I'm having a hard time determining when to completely drop a campaign vs. telling if something has potential. What do you consider a good percentage ROI as an indicator for a camp with potential? I realize for some more advanced affiliates this will be anything non-negative. But for newer people just starting out like myself, what is considered a decent ROI range to continue on with a campaign? Let's assume a fairly standard testing budget of 1.5x payout until you make the decision.
Hello, dakrud_33!
When you want to discover a campaign’s potential, there are other important aspects you should consider before even looking at your ROI.
First, it seems to me that your campaign budget is too low. This budget won’t allow you to understand whether or not the investment was worth it. Why? Because you can be spending a part of your cash on worthless stuff, not becoming able to really find out that which is out there waiting to be discovered!
What I mean is that you should let your campaign run long enough so as to get reliable data you can work with. My advice? Let it run for a whole full day, at least.
In the first days of your campaign, you can check its potential by analyzing whether or not you’re getting conversions/revenues. This is an indicator that you’re a getting good data which you can optimize later on, creating better campaign targets. Meanwhile, try to control your costs so as to avoid getting super negative. How? Look at your parameters’ eCPA (cost per conversion). That’s when you’ll be able to grasp why checking your ROI now isn’t really something you should do since you haven’t done any optimizations to your campaign.
Once you optimize by targeting what’s good and cutting what’s worthless, you can expect to have positive margins. After doing this, you should wait a couple of days to look at your campaign and optimize it once again.
Until now, your campaign was running with what’s supposed to be a good target. It’s only after this second optimization that you should look at your ROI indicator. Wanna know if the campaign’s a keeper? Your ROI should be valued between 30% and 50%.
If your ROIs are higher than this, think about increasing volumes. If your ROI is not negative but your campaign is not giving you a lot of cash, you should decide whether or not you want to keep it.
I hope these tips are gonna help you decide what to fight for!
Cheers!
Thanks for the response
But the thing you said to first look at is whether or not you're getting revenue/conversions. ROI is a function of revenue/investment, so are we not talking about exactly the same thing? I agree that test campaigns should run for a while until you have statistically significant data - I kinda just threw out a random multiplier for test budgeting.
I'd agree, that budget multiplier is waaaay too low.
My usual rule of thumb is to cut an offer after 4x spend on web and 7x on mobile if it hasn't converted at all. Any less than that and you're seriously at risk of non-statistically-significant data - or to be more accurate, you'll only have statistical significance if you're testing for unrealistically high ROIs.
Have a look at the Mobile Cookbook for other guidelines on when to cut - generally I'll cut a campaign only after at least one round of optimisation (cutting terrible placements), unless the performance was clearly universally bad across the board.
I'd also strongly recommend that you consider an initial campaign run promising even if it's running a negative ROI. Again, my usual rule of thumb would be that any campaign with an initial ROI of over -50% has potential. Do remember to check for the infamous "pockets of profit" too - if one ad or one lander is generating -10% ROI from an initial run, even if the overall ROI is -70%, that lander or ad is very promising.
I'm with Caurmen on this one, even -50% can become a positive campaign. For me the most important factor is, whether I can find green or close-to-green targets in the data after the initial test. If I look at the data and all placements are deeply negative, all banners are deeply negative and same for the LPs .... I know this doesn't have any potential and I need to rework the funnel or choose a different offer. But if I see some green placements or some banners/LPs standing out ... I know there is the potential to optimize the campaign somehow.