I need a little help understanding, I think I have it - please see. (4)
I need a little help understanding, I think I have it - please see.
Hi,
I've been doing a lot of reading on this forum over the past 2 days, im not struggling with the technical stuff and I understand whats going on but just want to double check before I go ahead and start testing / running a campaign.
So... From the sounds of it you find a large network which allows you to target ad campaigns at targeted demographics - FB is a good one but because of the restrictions/policies its very restrictive on what types of ads you can run - so that's why I see POF everywhere because its over 18's (allowing most ad types gambling, dating etc) and its got a massive user base so the traffic is there even when you drill down into the demographics.
You always create a landing page because one, some ad platforms don't allow aff links and two, you can optimise the landing page to squeeze more.
By the looks of it, you don't push product sales (shoes for example) - you push lead-gen, app installs, signups etc.
So an example would be:
Network: POF
Demographic: Women, UK, Big
Offer: One month free Gym Membership / App install for calories burned in a day (just example)
Ad(s) Angle: 'Lose weight fast and get men chasing you' (just example)
Landing page: message matching, social proof, trust elements, hero shot etc
But the maths confuse me:
Lets say you pick up a 0.25% CTR from POF and your paying £0.75 CPM, your offer pays out £2 per lead, traffic conv 2% - your ads got 50,000 impressions.
0.25% of 50K = 125 clicks
50K impressions costs = £37.50
2% conv on 125 clicks = 3 conversions
3 conversions = £6
Cost £37.50 - Revenue £6 = -£31.50 loss
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To me those stats seem very realistic but from what I have seen some are talking about 25% CTR's etc.
How am I looking at this wrong?
Please help.
Those stats seem reasonable, though a 2% conversion rate is prohibitively low given the ad CTR/CPM and offer payout.
25% CTR will be that of the landing page, not the banner ads.
Both the typical ad and lander CTR will vary between traffic sources and verticals but expect banner CTRs to be in the 0.1-1% range with lander CTRs in the 5-50% range - usually an order of magnitude difference.
Yep - one thing that confuses people, with good reason, is that we tend to refer to "CTR" for both banner and lander CTR, and it can be hard to tell which is which.
We should really start to refer to them as bCTR and lCTR to make things clearer 
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On your examples, meanwhile - what you're describing looks like a campaign with a very low conversion rate, and also an unusually low payout. Try the math again assuming a $4 payout and a 10% conversion rate - very achievable for a POF campaign.
£14.50 profit - that does look more appealing.
Only reason why I mention those low figures is generally from past projects thats the sort of thing I have seen, so email list building although it was double opt-in
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