I am interested in advertising my gamesite through Google adwords.
The problem is i just can't find a logic way to make this kind of advertising profitable.

Okay, a little example:

Let's say i pay $100 bucks/month.

i bid on a certain keyphrase and the minimum i wanna pay for this is $0.05 (5 cents).

This means Google will send me 2000 visitors ($100/0.05) in one month right?
Okay, let's say that 50% of these visitors are actually going to download.
That's 1000 downloads.

Now, to make it a little easy, let's say my conversion rate is 1% (1 order out of every 100 downloads).
This means i get 10 orders for my game(s) in this one month.
My game(s) is sold at $10 for example.

This means, 10 orders * $10 would make me: $100.

Wow! great, this is the exact amount i payed so no profit at all!

Does anyone got a solution for this?
Besides pricing my game(s) higher?

To me this kind of advertising just doen't seem to work.
Anyone else got this problem too?
If so, what advertising techniques work well for your gamesite???

looking forward to some answers

If you manage to break even I'd actually consider that a good thing.

You will gain more customers who you can pitch your next game to for much cheaper if not for free.

I tried Adwords for a week or so, and built up a 10 dollar bill, and decided to be more targeted for the same reason you stated. Instead of using "mac games" I now use "Mac Golf Game" and other more specific adds.

I agree. Breaking even is perfectly acceptable. Don't underestimate the power of word of mouth, or brand loyalty and repeat customers... (assuming, of course, your product is decent).

What if you have several games on your site didier?... ;)

But. Your statistics is too optimistic really. And we didn't find the way to manage that Google Adwords to work for us (for example). You should always remember that Google Adwords panels are everywhere on current stage - check two-three grey half-pirate sites and you will find Google Adwords there as well. These sites will give you clicks but I'm pretty not sure if they'll give you sales. ;)

I use Google Adwords for my wife's flower business because I can get very local targetted ads, but I wouldn't consider using it for my business until I had enough games to make it worthwhile. The problem with using very narrow target phrases is that you are also narrowing your exposure--millions of people probably use the phrase 'downloadable games' but how many use 'fun nonviolent downloadable mac games' or even 'nigritude ultramarine'? ;)

So what you are saying is that it doesn't actually matter how many sales you will get from those Google Adword visitors but it's more to make your Newsletter subscriptions a little bigger, and to promote your gamesite in order to get more repeated (and cheaper) visitors in the future. right???

Yeah, it makes sense about the newsletter signups.
I never looked at it this way.

Thanks! :D
Let's hope it works ;)

Like I said in the last post about advertising (cliff started that one).

It isn't always about short term gains. Advertising is a great way to get new clients and more money, but you can't expect to be great at it right away.

You have to pay that money to learn about how to advertise effectively and try new things. Each product is different and each product may have different tactics to use. Consider your $100 an investment in research above all else, and if you make back the $100 that is even better, it means you are doing research for free AND growing your population.

-Joseph Lieberman
(PS: VGsmart does advertising management... click the link below, you know you want to).

The problem is i just can't find a logic way to make this kind of advertising profitable.

Increase the visitor/download rate.
Increase the download/sale rate.
Increase the price.

Three simple ways to make more money than you put in. :)