If you've ever found yourself locked in a bidding war with another affiliate, you'll know how frustrating it can be.
Here's a selection of tips that I try to stick by, as long as I can keep my ego at bay...
Raise Bids Slowly
If you're going to trade punches with the competition, trade them slowly. I prefer to raise my bids just once or twice per day. The alternative is to get embroiled in a refreshing match. This benefits only the publisher.
A good tactic is to establish the likely timezone of your competition. If he is slow to outbid at 8pm, but on you like a whippet in the morning, that would suggest he operates in a different timezone, or to a different schedule. Wait until later in the day to raise your bids and then hope that he doesn't notice until the morning.
The other downside to aggressive outbidding is that it cranks up the emotional attachment to being first. You become more invested, which is dangerous. You don't want to be invested in metrics that aren't directly related to your bottom line.
Match Instead of Raise
Scenario A) Two aggressive affiliates spend an entire day outbidding each other. In doing so, they split the traffic 50% and raise their costs by 30%.
Scenario B) Two sensible affiliates realise they're spending an entire day outbidding each other. They decide to split the traffic equally by matching their bids near the minimum. Same net traffic, minus the 30% spike in 'competition fees'.
It's a no brainer, isn't it?
If only it ever happened...
When I sense that a bid is rising too quickly for my liking, I will sometimes extend the 'olive branch' of matching his bid rather than beating it. This is in the hope that he sees the faceless gesture for what it is:
"Let's stop cannibalizing our profits and split this traffic equally, like we're doing anyway, for more $$$"
I wish I could say the success rate is greater than it is. The gesture goes unnoticed by many advertisers, but I've seen it work on several occasions, making it a useful tactic to try.
Carpet Bomb the #2, #3, #4 and #5 Spots
Sometimes you can gain the top percentage of traffic without getting in to a bidding war. By submitting new campaigns and slotting them in to spots #2, #3, #4 and #5, all priced just under the top bidder, you can often shave his traffic away while he's busy drumming one out over all the campaigns where he's bidder #1.
A very satisfying heist when the situation permits.
Pose as the Big Bad Wolf
What does an affiliate marketer hate most?
Taxes? Maybe. Modesty? Kinda. The FTC? Fuck, we hate a lot. This was a bad question.
But nope...
There's one terrifying wolf that strikes fear in to the hearts of affiliatekind, and his name is the Brand Advertiser.
He (or she), the batshit crazy fuck, who cares not for making money, and only wants maximum exposure.
Brand Advertiser does not give a shit about ROI. To him, more traffic is good traffic, even if it comes massively overpriced. The only shit Brand Advertiser gives is for spending that entire budget so he can report back to management with a half-arsed spreadsheet of head-scratching metrics titled 'Expected ROI In Q4 2017' that somehow paper over the cracks of losing money. Incredibly, he probably gets promoted.
What's that, you say? Recallability? Recall my balls.
The plus side to having Brand Advertisers in the game is that even the most aggressive affiliate will concede defeat when he comes up against one in a bidding war.
So, what can we do?
Well, if you are feeling particularly nasty, you can try and spook your competition by posing as a brand advertiser and massively inflating your bid to gobble all of the traffic.
Say you and Competitor X are trading quickfire bids - 0.12, 0.121, 0122, 0123. Now this is exactly what it looks like. Two affiliates squabbling in the sand over who gets to be big fish. Now say the pattern goes like this...
0.12, 0.121, 0.122, 0.123, you bid 0.20
Competitor X logs in to squabble some more.
He sees your move. He blinks once. He blinks twice. The steaming testosterone clouds his Macbook completely, he lets out a primal roar, the neighbour's cat turns to stone. You've fucked him completely.
Hold your horses, though. This game can change quickly. If you don't get the desired response, you've also fucked yourself.
Assuming Competitor X was operating at a lofty 100% ROI, you have gorged his entire pie and reduced it to crumbs.
He has no motive to regain #1 spot.
