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Add me on SphinnAlright back to affiliate marketing posts to make you crybabies happy that say I don’t post any useful stuff anymore (uh would you like to go back and read all the affiliate marketing articles I wrote last month?).
A common question that comes up is “How much money do you lose in a campaign before you start profiting?” In my experience, the ball park time is around one week, sometimes 2-3 weeks. Here are the super affiliate strategies that I employ when first starting up a campaign :
1) I always start with an inflated bid. What do I mean by this? I always bid going into it knowing that I’m going to be losing money because my CPC is too high. Why do I do this?
a) I like to incur impressions fast to split test all my ads faster. The higher position I am, the more impressions and clicks I’ll get. I can find out faster what ads have the best CTR and what ones don’t.
b) I like to see the real potential in a niche. I know that by having a high position, I’m going to have the best chances of getting a conversion. If I bid super high and can’t get any conversions, chances are when I drop bids down I won’t get any conversions either. So if I spend $3,000 on a campaign in the first day and make $2,000, I see that as a success because the niche has the potential to make me at least $2,000/day if I work on expanding keywords, optimizing landing pages, etc.
2) I slowly drop my bids down. I don’t bid $1.00 and then the next day drop it to $0.10. I start at a buck, drop it to $0.95, then $0.85, then $0.77, etc. Position is naturally going to drop a little bit, but remember we’re not planning on being up there in the long run. We want to find a happy place where our revenue is decent but we’re operating higher than a 10% margin.
3) I watch things daily. If on Day 1 I lose $1,000, and a few days later on Day 5 I’m still losing $1,000/day…something isn’t right. Things should progressively get better as I lower bids. If after a week I’m still losing that much, I’ll probably call it quits on the campaign.
4) If after a week I’m breaking even on the campaign, I’ll label it as a success and then I’ll switch over to editing other factors. I’ll try and get it profiting first by switching up the landing page and/or ads, getting a higher payout on the offer, testing other offers, etc. Once that is fully optimized and I’m hopefully making a few hundred bucks a day, I’ll continue to drop bids and test new keywords. If it’s making a few hundred a day, I can blow that much on finding new converting keywords and still break even overall.
So yup, that’s pretty much how I look at things as far as the “how much do I lose” perspective goes. Hopefully gives and insight into some of your own campaigns.
April 1st, 2008 at 10:22 pm
Hmmm.. Well I’m in no position to take more than $200 a campaign. Guess, poor guys like us won’t make it up to top so. Anyway the articles are motivating me.. perhaps I too could take a affiliate program running on $3000 campaign someday. Its all about effort ha.. Nice blog I met.
April 1st, 2008 at 11:11 pm
Awesome Paul. On a related note, I wanted to know: what’s your ratio like of failed offers to hits? I find that if I try and promote something that others are ignoring, I’m more likely to hit a dud, and if I go where others are, it’ll convert but I won’t be able to afford the cpc in the first place, so…
April 1st, 2008 at 11:11 pm
btw, why isn’t my avatar showing here, when it’s showing down below in the footer?
April 1st, 2008 at 11:45 pm
hey, don’t listen to nickycakes, he is as full of shit as Jon from wickedfire!
April 2nd, 2008 at 12:25 am
….”operating higher than a 10% margin.”
Is this correct? If so, that’s not very good. The ONLY way to make money would be big scale and that will ONLY get more difficult with time.
April 2nd, 2008 at 1:04 am
Paul,
What about new accounts?
Reason I ask for is becuase I know for a fact I’m using good keywords, but my bids are super high and when I drop down I just lose my position big time I just spent 740 dollars and make like 219 back, I’m thinking to my self I need to give it more time?
April 2nd, 2008 at 7:09 pm
I’d give it more time, especially with a new account.
April 2nd, 2008 at 4:01 am
I would like to add that for those of you sending visitors to your own opt-in pages to collect leads, you should know your LPV (Lifetime Perceived Value) of that visitor. So even if you’re losing money on the front end, you may still be getting 200-500% ROI on the backend with recurring sales. ;)
April 2nd, 2008 at 9:23 am
This was very insigntful :) I appreciate it :)
April 2nd, 2008 at 10:53 am
Thanks for the tip. I have been doing it similar, just not bidding “super high” on the cpc.
April 2nd, 2008 at 12:54 pm
You know quite honestly I don’t know why I even bother to comment on this blog because I never get a response, so therefore I’m unsubscribing :)
April 2nd, 2008 at 1:36 pm
yea paul this is a very very cool post. good work buddy!
April 2nd, 2008 at 1:58 pm
Right now I don’t have the funds to spend any money on programs. Hopefully I can generate enough revenue from my site to pay for these services. Right now any money from my site, goes right back to it to make it better!
April 2nd, 2008 at 5:04 pm
what about collecting email addresses from the traffic? if you do that, what do you do with those email?
April 3rd, 2008 at 12:30 am
See my comment above. Basically, you then need to calculate all the offers you will be sending out through your newsletter or whatever. Estimate your conversion rate for each offer sent, and add it all up. So if your newsletter has a chain of 10 offers, each with a payout of $1.50, and converting at an average 1% then you add it all together with regards to the number of subscribers in your list. And there’s your LPV. ;-)
April 2nd, 2008 at 5:11 pm
Good stuff. :) Helpful tips for sure.
April 2nd, 2008 at 5:40 pm
When you are bidding $1.00 a click when would you drop bids to $0.95, then $0.85, then $0.77, etc?
Would you give it a day or two before you start dropping bids? or would you start dropping bids when you put up a new landing page?
Great article
April 2nd, 2008 at 8:29 pm
Thanks for the tips Paul, very helpful. So do you pretty much spend the majority of your time that whole first week on that one new campaign?
April 2nd, 2008 at 8:47 pm
Similar to what Kerry asked, do you lower your bids by a certain CPC per a certain timeframe? For example, $X.XX CPC per day/week/month? Or do you lower your bids to target a certain position range? Also, do you lower your bids only on keywords that have actually gotten clicks or do you change bids on keywords that only have gotten impressions as well?
Good solid post though…
Your blog is one of my favorite PPC blogs to read :)
April 4th, 2008 at 11:02 am
This is a great Post Paul! Thanks for sharing it is always good to know!
May 4th, 2008 at 7:11 pm
Great Post as usual Paul!