Archive for the ‘Technical Terms’ Category

Facebook CPC vs. Facebook CPM

One of the great stumbling blocks for newbie Facebook advertisers continues to be the knee-jerk reaction to bid CPC, CPC and only CPC. I’ll get briefly technical for those who don’t understand the terminology. It’s gonna be pretty centric to this post.

CPC is cost-per-click. You’re paying for every click that Facebook sends your way. It’s advantageous in that you’re never going to blow your budget on zero clicks. If you raise your bid high enough, you’re going to walk away with some test data even if you don’t profit. Unless of course you’re an absolute clustertard who doesn’t know how to get Facebook users to click on banners and eats impressions like they’re going out of fashion.

CPM is cost-per-mille. You’re bidding $X.XX for every 1000 impressions. If you don’t know what impressions are, seriously, give up and go home. The great advantage of CPM bidding is that, in theory, a good CTR (clickthrough rate) will see you paying a fraction of the cost for a click as you would with CPC bidding. This is because Facebook likes guaranteed money in the bank. For every 1000 page views on Facebook, your shit is being shown at the expense of another ad. If Facebook is getting paid to show it, regardless of the clicks, they couldn’t honestly care less whether your CTR is a 0.05 or a 0.15. But rest assured, YOU will care when a low CTR burns a hole in your pocket.

The overwhelming majority of new affiliates are so bat shit scared of their own ineptitude that the idea of bidding CPM is like jumping off a cliff in to a sea of fail. They will bid CPC because they like to be in control of their expenses. It’s much easier to calculate the metrics of what you need to do to be profitable if you’re working with a fixed CPC.

Unfortunately, I don’t think I would have ever made it as a Facebook affiliate if I’d only ever stuck to the CPC model. Practically every campaign I create, my intention is always the same – raise the god damn CTR and undercut Facebook’s tendency to bloat the price of a click to ridiculous proportians. That means getting on to CPM and producing a stellar creative that gets the users clicking.

I’m not going to dismiss CPC bidding strategies off the cuff. There’s a time and a place for them. But I am going to preach the importance of understanding how both of these strategies work – and how they can affect the performance of your campaigns.

Bidding with CPC

Not so long ago, it was possible for affiliates to bid CPC and rack up a ton of cheap clicks for as little as a few cents each. With traffic that converted and the volume that the world’s largest social networking site offered – it made a lot of affiliates very rich in a very short space of time. Unfortunately, an increase in advertising competition and a tighter ruling of what Facebook will allow hasn’t so much changed the game – it’s a started a new one.

You can still find cheap clicks in some markets. But if you’re thinking of hitting the United States with a sweeping demographic, you can expect the marketing challenge of a lifetime. Those cheap clicks are no more. You can either bid for the kids, or take your ass international and start hiring translators to tap in to markets that haven’t yet folded in on themselves. CPC bidding is still important though.

Calculated Testing with CPC

If you’re launching a new campaign and you have no educated idea of how the offer should be converting, it’s natural to want to get clicks through in a way that doesn’t burn your wallet. Likewise, if you know that the payout is $15, you can set your maximum CPC at $0.50 and know that as long as 1 in 30 of those clicks converts, you’re breaking even. The metrics are simple.

I like to run these initial CPC tests to gauge the conversion rate for my selected demographic on Facebook. Search PPC is not a good marker. The conversion rate will vary dramatically between traffic sources – especially if you’re direct linking.

If I found, for example, that I was breaking even with the 1/30 conversion rate – my attention would immediately turn to calculating what kind of CTR I would need to take the campaign on to CPM and lift my margins.

So with an EPC of $0.50, and my own personal preference being at least a 100% ROI, I would need to be paying no more than $0.25 per click. That then becomes my marker for a successful CPM campaign. If I can move to CPM and bid $0.25, I know that I need to be producing a CTR of 0.1 to be getting my 100% ROI.

It just so happens that a “suggested bid” CPC of $0.50 will usually translate to about $0.30 if you flick the CPM switch. This is why I generally suggest that you need to be hitting at least 0.1% with your CTRs to have much in the way of flexibility.

