Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on pinterest

Budgets, Budgets And More Budgets

One of the primary considerations for running any kind of affiliate marketing campaign with paid traffic is the budget. How much do you need to spend to get the results you want and how much you can afford to spend can be numbers at the opposite ends of the budget scales. To accumulate, you have to speculate, and in the world of affiliate marketing, that translates to spending money on your campaigns.

The question is, how much should you be spending on your campaigns? One often-quoted answer is “as much as it takes to get positive”, but being from a more conservative school of thought, I like to be a little bit more organized than that.

Campaign budgets are a combination of multiple factors, the critical factor being the offer payout. Don’t expect to spend $20 a day promoting an affiliate offer with a $500 payout. Finding out if your campaigns have the potential to go into positive territory is where you need to concentrate your testing budget.

Testing an affiliate marketing campaign is a bit like going fishing at a new lake you’ve never fished before. You know it’s full of fish, but where exactly are the spots with the most significant concentrations of fish?

Finding that out involves trying a number of spots around the lake till you hit the honey pot. That might take you all day and fishing from ninety-nine different locations till you hit the jackpot. Just because the hundredth spot was the lucky one, it doesn’t mean you wasted your time with the first ninety-nine. The tests lead you to the winning spot. No trials, no result.

The methodology is exactly the same with your affiliate marketing campaigns. You run your tests to (hopefully!) lead you to the jackpot.

Spend enough time reading up on affiliate marketing blogs and networks, and you’ll soon come across the 10x quote. Incidentally, that’s the figure I use, so let’s dive into that one in a bit more detail.

The 10x quote basically means allocating a budget ten times the offer payout for your testing campaign. If the offer you’re promoting has a $500 payout, then a reasonable testing budget would be 10×500 = $5,000.

That might seem like a lot of money just to test a campaign but always keep in mind what the goal is here. You’re finding the spots where all the little fish, or conversions, in this case, like to hang out. That could be websites or zone ids that convert for your particular offer. The goal is to find the jackpot. You can’t accumulate without speculating!

In many cases, I’m not even looking for a positive return from my initial testing budget. I like to see a particular ROI (Return On Investment) threshold from my campaigns. Depending on the payouts (and, by extension, the competition), I usually aim to be at least at -25% ROI with my test campaign and budget.

Translate that to dollar terms, and for an offer paying out $500 and a testing budget of $5,000, I aim to be at no worse than $3,750 in conversions, equal to a -25% ROI. The -25% figure comes from experience. Don’t forget we’re talking about testing budgets and campaigns here. From experience, I know I can get a campaign with a -25% ROI positive with optimizations. That’s not carved in stone by any stretch of the imagination, but I can count the number of times I’ve failed to get positive from a -25% ROI testing campaign on the fingers of one hand. OK, maybe two hands, but you get the point. More often than not, a test campaign with a -25% ROI will go positive once I start on the optimization phase.

One thing to keep in mind here is the use of landing pages and creatives. If you use pre-landers for your campaigns, and I highly recommend you do, then ideally, your testing budget should take that into account. If you use two pre-landers, then your effective testing budget should be 10 x payout x 2. In the case of our $500 payout example, using two pre-landers will hike your testing budget to $10,000.

Remember, the testing phase of any affiliate marketing campaign is to collect data. Data you can use to optimize your campaign and data that will carry over to future campaigns as well. Run an affiliate campaign for a finance-related product, and any converting site ids, for example, should also work for new finance-related campaigns targeting the same geos. It pays to talk to your account manager on any network you’re buying traffic on to get the inside scoop on converting websites and site ids for the particular geos you’re interested in. That could get you a quick head-start, and there’s nothing better than seeing conversions coming in at the start of a campaign!

Helping our affiliates with their campaign budgets and optimizations is one of the perks of working with Forex Ads. Our affiliate managers all come from the sharp end of marketing, and they have accumulated years of experience and expertise.

If you’re looking for a home for your finance related traffic, have a chat with one of our affiliate managers. You’ll be amazed at the difference we can make to your results!

Related Posts

CPC or CPM?
One of the ongoing arguments in the world of affiliate marketing is the debate between CPC and CPM. They’re both payment methods you can use…

This site uses cookies. For more information, please check our cookie policy.