up in the ad chain usually also increases your CTR, which also translates into more clicks/volume.

Great post, Andy.
 
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"Your margin is my opportunity." (Jeff Bezos)

If your margin becomes too large, it becomes someone else's opportunity to undercut your traffic stream.

Great post.
 
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Andy Black

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Wow. Great quote from Jeff Bezos.

Filed away. Thanks!
 

Andy Black

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By increasing your CPC, you're outbidding others and getting more impressions on your ads. That translates into more clicks.

Being higher up in the ad chain usually also increases your CTR, which also translates into more clicks/volume.

Great post, Andy.
^^ Spot on.


@Gymjunkie ... how I visualise this on the Google SERP is that doubling your bid price moves your ad higher up the page where you'll get twice the CTR (mileage will vary obviously, and this doesn't work if you're already in top ad position).

So you've doubled your traffic volume.

THEN, because there are less advertisers competing for the higher ad positions (because they can't afford the higher CPCs), your ads show more often in that higher ad position. Let's say twice as often (aka your Impression Share has doubled).

So your ads are showing twice as often, in a higher ad position where you get double the CTR.

Which gives you quadruple the volume.


The double whammy benefit is that if you doubled your CPC because you managed to double you conversion rate and you're just going back to your previously profitable CPA, then you've ended up with 8x the number of conversions.

It's a beautiful thing when it happens.


However, there's a downside. If you halve your CPCs, then you're going to end up with 25% of the traffic.

So it's knife edge stuff. Your performance can go through the roof, or crash and burn.

A sure fire symptom of you being on the wrong side of the algorithm is if you keep pushing bids to maintain ad position and maintain click volume. That means Google's AdWords algorithm prefers your competitors campaigns to yours. You can't really bid your way out of it (although of course it does help a bit... hence Google's common canned advice to "bid more").


This post might help: The Trick To Understanding AdWords
 
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Gymjunkie

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A sure fire symptom of you being on the wrong side of the algorithm is if you keep pushing bids to maintain ad position and maintain click volume. That means Google's AdWords algorithm prefers your competitors campaigns to yours. You can't really bid your way out of it (although of course it does help a bit... hence Google's common canned advice to "bid more").

And that's why Quality score matters. I need to do a new campaign and landing page.
 
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Andy Black

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And that's why Quality score matters. I need to do a new campaign and landing page.

Yeah, do what you have to do, but don't be distracted by QS... it's a red herring from Google. The real metric is CTR since increasing that increases your CPM and Google's RPM.
 

Gymjunkie

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Yeah, do what you have to do, but don't be distracted by QS... it's a red herring from Google. The real metric is CTR since increasing that increases your CPM and Google's RPM.

I see them as being interrelated anyway.

P.S. Hope you got the email. Check spam folder if not.
 

integrity

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And that's why Quality score matters. I need to do a new campaign and landing page.

Yeah, QS matters. But like @Andy Black has said, increasing your CTR also helps your QS. It tells Google your ad is very relevant to the users, and so your quality score goes up. By the same token, an ad with a very bad CTR will hurt your QS.

It's not all just about your landing page relevancy.

When there are 7 people competing for the same spot in the ad chain, Google will compare all their ads and give preference to the ones with the highest CTR (among other things, including QS), as it would indicate theirs is the most relevant (as well as make them the most money).
 
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Dicky Dee

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If you were to start a campaign would you recommend using adwords "first page bid estimate" to set your CPC and keep your daily budget at say $20 to start out?
 

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I dont know if @Andy Black already mentioned this in another one of his posts, but you should always be split testing ads trying to increase CTR. I have had many campaigns where my bid stayed the same but because I had a high CTR, I got more clicks with a lower CPC.

Also, after letting my ads run for a day or so, I adjust my bids for the 3-5 ad place. Ads in the 1-2 position get alot of clicks but most people think they are organic searches and when they see you are trying to get them to buy/get their contact info immediately, they may back out and you will have a high bounce rate. I have found that most people know the text on the side are ads and have a different intent. I have gotten better CR in some very competitive niches using that strategy.
 

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I dont know if @Andy Black already mentioned this in another one of his posts, but you should always be split testing ads trying to increase CTR. I have had many campaigns where my bid stayed the same but because I had a high CTR, I got more clicks with a lower CPC.