No Guarantee of Results with CPC

Everything I said above about calculated testing and CPC? Yeah, it doesn’t mean shit if your CTR stoops too low. I’ll say it again. Facebook likes money in the bank. If they give your ad 10,000 impressions and not a single user clicks – why would they continue to show it? Assuming there’s a CPM affiliate willing to pay $X.XX for the impressions whether anybody clicks or not?

So essentially, your CTR is still important. Bidding CPC to get a feel for your margins is all well and good, but you need to deliver a good creative. Or you’ll spend the rest of your life submitting ads to interns that take 6 days to get approved and run for about 7 minutes.

The way to conquer this common stumbling block is to leave absolutely no stone unturned with your split testing. Submit at least 10 ad variations, all significantly different, and this should be enough to force a decent ammount of impressions – and clicks – from Facebook to carve out some test data. No matter how retarded you are with your creatives, the law of numbers says that so much shit being thrown is going to leave something sticking on the wall.

What Scares Affiliates About CPM?

It took a little convincing for me to wade in to CPM advertising. I remember my fear being that an unsuccessful CPC campaign would waste my time – but rarely rinse my budget. An unsuccessful CPM campaign, however, would lose me money fast. I was worried that I’d spend money and nobody would even click my ad. Too many factors, too much weight on the creative…too much to worry about.

Are you serious about marketing though? The reality is that the large majority of networks and advertising agencies will require a CPM based media buy before they work with you – simply because it qualifies the affiliate. Why should they care that their traffic doesn’t back out for you? CPC is a gamble on their inventory, and I’m afraid to say, it’s nearly always the affiliate who’s left to roll the dice.

Facebook is probably the friendliest environment to get your feet wet with CPM. It’s self serve, which means that you can easily go in and switch off the campaigns that are leaking a loss. Remember this before you shit bricks when somebody tells you to break from your CPC patterns. Most affiliates are forced to adapt to CPM eventually, and they’re all the more diversified when they do.

CPM Bidding Delivers Value To Good Advertisers

Most people who fail through CPM bidding are victims of their own laziness and bad work. Cheap clicks for all are a thing of the past, but CPM makes it possible to cut the costs of your clicks quite dramatically. Remember that if you become chained to CPC bidding, you will always be restricted by the artificial ceiling of what Facebook decides to charge for that click.

If you take the CPM route, you’re still going to be somewhat exposed to Facebook’s charging variations – but a good CTR will ultimately decide the fate of your campaign. You can undercut Facebook’s valuation of a click and score cheap traffic by producing targeted advertisements. Good work from good affiliates will produce profit. That’s the difference maker.

Bidding CPM is the only way I’ve come close to replicating the cheap traffic that existed during the first months of Facebook Ads. Target your markets like a laser and there’s still big money to be made.

The Biggest Problem With CPM Bidding

And this is a big fucking problem, let me tell you. Facebook is inept when it comes to allowing the advertiser to implement day parting. That’s the ability to have your ad displayed only during specific intervals in the day.

There are tools and scripts to implement manual day-parting, and that’s the only reason I still use Facebook Ads because day parting is absolutely critical for any CPM campaign.

I’m not going to expose specific market trends, but needless to say, some offers convert a lot better and draw a lot more clicks during the night. If you’re bidding CPM, your exposure to slow periods in the day are that much more damaging. If you’re running CPC, you at least have the safety net of only paying for clicks. For some of my campaigns, however, the only way to stay profitable is to manually pause them during the hours that I’ve analyzed to be impression burners.

You want your traffic primed. CPM plus a lack of day parting is an ugly spanner in the works.

My word count is exploding so I’ve clearly gone off-track somewhere. This is a brief, but not too brief, look at the challenges of CPM and CPC. Hit me up with any questions. I’ve got a backlog of emails to reply to which were on this subject so I thought I’d summarize in to one ugly post. Will reply individually when I’m less busy playing with my balls.

Life After PPC: Is Media Buying The Way?

