Working with high cpc and low payout (14)
Im not sure exactly how to approach this.
My cpc is 0.62 usd
My payout is 2.25 usd*
These are quality clicks, and I believe their is potential here because these keywords are dead on.
This is with no optimization. I spent $16.25 and I got got 2 conversions from that. . . that makes a loss of about 60% This is going to be typical for a brand new campaign with no optimization right?
2.25 / .62 = 3.6 clicks needed for a conversion - that's a tough one 
Its ok to loose money on a new campaing but what you are aiming for here is 30% conversion rate, that's not really all that common. I had 15-20% on decent volume, but 30+ is out of this world, you need to lower the cpc.
Originally Posted by matuloo
Its ok to loose money on a new campaing but what you are aiming for here is 30% conversion rate, that's not really all that common. I had 15-20% on decent volume, but 30+ is out of this world, you need to lower the cpc.Thanks for this, it solves one of my problems that I have had for a while.
You definitely need to lower your CPC if you want to profit. What platform are you on? Assuming FB, find a better image and copy (with emphasis on the image.) If you're doing Adwords, try to find better keywords.
Stick to the fundamental. Let me explain here:
Assuming it's a perfect world there this is no click loss.
CPC = 0.62
CPA = 2.25
Offer CR = 20% (based on assumption, and this is already an insane number)
LP CTR = 30% (assuming it's quality click and your lander presell them well)
Now, sending 100 clicks to your lander would cost you 100 x 0.62 = $62;
LP CTR of 30% meaning 30 clicks would end up on your final offer;
30 clicks x 20% CR = 6 conversions.
Your Revenue = 6 x 2.25 = $13.50
The formula of calculating profit/loss = Revenue - cost
= $13.50 - $62
= ?
So now you tell me if this is workable or not. Now replace the offer with a higher payout ones, eg. $20 CPA.
This is also the mistake a lot of affiliates are making. Without giving the campaign a second thought and analyse it from the fundamentals before they spend money on it.
Advise: Get Your Fundamentals Right and Solid before you start spending money or else it's gonna be a nightmare for ya.
2.25 CPA * 2 conversions = 4,50$ revenues with 0.62$ CPC that means you only got 7 clicks. Getting 2 conversions out of 7 clicks makes a nice CR, the only problem is that the number of clicks is too low to make any conclusive or representative analysis on your campaign performance
Originally Posted by cbrughmans
cbrughmans theory is so smart normal people can't even understand it. Trust me, he's right. After all he's paying for traffic directly with "revenues". This is some next level shit.
What adplatfrom are u using bro?
I had to take a double look at the OP, there's something that often confuses me here...
A lot of people use the term CPA as if it were synonymous with payout, i.e. revenue per conversion event. It's not. The C = cost so by definition it's the complete opposite of revenue.
CPA = how much you spend to get a conversion event (loosely termed an acquisition). Payout = payout. If Payout > CPA then you are profitable.
Let's start calling payouts RPA... or just stick with payouts.
Fixing misnomers is my guilty pleasure 
Unfortunately, with search, it is hard to compete with direct advertisers who make the full margin, while you only get a small payout. It sounds to me like your math is too far off to find profitability that can scale...
Here are a few things you can try.
By my math, if your average cpc is $0.62 and your total spend was $16.25 - you had 25 clicks and 2 conversions.
While this isn't enough data to draw any conclusions, at this point, you can only afford to spend $0.18 a click to break even. Odds are, a bid that low will not get enough impressions, so you need to find ways to improve your conversion rate. So, you can try to improve your Quality Score to knock a few cents off that price.
First, check your search query report for terms that seem irrelevant. Alternatively, find the queries that converted and add them as exact match and focus on improving your quality score. You can write ads with better CTR, or try to add your ad copy to your landing page to improve your quality score. Add all the possible/relevant ad extensions as those can help with QS as well.
You need more data to real analysis like day parting, device bid modifiers, location bid modifiers, etc... but once you have that data, you can try to eliminate wasted clicks, giving you more room to bid.
Without seeing your account or data, I would guess that a QS improvement can drop your CPC from $0.62 to $0.45 if fully optimized. Day parting, device bids, and location bid modifiers (or customer match, RLSA, etc...) can probably shave another $0.15 cents a click off your price.
This will get you much close to your $0.18 max bid target.
Short of doubling your landing page conversion rate, I don't see a viable option at scale to find cheap enough clicks for this offer, although you can certainly get close...
Originally Posted by davidmelamed
what math? Is their a formula that I should be using to estimate my traffic before I launch?
Hello, oneano,
Even though you have a loss of 60% on a campaign you haven’t yet optimized, it doesn’t mean that it can’t eventually become profitable. There’s a general rule out there: it basically states that a campaign with a loss that’s less than 80% can still be profitable. Trust me: this has already happened to our Media Buying team.
For example - when optimizing - you may find a device that’s responsible for the most part of your traffic and gives you neither conversions nor profit. Moreover, you’ve spent $16 and got 2 conversions, which means you need to spend more in order to get more data in case you wanna be able to efficiently optimize your campaigns.
It would be helpful for me to know more:
a) which segment are you working on? Why? Due to the fact that countries with a high volume and a lower payout will allow you to gather enough data at a lower cost to make you able to effectively optimize your campaigns;
b) are you using 3G or Wifi?
c) which adnetwork are you working at?
d) about your method. For example, it’s relevant for me to know whether you’re using popunders or redirects. Why? Because the optimization process is completely different than it would be if you were to be working with banners (this campaign can become profitable, depending on the spots you use).
If you work with banners, bear in mind that people can click on them by mistake. Imagine the scenario where the banner is a fake player: people will click on it by mistake and you probably won’t get enough conversions that’ll allow you to turn a profit.
Let me know some more details so that I can help you!
Cheers!
Originally Posted by oneano
You cannot do any accurate estimates before you lunch a campaign, you need some numbers first. Then you can calculate something and do steps to achieve it. So just like David lined up in his post - at this CVR you need to get the CPC below $0.18. He gave a few very good tips on how to improve your performance - read them again
One of my biggest problems is giving up too early. . . So this campaign I cancelled and started a new one.
Here is my follow along.
http://stmforum.com/forum/showthread...g-Follow-Along
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