Also, after letting my ads run for a day or so, I adjust my bids for the 3-5 ad place. Ads in the 1-2 position get alot of clicks but most people think they are organic searches and when they see you are trying to get them to buy/get their contact info immediately, they may back out and you will have a high bounce rate. I have found that most people know the text on the side are ads and have a different intent. I have gotten better CR in some very competitive niches using that strategy.


To my understanding, run 2 ads one with a high CPC and one with a low CPC to see what works and what doesnt?

I've had my ad run for 7 days now, theres some keywords that have been getting very low and very high impressions, im assuming i should delete the ones that are very low and increase CPC for the very high impression ones or high CTR?

Thanks for the tips.
 
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Andy Black

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If you were to start a campaign would you recommend using adwords "first page bid estimate" to set your CPC and keep your daily budget at say $20 to start out?

Ha... the "first page bid estimate". I see that warning and Google's suggestion, but I don't pay it too much heed.



The short version of my normal strategy is in the first post above:

My typical AdWords paid search starting strategy is to bid low and count impressions.

This helps to identify where you can get traffic from at the lower CPCs for your market.

Then gradually raise the bids until I’m getting more clicks and can trickle traffic through my funnels.

I’ll then get to know my conversion rates and try and plug my major leaks.

Each time a leak is plugged, the tap is ratcheted open at the top of the funnel by increasing bids a bit more.

All the while trying to run at whatever target profit margin the business has.


The longer version is here:
 
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Andy Black

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I dont know if @Andy Black already mentioned this in another one of his posts, but you should always be split testing ads trying to increase CTR. I have had many campaigns where my bid stayed the same but because I had a high CTR, I got more clicks with a lower CPC.

Also, after letting my ads run for a day or so, I adjust my bids for the 3-5 ad place. Ads in the 1-2 position get alot of clicks but most people think they are organic searches and when they see you are trying to get them to buy/get their contact info immediately, they may back out and you will have a high bounce rate. I have found that most people know the text on the side are ads and have a different intent. I have gotten better CR in some very competitive niches using that strategy.

Good insights.

Indeed, I've heard people saying they never click on ads, until I point out that some of the listings on the left are actually ads. Doh.

When checking your stats by average position, try segmenting by "Top vs Other" and see how that looks. You'll might try downloading the data and then segmenting by 3 dimensions (typically I'll do by "Day", "Top vs Other", and "Device"). Now you'll really start to see what's going on.

As for bounce rate, call me contrarian, but I want a high bounce rate. I want people to hit the page, see the phone number, then ring. No messing, no "engagement" on my site (puk...). :)
 
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Boo Blizzi

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To my understanding, run 2 ads one with a high CPC and one with a low CPC to see what works and what doesnt?

I've had my ad run for 7 days now, theres some keywords that have been getting very low and very high impressions, im assuming i should delete the ones that are very low and increase CPC for the very high impression ones or high CTR?

Thanks for the tips.

This is how I set up Adwords campaigns: I get my keywords and put them in very tight adgroups. (like no more than 4-5 words) I create 2 different ads for that adgroup and make sure I have the conversion pixel on my LP, then I let it run till end of budget or for a specified time.

I look at which keywords got clicks and hopefully conversions as well as the ad with the higher CTR. I move the winning ad (my control) and the winning keywords over to a new adgroup and begin split testing ads to beat that control.

For keywords that got high impressions but low clicks in the original adgroup, I may try to get them to work by creating new ads and landing pages that are more relevant. If you got a big keyword list, it is not uncommon to have 20-50 different adgroups going at the same time, just be sure to set you daily budget. Or even better, move the winning adgroups to their own campaigns.
 
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Dicky Dee

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Ha... the "first page bid estimate". I see that warning and Google's suggestion, but I don't pay it too much heed.



The short version of my normal strategy is in the first post above:




The longer version is here:


If i were to start at a low CPC how would you determine a low CPC? Just start out at $0.20? Or is there another metric you use to determine this?
 
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Boo Blizzi

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If i were to start at a low CPC how would you determine a low CPC? Just start out at $0.20? Or is there another metric you use to determine this?