I’m sitting here at the moment, scratching my balls, and staring at six or seven open windows. MSN Adcenter, Google Adwords, Yahoo Marketing Solutions…Christ, I’ve even bothered to bust out a dusty Ask PPC dashboard.

I see zero columns galore. You could say my PPC accounts are flatlining. Today’s spend: $0.00.

Truth be told, I’ve been sick of PPC for a while now. I know there are guys out there milking the cow dry on a wave of PPC profit. Even with the latest clampdowns, affiliate bans and account suspensions – marketers are still finding ways to bend the rules and get PPC campaigns profitable. I’m not suggesting every affiliate is a rule breaking fiend, because that’s one of the biggest myths going. Half of the fucking Internet is on a commission these days.

I’ve been working on a few business strategies that stray away from buying by the click. I’ve experienced a lot of success with PPC, but I get the sense that the walls are caving in. It’s getting harder and harder to game the system. Now you might not like it, but a lot of the time that’s what being successful with PPC is about. It has to be when the competition is getting so fierce so fast.

Anyway, I’ve been running my own media buys for a while now. Recently, they’ve become my primary source of income. I’ve gotta admit, for a guy who came in to affiliate marketing with no traditional marketing background, it’s been a baptism of fire.

PPC is two skills combined. The ability to brainstorm 1000 terms in Notepad, and the ability to see which ones are putting you out of pocket.

If you can do that, you can make money. It’s pretty simple in theory.

The second you venture in to media buys, you’re faced with two problems.

1. What sort of demographic is my offer targeted to?
2. How can I reach that demographic without wasting money on a thousand others?

The clickthrough rate, for example. If you’re a PPC guy, it probably means something to you. A quality score here, some extra volume there.

If your clickthrough rate bombs on Adwords, what do you do? You rewrite text and resubmit. Ultimately you don’t pay, because it’s PPC.

The majority of media buys can be broken down in to either CPM or tenancy based agreements.

CPM, if you don’t already know, is Cost Per Mille. That sounds a bit confusing, but it actually means cost per thousand impressions.

To put things in perspective, I got in touch with Ciao the shopping comparison channel and asked them for a CPM quote for 300×250 ads. They got back to me with £15.

£15 CPM?

1000 impressions for £15.

Marketing Sherpa states an industry average clickthrough rate for the 300×250 ad at 0.37 percent.

After a little notepad action, you can work out that an industry average CTR is going to get you a monumental 3 clicks for that £15 spend.

If I were to go with Ciao and throw up an average banner, I’d be paying the equivalent of £5 CPC. That’s probably about $7.50 to you Americans. You’ve gotta have a pretty smashmouth landing page to catch even a whiff of a profit on those numbers.

Needless to say, I do not recommend Ciao for CPM based advertising.

And here lies the problem with any media buy. You’re out on your own with a pencil and some gut instinct for company.

Not only do you need to hunt down the best advertising deals, reaching the right demographics, but you need to overhaul your creatives accordingly. A landing page optimized for Adwords and almost guilty at the fact that it’s slinging a rebill? Get the fuck out.

I breathed a sigh of relief when I waved goodbye to Adwords. No more distracting SEO efforts. No more pinning my hopes on a contextual link that some intern isn’t supposed to find, but my target audience is.

If you’re going to move in to media buys, make this your first objective. That list of precautionary measures you took to avoid the Google slap? Time to hit the rewind button and scrap every last one of them. You’re not trying to quietly divert unsuspecting Google searchers to an affiliate offer. You’re not trying to offer “valuable content” that doesn’t act solely as a bridge page. You’re trying to sell something, right? A bridge page is what you NEED.

With these impression-based purchases, you’re advertising to a majority of people who don’t give a shit what your offer might do for them. They haven’t searched anything. They haven’t asked for a review or a scam warning of XXX product. So on that rare occasion where you capture the attention of a would-be customer, you’ve gotta have the landing page that gets the job done. None of this Adwords affiliate shame bullshit. Throw your offer in their faces because you’re gonna need to if you plan on making money with CPM.

