scaling affiliate campaigns

The Scaling Fallacy: Life As An Affiliate Whack-a-Moler

Aug 13 2014

Jack creates 10 campaigns in 10 countries on TrafficJunky:

Here are his morning stats:

Germany: +$45
France: +$10
Switzerland: -$5
Netherlands: +$20
United Kingdom: +$12
Australia: +$25
Canada: -$21
Belgium: +$42
Turkey: +$20
Sweden: -$10

JACK’S TOTAL PROFIT: $138

Bill creates 1 campaign in 1 country on TrafficJunky.

Germany: +$90

BILL’S TOTAL PROFIT: $90

Which affiliate would you rather be?

Come on, it’s a no-brainer.

Bill is in a much better position.

Let’s look at what each affiliate has to do in the morning:

Jack has to:

Check stats for 10 different campaigns.
Optimise creatives in 6 different languages.
Search for the best offers in 10 different countries.
Manage bids against hundreds of competitors.
Put out fires all day before he can work on any new campaigns.

Bill has to:

Check stats for 1 campaign.
Optimise creatives in a single language.
Track the best offer in a single geo.
Manage bids against a handful of strong competitors, and many more weak, distracted competitors (like Jack).
Find new sources to test his campaign.

Now imagine the two affiliates hear about an amazing new traffic source. We’ll call it Exoclick for the lols.

They both want to scale their campaigns to it.

Bill, having much more time on his hands, goes first.

He knows Germany inside out. He knows what works. Scaling is merely a case of busting open Voluum, tapping Duplicate, and changing the tokens:

His stats now look like this:

TrafficJunky

Germany: +$112

Exoclick

Germany: +$42

BILL’S TOTAL PROFIT: $154

Jack, on the other hand, is starting to sweat.

He can no longer make sense of his stats without spending 40 minutes staring at Excel.

He has 20 campaigns in 10 countries on 2 traffic sources.

And his stats look like this:

TrafficJunky

Germany: +$23
France: -$7
Switzerland: -$25
Netherlands: +$27
United Kingdom: +$3
Australia: -$14
Canada: -$28
Belgium: +$12
Turkey: +$25
Sweden: -$5

Exoclick

Germany: +$75
France: +$2
Switzerland: -$17
Netherlands: +$5
United Kingdom: -$88
Australia: +$20
Canada: +$10
Belgium: -$25
Turkey: +$13
Sweden: -$4

JACK’S TOTAL PROFIT: $2

Aw, shit.

Jack can only manage so many campaigns effectively.

Even then, it only takes one rogue offer (in this case, the UK) to wipe out his progress in the other markets.

Jack, like many affiliates, has chosen to stack the deck in somebody else’s favour. He needs everything to go right, or his model is inefficient.

Let me tell you:

In affiliate marketing, fucking rarely does something ever go right — let alone all of it.

Why is that?

Every market requires a complex understanding of conversion rates, clickthrough rates, and the dozens of metrics that wreak havoc on them. Even this may prove irrelevant if you fail to catch hot offers early on their upswing.

So how are you going to manage the above, MULTIPLIED BY TEN, when your attention is DIVIDED BY TEN? (Plus porn.)

There’s a pretty simple solution.

Look at what happens if Jack only runs campaigns in one country — Germany*.

The stats completely change.

His profits would be $98.
(And his ad spend considerably lower.)
*This is an example, not an endorsement for advertising in Germany.

The stats improve, but that is purely superficial. What we should really be interested in is what gives us the best chance of success and true ‘scaling’ going forward.

It’s the revitalising effect of removing so much deadwood that has the real impact.

Perhaps Jack’s morning to-do list would start to look more appealing.

No more staring glumly at the ‘Monday Headbanger’ with rows of campaigns disintegrating in puffs of smoke.

His blood pressure would drop, his sense of direction might return.

More of his working hours would be spent looking for opportunity rather than putting out fires day after day, every day, until there’s nothing left to save.

This is the price an affiliate pays for spreading himself too thin.

* * *

Volume is sacred in this industry.

It goes against instinct to start culling campaigns — especially those that are profitable — and it isn’t made any easier by the pines of your affiliate manager (“Revenue, revenue, revenue!”).

