Optimize Your Campaigns For Profitability
Affiliates come in all shapes and sizes, specialize in a range of niche subject areas and use a variety of marketing tactics to grow their businesses. What they share is their performance-based revenue models, which means taking on greater risk upfront for the potential increased return based on results.
This makes campaign profitability an even more important factor to your business as an affiliate. In looking to run a profitable campaign, you want the outcome to outweigh the costs, which means finding the right mix of tactics for your business that ultimately results in revenue. To do this, there are four key variables to consider that can help you on your path towards profitability.
One: Have clear goals
Have you ever used a GPS to get somewhere without entering the destination? If you did, you likely created more of a challenge for yourself. The same is true of your goals. Having a clearly defined, realistic goal is the first step towards achieving it.
The good news is the journey to that goal (or destination) can take many different shapes and forms and an important consideration is understanding what resources you have at your disposal to get there. These resources likely include your skill base, available time, capital, and/or team. All of which can impact your profitability.
Here are some examples of clear, measurable goals for campaigns that can all impact profitability:
Grow impression count of content by X% (brand awareness)
Achieve X newsletter sign-ups (building community)
Achieve X click-throughs (engagement)
Convert X customers (revenue)
Increase conversion rate by X% (optimization)
For those with limited capital and more time; you may choose to invest more heavily in targeted content to achieve greater exposure on search engines. In other cases, you may have capital on your hands and are looking for a quicker path to growth with lower profit margins but larger gain in audience that you can then convert later.
You want these goals to be easily measurable so you can understand how they impact your profitability.
Two: Understand your metrics of success
Once you have clearly defined your goals, you need to understand how to measure their success. These metrics should tie directly back to your goals and give you a clear understanding of whether you are on the path to profitability.
Some example metrics related to the above goals are:
Impression count and CPM (cost per thousand impressions)
Conversion rates to sign up
Cost per click (CPC) and click-through rates
Application to approval rates
Growth in conversion rate
We asked Andrew Schrage, CEO of Moneycrashers.com, how he uses metrics to measure profitability. He explains, "In order to successfully optimize an affiliate marketing campaign for profitability, it really all comes down to data analysis. You need to know what the profit margin is for each type of sale, what it costs to make an acquisition, the value of both new and repeat customers, and the lifetime value of your customers.”
This means if you are looking at growing your newsletter database, is your click-through rate sufficient for what you invested in exposure? Is the cost per click you invested profitable for the customers you have acquired and are those the types of customers that will actually convert? Asking these questions will help guide you in understanding how to test and adapt your strategies.
Three: Know what to do with the data you have collected
Once you have a clear picture of your goals and how your campaigns are performing against them, the next step is refining your strategy to optimize your results.
You may have found a paid search strategy that has been a bit more expensive but brought you customers that are converting. You may choose to adjust your focus to this tactic to try and bring that cost down, while still targeting that same customer base.
There may be a specific brand that you have partnered with to promote that is resulting in a high conversion or approval rates compared to some others. You can shift your focus to showcase this brand more while the conversions continue to result in higher payouts.
Again, adjusting your strategy comes down to the resources you have at your disposal and what profitability looks like for you.
Four: Get creative
Finally, don’t be scared to get creative with your marketing tactics. Some of the most effective and profitable campaigns can come from using unique approaches to growing traffic, creating stickiness with your audience and converting them to sales. For example; Russ Nauta of creditcardreviews.com explains the importance of strategy and investing upfront when looking to invest in a campaign.
Nauta recently used his vacation to his advantage to prepare for a creative campaign. He explains, “I did a survey of US tourists on a Caribbean beach during the summer asking about their spending behavior for their trip. It was for a credit card website with the goal being to see which types of cards people were using. I divided the project into six different parts: I created a survey, distributed it and then collected the survey results. From that I was able to analyze the data, create a write-up of findings, create an infographic, publish it and then launch the campaign to promote the product.”
According to Nauta, the campaign was successful from a financial standpoint with a substantial amount of residual value, and he attributed this to having a clear plan and staying the course.
Ultimately, in running a profitable campaign, you want the gains to outweigh the costs you invested to get there. This comes down to having clear goals, ways to measure against those goals, and having the ability to optimize and get creative as you run your campaign.
What works for some may not work for others – only you know your business and what works best for you. As long as you keep these key factors in mind, you will be well on your way to running consistently profitable campaigns to grow your business.
Julia is Marketing Director at Fintel Connect, a performance marketing company dedicated to financial services.