I dont know what market you are in, but I try to start with $1 just to see how competitive/expensive the market really is. Keep your budget low (about $20 or so)
 

Dicky Dee

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This is how I set up Adwords campaigns: I get my keywords and put them in very tight adgroups. (like no more than 4-5 words) I create 2 different ads for that adgroup and make sure I have the conversion pixel on my LP, then I let it run till end of budget or for a specified time.

I look at which keywords got clicks and hopefully conversions as well as the ad with the higher CTR. I move the winning ad (my control) and the winning keywords over to a new adgroup and begin split testing ads to beat that control.

For keywords that got high impressions but low clicks in the original adgroup, I may try to get them to work by creating new ads and landing pages that are more relevant. If you got a big keyword list, it is not uncommon to have 20-50 different adgroups going at the same time, just be sure to set you daily budget. Or even better, move the winning adgroups to their own campaigns.


Im going to try that out, i currently only have 1 campaign running with about 18 keywords! I had more but i deleted the ones that didnt have much impressions and clicks.

Quick question whats the conversion pixel on my LP? Sorry for all the questions but i am literally just beginning my quest into adwords
 
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I dont know what market you are in, but I try to start with $1 just to see how competitive/expensive the market really is. Keep your budget low (about $20 or so)

I found when i had my daily budget at $30 it would use up my daily budget pretty quickly this past week, do you set your ads to "exact match only" for your keywords or "broad phrase"?
 

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Im going to try that out, i currently only have 1 campaign running with about 18 keywords! I had more but i deleted the ones that didnt have much impressions and clicks.

Quick question whats the conversion pixel on my LP? Sorry for all the questions but i am literally just beginning my quest into adwords

This means I place the google conversion pixel on my landing page. In the main navigation look for conversions under Tools.

As far as keyword match type, I start with phrase or broad match modified which +looks+like+this
I start with these to find keywords I may not have been thinking about by looking in my reports. But truthfully, you will need a bigger budget for this strategy so start with exact match for your $20-$30/day budget.

Also 18 words in one adgroup is too much. Most of my converting adgroups have 1-3 tightly related keywords max.
 

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This means I place the google conversion pixel on my landing page. In the main navigation look for conversions under Tools.

As far as keyword match type, I start with phrase or broad match modified which +looks+like+this
I start with these to find keywords I may not have been thinking about by looking in my reports. But truthfully, you will need a bigger budget for this strategy so start with exact match for your $20-$30/day budget.

Also 18 words in one adgroup is too much. Most of my converting adgroups have 1-3 tightly related keywords max.

I actually have the conversion pixel put on my checkout area as im selling beauty products on my site, what i dont have yet is a correct landing page i just send people who click my ad to the "shop" page where all my products are.

How much of a budget do you need to for the phrase or broad match type? I will change it to exact match for now.

I have gathered over a weeks worth of information on my keywords, would you then delete the keywords that had very little impressions and no clicks?
 
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I actually have the conversion pixel put on my checkout area as im selling beauty products on my site, what i dont have yet is a correct landing page i just send people who click my ad to the "shop" page where all my products are.

How much of a budget do you need to for the phrase or broad match type? I will change it to exact match for now.

I have gathered over a weeks worth of information on my keywords, would you then delete the keywords that had very little impressions and no clicks?

AHHH SHIT... you got an eCommerce site!?!
Damn dude, truthfully I have never been able to get Google PPC traffic to convert profitably sending it directly to a shop or product page.
I got display and FB traffic to work but I actually set up a funnel to collect emails then sent a 30 day autoresponder sequence promoting discounts on different products.
Personally, I dont know any marketer that has been able to get Google PPC to work for their eComm site because the CPC's are so high and if there is a big brand or Amazon in your market, they will spend money on traffic without a concern for actual costs.
I don't know what you sell, but I have 2 sites in the women's health and beauty niche (hair extensions and handbags) and couldn't get either to work.
Someone told me to look into Google Shopping and Amazon but I already started with SEO since that is what I know.
 