I spoke to a guy last week who had snapped up banner space for a dieting offer across a massive network. A huge network. He was paying a super high CPM, with no cap, and had managed to blow around £8,000 over the course of a month. His return on that investment? Something like £3,000.

He got me to take a look at one of his many landing page variations and it immediately struck me that he was driving traffic to a site that looked more Wikipedia than Amazon. People are supposed to be buying shit through you? Well, give them something to buy.

When you’re targeting demographics, you have to get to the point and sell what you’re gonna sell. You can’t roll out an Adwords friendly wiki of drivel and hope that some chance-clicker is going to find your affiliate link.

It’s worth getting in to media buys if only to complete a full circle of online marketing. PPC platforms are great for affiliates. They’re self-serve and you can flick the switch on a campaign before you cream a few thousand dollars in to the abyss.

Media buys just ain’t so simple. That’s why it’s so rare that I talk to somebody doing them who’s having success. It’s probably also why the biggest earners I know live by them.

You’ve got to completely change your mindset before you go to market. A campaign has to be rolled out at it’s optimum. If your creative sucks hard, you’ll pay for it before you have chance to correct it. CPM is a bitch for slow starters. Get a designer and have him put together some visually appealing graphics that are gonna catch eyes.

Many affiliate marketers roll out half baked PPC campaigns and only get them profitable after a few weeks of scrapping aside the dead weight. If you want to get good at media buying, you can forget that approach to business.

Do you think a bigtime advertiser throws a commercial on television without researching the target market? Without split testing it’s own sample audience? Without physically doing everything in its power to get that ad ready to have maximum impact from the get go?

You have to wipe the slate clean and do your research. Start thinking demographics. How can you appeal to them? How can you capture their attention?

And that’s what I’m talking about when I mention a full circle in online marketing. Many of us delve in to PPC and start thinking of the costs of a click and a conversion rate as if there’s nothing else attached to making money online.

Media buying requires that same knowledge, but also the ability to match demographics to invisible variables. It’s almost like, you know, real marketing.

So I guess this is an insanely long outburst about nothing in particular. I will actually post some media buying tips in the week. It’s not actually as emotionally crippling as I’ve made it out to be. I think.

Getting Over The PPC Startup Hurdle

I’ve been speaking to a few friends about the benefits of getting in to affiliate marketing, and it’s pretty hard for me to explain to them how I’ve managed to get to where I am. One of the biggest stumbling blocks for anybody looking to get in to PPC affiliate marketing is the initial startup investment.

There’s a reason millions upon millions of third world kids spend 14 hours a day scratching around on Digital Point for SEO advice. SEO is “free”. You can build a potentially vast empire of riches without spending a single penny of your own money.

For anybody who’s brand new to these terms, I’ll give a quick overview.

You can pretty much divide affiliate marketing in to two main categories; PPC and SEO.

SEO: Stands for Search Engine Optimization, it epitomizes the constant struggle between webmasters to get their sites ranked higher up in the search engine results. Being ranked higher means more traffic, and more traffic generally leads to more revenue. A good SEO expert will know how to build a website that’s compliant with the ten commandment bullshit that Google likes to boss the web with. He’ll also know how to get his site linked to on the web. Basically, the main purpose of SEO is to get traffic for free.

I spent four years doing this. I didn’t make much money but that was partly down to the fact that I find manual SEO work ball-numbingly boring. I could sit a donkey at my computer desk and I’m pretty sure I could have him practicing good SEO before some of these retards get their sites indexed. You might like it. It’s free and it’s a good place to start if you’re wanting to sample the affiliate marketing waters without blowing a fortune up the wall on Google advertising.

PPC: Stands for Pay-Per-Click. It is as it sounds. Instead of whittling away the hours trying to claw your way up the search engine results, you sign up to Google AdWords and buy exposure in the “Sponsored Links”. The obvious disadvantage of this is that you’re gonna have to pay some money to get some bang for your buck. How much you spend will vary dramatically depending on how competitive the search terms are that you’re bidding for.

