How Much to Reinvest? (5)
Hey guys, I have a mega-noob question that nagged at me for a while.
How much to reinvest in traffic? Is there a rule of thumb or a blueprint to follow?
For example: I have a $99 product > I invest $300 on FB ads > I make 6 sales; that's rounded $600 (so, to my knowledge, I won the whopping sum of $300/100% ROI) > how much do i reinvest in traffic?
Thanks!
As far as I understood it you invest as much as possible as long as it generates additional profits and justifies your working hours.
So you scale up and at one point you find out that putting more money into the game does only slightly increase the profits. That's where you stop.
Or maybe you feel like there is much more market for your product and you try additional marketing channels.
In the end it is always a good idea to have more revenue than cost 
Having 30% ROI on 10.000 spend daily is way different than doing 30% ROI on 1000 dollar spend. That's why it's so important to focus on optimizing. Scaling often means you will pay more and (at the end) face lower CR's because of saturation.
Before you think of scaling, make sure you did everything on cost side (optimize ctr and cpc) to make this as low as possible. Scaling a 50% ROI offer will most of time become 30%(and lower) fast (depends on your angle, potential audience, pixel, account reputation etc ofcourse).
And with 30% ROI (unless you do real volume mentioned in first sentence), you don't have much profit at the end because you probably have to take in account; VAT, cost for tools, cost for hardware, maybe even some VA's or freelancers making landers for you or whatever, renting office space, your lunch, insurances and all other costs which are often covered when you have a job, but not when you are an affiliate).
That's why I only scale (going towards xxxx daily at least) 200% plus campaigns towards big volumes (some exceptions here and there ofcourse)
That means you only scale campaigns with an ROI of 200%?
Originally Posted by chilldude
200% is very high ROI, that you definitely cannot achieve in all markets.
For example in adult dating, that I'm promoting a lot... 200% is pretty much impossible to reach. Maybe on a few small isolated unsaturated sources, but definitely not on large scale.
In the end, it's all simple math... it's better to run a $1000 per day campaign at 20% ROI, which gives me $200 profit, than aiming for 100% ROI and only reaching $100 spend per day which would equal to $100 profit.
You need to reach certain balance, once the ROI comes down to something like 10% it's questionable whether it makes sense to continue as the associated costs can eat up most of it... server costs, bank fees, credit %, currency conversions etc...
And to answer the original question that started this thread... I reinvest everything, as long as the ROI makes sense. So pretty much what larsometer wrote in the first reply... once the increased cost of traffic doesn't bring in any additional profit (don't confuse this with revenue) it's time to stop scaling.
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