He will struggle to see why any affiliate would play by this rulebook, probably determining that you are a brand advertiser, a bigger affiliate than himself, or as I have seen happen to amusing effect on several occasions - the 'traffic source running internally'.
But he'll also fall back in line and settle for second place.
24 hours later, after massively raising your bid, you can pause the spook tactics and lower the bid to just above Competitor X. Having reluctantly settled for a competitive second place, he may not notice that the top bidder is now skimming ahead rather than blazing in to the distance.
This strategy works best on traffic sources where the bids aren't listed and you are only competing against one aggressive affiliate. If the dogfight involves three or god forbid, four hungry mouths, then you are unlikely to pull this off without sodomizing your own profits and becoming an unpaid mascot for somebody else's brand.
There's only one thing worse than a brand advertiser bidding like a blind fool and that's you when you've accidentally become one.
Which leads me to the most important point...
Keep Your Margins on Your Mind, and Your Mind on Your Margins
It's common sense but often goes forgotten:
Play the ball, not the man.
The second your focus changes from making money to engaging in the dogfight of beating somebody's ego, that's when you know you've lost.
My business objective is to make a lot of money by generating leads at a margin that I'm happy with.
Nothing more, nothing less. This objective does not include being bidder #1 on every traffic source I find.
There will always be somebody driving more volume than you, and somebody happy to operate at a lower margin. That's why you need to learn to cut your losses when a bidding war isn't worth winning.
You can still make a lot of money by settling for a smaller slice of the pie and scaling sideways in to new markets, new countries and new traffic sources.
When the tactics above do not work, which they often won't if your competitor has more ego than sense, it pays to call a truce while you're operating at a margin that you are happy with. Take second place and outwork him. Increase your output in new markets, optimize internally and start a game of lead-quality attrition.
If your competitors are spending every waking hour adjusting bids without working on their overall lead-quality, they may quickly find themselves ousted from the market completely. Often the best way to win a bidding war is simply to stay in it.
Easier said than done, but never worth forgetting.
Great stuff Finch and thanks for making it freaking hilarious! It was a good read, lol.
As always , good shit Finch!
very useful thread, thanx
Love it Finch!
Oh man, a-fuckin-men.. nice post man. The amount of times I've matched bids as a gesture of 'let's both/all milk this, instead of fucking ourselves' for the message to be unheard is just stupid. A lot of AMs don't realise that 99% of bidders can raise their bid, but would of course prefer not to. I've also done the 'outbid by a stupid amount technique' on a bidder that kept outbidding me every few hours. The placement wasn't even that good lol, after 24 hours I matched their bid and they stopped being a outbidding shitkent haha.
Yeah, it's particularly annoying in the smaller markets.
There are some traffic sources where you can settle for anywhere in the top five positions and still receive good traffic. You might get one bumberclart bidding top dollar, way above the average, to scare away the competition (and I've done it myself), but affiliates will generally fall in line.
Things can get nasty in a small country with limited volume and 2 or 3 affiliates, though...
Before you know it, the profitability is gone.
I've noticed different traffic source have different types of bidders.
On 1 source i'm on it seems like a very friendly place. I match peoples top bid and they match mine and there is peace in the world. It's somehow common knowledge to match bids in this place. On other sources i'll match a bid and 101 people outbid me that day!
I'll usually spike bids, out bid and lose money for a while to clear them out.
Then start slowly lowering my bids back to profitability.
If you're in the PPV game here is a quick tip from an old thread, still valid.
http://stmforum.com/forum/showthread...ot-Your-Back-)
The bidding wars on PPV are what turned me off the platform.
Even if you found something profitable, if that something was on a competitive target, you might as well have turned an egg timer and waited for the profitability to disappear.
Seems affiliates never learnt to play nicely as kids!
Then again, it's naive to expect any less. If somebody is willing to swallow a smaller margin, and capable enough to at least match your conversion funnel, you're toast.
Love the easy way of writing it with examples!