I like PPC because it gets the job done quick. I really don’t have the time in my day to go begging other webmasters to link to me. You can whack an advert online in ten minutes and be seeing a profit within the hour. That is, of course, assuming you know what the hell you’re doing. Anybody who claims to be good at PPC should have a firm grasp of tracking (that is, watching closely to see what works and what doesn’t), and he or she should also have either creative sales writing skills or the know-how to outsource that shit to somebody who does.

When somebody asks me how they can get in to affiliate marketing and be successful, I generally tell them to go and read about PPC. But the trouble with paying for your web traffic is that 95% of us are going to need to see a return on that investment pretty quickly to be able to maintain the cashflow.

I’m at the point now where it’s routine for me to spend a few hundred dollars a day on a single campaign. You try telling your mates that they only need to pay Google $500 a day to be able to give up their day jobs and they’ll probably laugh in your face. The fact that it takes about 5 to 6 weeks in the time that you start affiliate marketing until the time that you get the first pay cheque and you’re looking at a cashflow problem which can cause quite a few headaches.

If you’re lucky enough to be sitting there with $5000 in the bank, congratulations, you’ve got a better starting block than the large majority of us had. I started my Google AdWords campaigns on free vouchers. It took me about $350 worth of AdWords freebies to be able to nail my first $1000 in revenue. That revenue was 100% profit seeing how the voucher money was never mine. I waited for my cheque and then I invested all of it, every last penny, in to campaigns that I knew were profitable.

Eventually, I had a nice pot of money to fund some serious investment and I’ve gone on from there. But for most people, that startup hurdle remains a huge issue. Here are your options.

1. Build up an investment pot with SEO.

When I said SEO was free, I lied. SEO is never free, and it’s often more costly than PPC. What most people seem to forget when they announce SEO as the cheap budget alternative is that everybody has to have an hourly rate. You might be using marketing techniques that are free, but the time that it takes you to do them has to be compensated in the form of money that you’d expect for your time.

If you spend 8 hours a day doing SEO, and your hourly rate is $30, that’s $240 you’ve not earned because of SEO. So is it free? Of course it isn’t. You wouldn’t expect an SEO specialist to work for you for free, would you? So remember that the same cost covering applies to yourself.

However, if you need to raise money to fund PPC, you’re going to need to commit to this whole working for free business model. Either for a few weeks or a few months depending on how quickly you produce conversions. Save the money you make and put it towards your PPC starting pot.

The benefit of doing things this way is that your SEO websites will continue to earn you money even when you’ve stopped working on them. In fact, most affiliates return to natural SEO once they’ve exploited PPC and used it to become more business-efficient. It’s the only strategy for viable long-term growth.

2. Become a coupon whore.

When I realized that I’d blown the little money I made with SEO on trips to America and widescreen televisions, I didn’t have the patience to go back over the same tracks. I started collecting free PPC advertising coupons.

Over here in the UK, they supply a free £30 AdWords voucher with every edition of .Net magazine. I grabbed a couple and searched the web for other freebie offers. They’re out there by the plenty. I just about managed to accumulate enough free credit, combined with my own small investment, to generate a big enough return to grow my business and get it on it’s own two legs.

The good thing about starting on coupons is that your risk attachment is non-existent. I knew that if a campaign bailed, I hadn’t lost any money. And I never did.

The challenge is operating on extremely tight resources (£20 a day is NOT a lot in PPC). You have to pinpoint the most profitable campaigns and nail them from the get-go if you want to grow your business using a bunch of coupons.

3. Take on debt.

Something I was never, ever brave enough to do.

If you’re serious about PPC and you’ve done your research, you might be tempted to place a little flutter on a loan or a credit card. I don’t personally recommend taking this route, for two obvious reasons.

Firstly, you’re taking on a big financial burden. You’re borrowing money and throwing it at a business model that might never make you a single penny. That’s pretty brave.

Secondly, the money you make in return has to be enough to cover not only your investment but the interest on it as well. Profit margins are everything in PPC. You’re at an immediate handicap if you have an artificially raised ROI to match.

But the fact remains that many affiliates are ready and willing to take on personal debt to fund their campaigns. I’ve spoken to a couple of guys who were five figures in the red before turning it around to be well on their way to six figures in the bank. All within the space of a year.