But remember: volume is irrelevant if it’s fractured across 20 offers in 10 countries.

You can’t leverage the sheer number of your campaigns. It’s your dominance in each individual market that counts.

On the flip side, achieving dominance in a single market is easier when you don’t have a desktop scattered with half-finished landing pages for every single nation in the EU.

Attacking a single country with brute force and finding something that works?

Now that is a scalable business plan.

Pussy-slapping 15 nations in to converting at a 10% ROI then screaming like a banshee as you realise Nation 16 lost the entire fucking lot with one dead offer?

Not so scalable, mon ami.

* * *

The lesson?

1. Spreading yourself too thin will cannibalise any profits you might have made.

2. Spreading yourself too thin will prevent you from scaling the campaigns that are actually worth scaling.

There is a balance, of course.

You do want to explore new markets. I can’t emphasise that enough.

Without exploring, you won’t find any profits period.

Newbie American affiliates who refuse to exit their home market are probably familiar with consistent big fat zeros. That’s because domestic arbitrage… is a bitch. There’s a long line of capitalist pigs that got to the table before you.

If you are going to flee in to foreign markets, any experiment should be carried out with a degree of control.

Foreign campaigns should be planned, not ripped with reckless abandon.

Do some calculations on the required CTR/CVR metrics before you even start.

(You’ll know if you’ve planned a campaign — you won’t have French translations in one tab, German in another, and a Turkey flag occupying Photoshop.)

You shouldn’t hesitate to scrap these campaigns if the profit achieved is barely worth a pot to piss in.

So you find a country somewhere close to the Russian border that produces a steady $10/profit per day.

Should you pursue it?

Should you fuck.

Maintaining a $10/day campaign is like pulling down your pants, cracking open your skull, and taking a hearty dump on the sacred membranes.

A complete waste of mental resources.

The only possible reason to focus on these campaigns is if you don’t have the capital to compete elsewhere.

And in that case, your objective should be to raze the marketplace, pillage whatever you can, then move on to richer pastures.

* * *

My advice:

(Yes, there is some here. Eventually. I put it at the end to confuse the undeserving bastards who didn’t make it this far.)

1. Pick a very small number of countries to operate it.

2. Ensure those countries have the same language so you can recycle creatives.

3. Kill any campaign that requires time to manage but can’t satisfy your income objectives — regardless of profitability.

4. Don’t scale at all until your existing campaigns have settled from peak ‘just-been-launched’ performance in to stable, reliable numbers. (Or you’ll be left with an empire of sand castles.)

5. Understand and respect the one metric that Voluum/CPVLab can’t calculate: opportunity cost.

Whatever you work on today, it comes at a price.

Judging The Size Of An Affiliate’s Balls

Jul 26 2010

You can often judge the size of an affiliate’s balls by his willingness to keep scaling a successful campaign when he’s surpassed the amount of profit he was originally hoping to make.

A sense of vertigo can kill the desire of the “working class” affiliate. Maybe instead of raising the CPM bid to $0.50 and opening the traffic floodgates, he’ll settle for his slow trickle of leads at $0.45. When you’re profiting, and profiting well, you need to let go of your reservations about cranking up the heat and raising your costs. Spend serious money to make serious money. That’s how it works.

Your little friend, Volume, will make a 650% ROI micro-campaign look laughable when the powers of mass consumption are at work.

Yet many affiliates panic over the idea of bidding higher to capture more traffic, especially if they reach a level of profitability where the bills are paid and they’re living in comfort. Success isn’t just the relentless pursuit of optimized campaigns, but developing scaled campaigns that reach mass markets. A constant aching desire to increase revenue, the heartbeat of any successful entrepreneur, is why the super affiliates are wining and dining the girls you can only whack off to over Facebook in your mother’s basement.

If you want to live like a super affiliate, THINK like a super affiliate.

Don’t set yourself flimsy targets like “this month I’m going to make enough money to pay my water bills and then maybe splash out on some toys for my hamster”. If you aim low and succeed, you’ll be filled with a sense of achievement that you don’t fucking deserve.