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AHHH SHIT... you got an eCommerce site!?!
Damn dude, truthfully I have never been able to get Google PPC traffic to convert profitably sending it directly to a shop or product page.
I got display and FB traffic to work but I actually set up a funnel to collect emails then sent a 30 day autoresponder sequence promoting discounts on different products.
Personally, I dont know any marketer that has been able to get Google PPC to work for their eComm site because the CPC's are so high and if there is a big brand or Amazon in your market, they will spend money on traffic without a concern for actual costs.
I don't know what you sell, but I have 2 sites in the women's health and beauty niche (hair extensions and handbags) and couldn't get either to work.
Someone told me to look into Google Shopping and Amazon but I already started with SEO since that is what I know.

Bummer, i need to find more ways to get sales on my website. I actually sell on ebay and amazon already for my products and they sell well thats the reason i started my own website so i can make their customers into my own. Other then that method i dont have much else yet at the moment in terms of bringing in traffic, but i know people want my products since they're buying it from the big sales channels i just need to find a way for organic sales.
 

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Bummer, i need to find more ways to get sales on my website. I actually sell on ebay and amazon already for my products and they sell well thats the reason i started my own website so i can make their customers into my own. Other then that method i dont have much else yet at the moment in terms of bringing in traffic, but i know people want my products since they're buying it from the big sales channels i just need to find a way for organic sales.

OK... since you're selling on other channels, what you do is send a promo card with every shipment that drives the buyer to a special discount page on your site. (I offered a $50 credit on the hair site)
When they sign-up to get the credit/discount, you now have their email address to send them sales promotions whenever you want. Depending on how much you sell on those other channels, you can build up a pretty big buyers list in no time.
And since they already bought from you, they will trust you (especially the ebay buyers).
Growing your sales or introducing new products will be easy.

Additional ways to drive traffic
You could also create a blog on your site and get a bunch of keyword rich articles written. That will help you with SEO/organic traffic.
You could also get product demonstration videos made and post them on Youtube... watermark the videos with your urls and put a link in the description back to your site like this: http://yoursite.com so the link is clickable.
That will get you going.

@Andy Black sorry for the thread jack brother... we got carried away ;)
 

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@Andy Black - I must apologise too, just wanted to share a really useful addon I've put on one of my clients ecommerce sites last week.
@Dicky Dee - Depending on the cart you are using, see if you can get hold of something similar to an 'Abandoned Cart' Addon. Most ecom sites tend to have a high abandoned cart rate, I installed it on Monday, and by Weds it had sent out 24 emails (these are sent 24 hours after the customer has left the site), out of those 24, a whopping 16 went back on and completed their transactions, generating an extra $1640 in revenue, amazingly this was without even offering an incentive! (which you can do within this particular addon for Prestashop, but I would imagine other carts have similar). Its a simple thing, but quite effective to push sales up a bit, and definitely a good thing to have early on when starting an ecommerce site :)
 

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OK... since you're selling on other channels, what you do is send a promo card with every shipment that drives the buyer to a special discount page on your site. (I offered a $50 credit on the hair site)
When they sign-up to get the credit/discount, you now have their email address to send them sales promotions whenever you want. Depending on how much you sell on those other channels, you can build up a pretty big buyers list in no time.
And since they already bought from you, they will trust you (especially the ebay buyers).
Growing your sales or introducing new products will be easy.

Additional ways to drive traffic
You could also create a blog on your site and get a bunch of keyword rich articles written. That will help you with SEO/organic traffic.
You could also get product demonstration videos made and post them on Youtube... watermark the videos with your urls and put a link in the description back to your site like this: http://yoursite.com so the link is clickable.
That will get you going.

@Andy Black sorry for the thread jack brother... we got carried away ;)

Yes i have been doing the promo card thing with every purchase followed up by an email asking to be subscribed to my email list. I also have a request for email pop up when they try and leave the site, it has been working pretty well in collecting emails for sure....now to find a way to convert it to sales!

I will give the youtube videos a shot, thanks for all your tips. @Andy Black we will return the thread to you now lol

@MediocrityNoMore interesting, i use squarespace, do you sell a product on your site or a service? how did you know what email to send it to or do they actually have to sign up before you can do that? If you dont mind sending me a pm about this that would be awesome since i dont want to jack andys thread anymore!
 
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Andy Black

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Lol. It's all good
 

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