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feeling stuck: what's wrong with the math? (6)

09-03-2014 07:31 PM #1 enrico (Member)
feeling stuck: what's wrong with the math?

Hello there!
I have a question for you:
my banners usually get (what I think is quite) a high CTR, well above 1%, generally in the 1.6/2% range. Conversion on those clicks is around 12-18%.
Are this numbers any good?

When I look at the steps about campaign optimisation, I always read about "cutting" the ads with low ctr (below 0.1% or so), but mine usually are above that treshold... so I feel I'm kinda stuck right now.

Of the three campaigns I started, none of them was profitable (even if it looks like there a positive pattern), and I don't understand if it is because conversion needs to be higher, or if I'm overbidding for the clicks (or if the offer is the problem).
Or if for example it could be an angle problem (even if I think that with the wrong angle CTR should be lower)...

what do you think? any advice is welcome :-)

PS: I'm direct linking right now, so no LP whatsoever....

09-03-2014 07:43 PM #2 cmdeal (Veteran Member)

Quote Originally Posted by enrico View Post
Hello there!
I have a question for you:
my banners usually get (what I think is quite) a high CTR, well above 1%, generally in the 1.6/2% range. Conversion on those clicks is around 12-18%.
Are this numbers any good?

When I look at the steps about campaign optimisation, I always read about "cutting" the ads with low ctr (below 0.1% or so), but mine usually are above that treshold... so I feel I'm kinda stuck right now.

Of the three campaigns I started, none of them was profitable (even if it looks like there a positive pattern), and I don't understand if it is because conversion needs to be higher, or if I'm overbidding for the clicks (or if the offer is the problem).
Or if for example it could be an angle problem (even if I think that with the wrong angle CTR should be lower)...

what do you think? any advice is welcome :-)

PS: I'm direct linking right now, so no LP whatsoever....

The only number that is really important is profit. Since that is negative, your numbers are not good.

Profit is revenue - cost.

So either 1) your revenue per conversion is too low, or 2) your cost per conversion is too high, or 3) both.

So, you need to figure out which of these 3 is causing your losses.

Caurmen wrote a brilliant post once about conversion economics and math that you should read. You will find it very helpful.

09-03-2014 08:02 PM #3 lavamyz (Member)

hey @cmdeal - do you know what that post is called?

09-03-2014 08:49 PM #4 dr_ngo ()

There are many other variables to test you didn't mention: the offer, the targeting, the bids / type of bids, landing pages, etc.

I'm curious why you keep saying your ads are good. A "good" CTR is relative. You may think your CTR is good at 2%, but your competitors could be doing 12% CTR. Always work on improving it.

09-03-2014 09:32 PM #5 enrico (Member)

Quote Originally Posted by dr_ngo View Post
There are many other variables to test you didn't mention: the offer, the targeting, the bids / type of bids, landing pages, etc.

I'm curious why you keep saying your ads are good. A "good" CTR is relative. You may think your CTR is good at 2%, but your competitors could be doing 12% CTR. Always work on improving it.
Well, it was not my intention to say that that my ads are good :-) I'm saying that most of the guides here advise you to cut ads below 0.1% ctr, and I don't actually know what to do because basically I don't have any to cut...

And yes you're right, I did not mention any specific variable, I was trying to pose a more general question. I'm stuck because I'm missing something here.... like... the relationship between angle, ctr and conversion: for example, given that your ad is not misleading, if people are clicking it, and it's not converting (or it's not converting enough to be profitable), then it could be that A) the offer is not convincing enough or B) you have "stimulated" the wrong needs of the audience (wrong angle) or C)...(out of ideas)....

My point is: with the three campaigns I've setted up, I've always come to a point where I did not know if I had to try to improve CTR (with new banners), if I had to change the angle (or the audience), if I had to lower my bid, or if I had to quit the offer allthogether...

So this is prolly just a whine/rant, because I'm struggling to find my "next action"...

Quote Originally Posted by cmdeal View Post
So either 1) your revenue per conversion is too low, or 2) your cost per conversion is too high, or 3) both.

So, you need to figure out which of these 3 is causing your losses.

Caurmen wrote a brilliant post once about conversion economics and math that you should read. You will find it very helpful.
I'll look for it then, thanks for the advice :-)

09-04-2014 12:05 AM #6 zeno (Administrator)

12-18% conversion rate from clicks would generally be considered good... so chances are it's your traffic source costs are too high.

Are you paying per click? Or CPM? If the latter, CTR clearly needs to go up. If the former, it could be your bidding strategy.

Of course, the offer payout kinda sets a floor here that determines what you need to beat on the advertising side.

Caurmen's post: http://stmforum.com/forum/showthread...ill-Make-Money

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