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Challenge: From -80% ROI to profits (9)

04-29-2016 05:52 PM #1 germoney (Member)
Challenge: From -80% ROI to profits

Hi there,

in this follow along I'm trying to get a campaign from -80% to profits. The offer has very low payout and frequent conversions.
I've already blacklisted some bad performing placements and will continue to do so. I'll cut everything with spent > $1.00 and ROI under -50%. (is this a good formula?)

Cost: $73.39
Revenue: $14.30
Profit: $-59.09
ROI: -80.51%

05-01-2016 01:55 PM #2 germoney (Member)

Blacklisted Desktop and Mobile Traffic. Running only Tablets now. ROI on Tablets at -49% right now!

05-01-2016 01:58 PM #3 randomman (Member)

Interested to see how far you take this. I have a ton of campaigns that I throw out simply because the ROI isn't high enough or doesn't meet my standards. Sick that you got your campaign up to -49%.. are you getting a good amount of traffic still?

05-01-2016 05:06 PM #4 flashpacker (Member)

Interesting that you managed to get a decent improvement in ROI so far by just selecting Tablets. What else do you plan to do
to try and improve? Maybe Dayparting/Weekparting can make some improvements also?

05-01-2016 05:15 PM #5 sebastian_r (Member)

Doesn't smell like a winner.

Cutting a lot with low payout leads to tiny absolute numbers.

Time better spend testing new offers and scaling the winner

05-01-2016 06:36 PM #6 germoney (Member)

yeah it's not the best campaign for sure. But I see it as an experiment of how far I can go.
Next I'm going to optimize model, ISP, placement etc ...
This is not my only campaign. Working on something big right now (massive split testing) and this is my little experiment just for fun not profit.

05-05-2016 07:53 AM #7 vortex (Senior Moderator)

First of all - got your PM - thanks for inviting me to your follow-along!

I've already blacklisted some bad performing placements and will continue to do so. I'll cut everything with spent > $1.00 and ROI under -50%. (is this a good formula?)
Blacklisted Desktop and Mobile Traffic. Running only Tablets now. ROI on Tablets at -49% right now!
Next I'm going to optimize model, ISP, placement etc ...

Yup - sebastian is right as always. If you cut enough stuff you can almost always get green. But what good would 200% ROI be if you were only making $1 a day and spending $0.50? You want to maximize total profits, not ROI.

And unless you're working with a geo that has massive traffic, it's rarely a good idea to start cutting placements in the beginning (except the really hopeless money-drainers). Standard good practice would be to try your reasonable best in improving your funnel through testing offers and landers, and THEN cutting placements etc. that don't give you your desired ROI.

Also - you really haven't given us enough information to make any other suggestions. How many offers and landers are you testing? Which geo/vertical/TS? No you don't have to reveal those if you don't want to, but showing some stats would get you more feedback, and more helpful suggestions.

For a tool that can help you with cutting placements please see:

http://stmforum.com/forum/showthread...Banners-Part-2


Thanks for taking the initiative to start this follow-along!



Amy

05-05-2016 11:15 AM #8 flashpacker (Member)

Quote Originally Posted by vortex View Post
Standard good practice would be to try your reasonable best in improving your funnel through testing offers and landers, and THEN cutting placements etc. that don't give you your desired ROI.
Amy when you talk about the 'funnel' , do you literally mean Lander----------->Offer
or can the funnel also include things such as device type so : Device Type---------->Lander----------->Offer

And then cut placements when this is working?

05-05-2016 02:14 PM #9 vortex (Senior Moderator)

Quote Originally Posted by flashpacker View Post
Amy when you talk about the 'funnel' , do you literally mean Lander----------->Offer
or can the funnel also include things such as device type so : Device Type---------->Lander----------->Offer

And then cut placements when this is working?
That's right - by funnel I mean lander and offer.

Stuff like device type, OS, browsers, time-of-day, carriers/isps and placements - are targeting options. For the smaller geos with limited traffic volumes, it's good practice to avoid cutting until the funnel is good enough to convert enough of the traffic to make managing the campaign worth your while. For geos with larger volumes the same approach could work too, but you'll also have the option of identify one or more traffic segments that are converting well AND giving you enough traffic (e.g. Android + CarrierX) and just target that, and optimize landers and offers for just that segment.

Simply put, general speaking there are 2 ways to get green: You either 1)find a better offer and/or lander to convert more of the traffic / at a higher ROI, or 2)cut stuff that isn't profitable. Yet, the two are dependent on each other - even the best placements won't convert on a crappy offer and/or lander, and vice versa. If you start cutting your way to green when you're still at -80% ROI, you'd need to spend a lot of money to cut out placements etc. AND by the time you're green, you'll only have a trickle of traffic left. The ROI may look good on paper, but what good is making 200% ROI when you're only making $1/day and spending $0.50.

So yes - my suggestion would be to improve the funnel first, then cut placements.



Amy

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