If you’re making money with a campaign, raise the click prices. Raise those bid prices. Expand your demographics to be as all-encompassing as they possibly can be while still making you money. The broader you can survive, the sooner you’ll thrive.

There are times where I look at my Excel spreadsheet and I see a campaign with 650% ROI. Boasting any kind of volume, I’d be ready to say screw you all, pack up my blog, bust out the sun-cream and spend the rest of my life in the Bahamas. But of course, 650% ROI doesn’t mean shit unless it’s sustainable and scalable.

There are marketers out there who will tell you that to be successful, you need to tap up tiny little micro-demos and blow hundreds of dollars testing down to the smallest detail. While this can often be the case, you should allow your campaign to develop naturally before you start piss-arsing around with the “DOES THIS PERSON LIKE GAMES & PUZZLES” attribute on POF.

Every additional targeting criteria you add to your campaign is one more hurdle you’re going to have to jump in the future if you wish to scale. The truly successful super affiliates have one of two traits:

1. The ability to profit from broad ads with mainstream appeal.
2. The ability to automate hundreds of targeted ads in smaller demographics.

I’ve written many posts referring to the potential of laser targeting your campaigns down to the smallest detail. But if you’re going to take this route, you need to be able to automate the process.

Too many affiliates scratch around hopelessly to come up with a single campaign using targeting that looks like this:

I’m sorry but there are only so many Hispanic chain-smoking crackwhores in Canada.

Even if you are making a ridiculous ROI, is it really worth it? If you’re not rolling out a dozen other campaigns with similar targeting, you’re simply pandering to a small crowd in a shadowy corner. Forget the bright lights of super affiliate success, you’re not going quit your day job while you’re loitering on the outskirts of micro-niches.

The energy you put in to your work should be reflected by the potential it has to grow in to something meaningful. And I’m sorry, but if you spend entire days plotting out campaigns that are born with the disability of being critically unscalable, you’re going to spend the rest of your working life in the trenches.

This all stems back to the mindset of the affiliate. Are you looking to make enough money to survive? Or are you looking for opportunities to get a really fucking big swimming pool and a wife like Jonathan Volks?

There’s absolutely nothing wrong with the example of targeting I’ve outlined above, but ONLY if it’s your launch pad to mass marketing.

Look at the main niches in CPA. What do they have in common?

– Everybody is concerned with how their body looks.
– Everybody wants the chance to make more money.
– Everybody wants the comfort of a relationship.

These are all qualities that appeal to the mainstream. So instead of sitting there and wondering how you can appeal to a tiny micro slice of the market, stop thinking so small! By all means get creative with your concepts, but have the persistence and innovation to scale them to wide and far reaching demographics.

The super affiliates out there, most of them, have recognized that it only takes one winning concept to get incredibly rich. Do you really think all of these guys are smart enough to keep pulling innovative campaigns out of the bag? No, it’s usually a case that they’re more efficient when it comes to scaling what already works. They have the balls to win big.

I think many affiliates are still stuck in the financial constraints of their day job mentalities. They have a fixed monthly wage they want to earn, and the second that figure is reached, scaling becomes irrelevant. Why push on in to the unknown?

Log in to your Facebook or POF account and I’m willing to bet you’ll find campaigns where you targeted micro-niches and made a profit. Was the ROI such a burning distraction that you never ventured in to broader markets? I’m guilty of the same mistakes in the past. But if you don’t scale, you’re like the hermit worker who doesn’t have the balls to ask his boss for a pay rise. If you don’t ask, you don’t get. If you don’t scale, you’ll never know.

The next time you’re laser targeting a campaign to a small crowd, ask yourself “How scalable is this concept?” If you can’t think of a way to take it mainstream, it’s probably not worth the bother. Save your energy for campaigns where there’s potential to earn big.

Finch guest posts on PPC.bz (Because he hasn’t slagged me off yet)

I’ve recently been looking for writing opportunities on other blogs. Dearest Barbie from PPC.bz offered me the chance. I was tempted to submit a YouTube video since that seems to be his thing these days. But alas I wrote a piece called Saving FML America. Check it out, and drop me an email if you’ve got a blog I can sling my junk on.

Until then, follow me on Twitter