Linear Equations in Business

.USING LINEAR EQUATIONS IN INTERNET BUSINESSES

One of the primary ways of selling goods on the internet today is through buying “pay-per-click” advertisements. For example, if you do a Google search, you will get a page of results. On the far right and possibly at the top of these results, you will see more results, but they will more resemble advertisements than results. This is because they are in fact paid advertisements (Michael Sakowski and Licensors 2012). Today, you can’t help but come across advertising on the internet pages you visit. This has become a multibillion dollar business. Some internet giants like Facebook, Google, and Twitter to name a few, started from nothing just a few years ago and mostly don’t even have a physical product that they are selling. Thanks to the point-and-click advertisements, these companies are now as large as General Motors and other corporate giants.

Pay-per-click is the most used advertising format on the internet. When you advertise with point-and click you agree to bid a certain amount per click, like .25 to .50 cents. Every time someone clicks on your ad, you are billed the .25 or .50 cents. You start from here to use linear equations to find things out answers like how much you are selling per click, the percentage of sales per click, your minimum sales to make a profit, and your ideal cost per click. So, if you are charged .50 per click and you receive 1000 clicks, you are billed $500.00. If you receive 80 sales out of the 1000 clicks you know you averaged a sale 8% of the time. Also, you make $10 per sale profit. To use these numbers to make a linear equation, we would say:

80 sales * (x dollars per sale) = .50 cents per click times the number of clicks (1000) is $500

80x = 500

X (total cost)= $6.25 per sale.

You need to make over $6.25 per sale to make a profit.

To figure out how much you are making per sale you must take all the costs and subtract from all the revenues.

For this...