Whatever method you choose to fund your PPC, don’t be a retard. Track every last detail of your income and outgoings. The horror stories of spiraling debt are only applicable to the dumb shits who know no better.

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How To Lose Money Chasing Network EPCs

There was a time when EPC (Earnings-per-click) influenced every major decision I made in affiliate marketing. It’s easy to see why.

You sign up to a network, view the list of offers, and it makes sense to assume that the offer with the highest EPC is going to be the offer that brings home the greatest margin of profit. Hey, that’s pretty nice, I can earn $1.80 per-click when it only costs me 50 cents to buy that click. That’s $1.30 profit per-click. If I send 1000 clicks to that offer in a day, Holy shit, I’ve just made a thousand dollars on the fly.

There’s a reason so many newbies get bummed out of the affiliate market avec tail between legs; they believe in logic like this.

The reality is that EPC tends to be as accurate as the latest Google keyword tool. And that’s not very. EPC is rarely an illustrative statistic of the true earning potential in an offer.

EPC is essentially an average, designed to collect together the network performance data of each and every affiliate promoting that particular offer. Speaking from experience however, the only averages that any affiliate should give a damn about are his own. Why should I care about how the rest of the industry is performing? Evaluating trends is for those who don’t want to get their hands dirty tackling the market head-on.

Besides, you’ve got many different factors that can screw with the accuracy of a network’s EPC data.

Don’t forget that law of average. If a network lists the EPC of an offer as $1.20, it doesn’t tell you a thing about the performance of the affiliates who actually know what they’re promoting from what they’re smoking. You could have a high flyer raking in his Acai Berry profit at $3.50 EPC, but if the offer is hot and a few dozen dipshits decide to direct link the promotion on Google’s Content Network – you’re going to see a logical and obvious fall in network EPC. How drastic could that fall be? It depends on the offer. Probably pretty drastic.

I remember one of the crucial early mistakes I made in affiliate marketing was assuming that the network EPC acted as some truer than thou equation for how much money I’d make if I got X number of clicks. My first campaign was a Facebook offer that lost me more money in one night than I care to remember.

I made the false assumption that because the offer had an EPC of $1.70 or something, I’d make the same kind of return by sending any old crowd of un-targeted and ultimately cheap traffic at the landing page. The result? It was something along the lines of me sat at my desk two days later, wondering why the world didn’t want whiter teeth.

It took me a good few campaigns before I started to realize that consumers ain’t simply browsing away online with their credit cards at the ready. You’ve got to earn those purchases, and sending traffic alone is not gonna cut the mustard. God forbid, it’s definitely not gonna work when you’re advertising to half of Facebook in one hit.

So is EPC a complete waste of time? No, far from it actually. EPC can be one of the most valuable statistics in your inventory, but you have to filter the crap before you can cast an educated opinion. So here’s how you make that EPC actually mean something.

1. Ignore whatever widely available EPC data your network makes available to you. That includes the email newsletters, the hottest offers, the best new promotions. Forget about it.

2. Contact your Affiliate Manager directly. Ask them for the latest EPC data (last 2 weeks is latest in affiliate terms) for the top five publishers running that particular offer.

3. Ask for a separate spreadsheet showing the EPC data of the top five publishers in ONLY the method you’re promoting. That’s Web, Search, Email…you get the idea.

4. Compare the two spreadsheets.

Now you have an accurate picture of not only what the big cats are earning, but whether that offer is best promoted as part of a direct PPC campaign or an email send or whatever.

If your Affiliate Manager is worth the network pay cheque, he or she should have no problem in compiling the spreadsheets for you. It’s never “pushy” to ask. Affiliate Managers are there to help you make them money. Don’t ever lose sight of that.

Now that you have some meaningful statistics of what the top performers are earning from an offer, you can scrap those diluted and useless network EPCs. Run your campaign with the intention of matching and bettering the best performers.

That means watching your competitors, learning from them, and doing what they’re doing better then them. Repeat. If you follow those steps, you don’t have to worry about EPC.

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