Most paid traffic campaigns you launch will start off losing money; that’s just a fact of marketing you will have to accept. The long term profits will come later, after you’ve optimized the campaign by removing poorly performing keywords and traffic sources, and increasing bids on high converting ones.But of course it’s always painful to keep running a campaign that is losing money every day, even if you know it will become profitable eventually. So let’s talk about ways to decrease costs as soon as possible and get closer to profitability without blowing through your budget.
Optimize for an Easier Conversion Target
As you know, you need to wait until you get to ~30 actions before you can get enough statistically significant data to make a decision. If you’re selling physical products, you might have to wait a pretty long time before getting to 30 sales for every single ad. This goes directly against our prime objective of building many campaigns and learning fast. To get meaningful data faster, it might make sense to make your initial conversion goal something with a higher conversion rate, like an email opt-in on a squeeze page or even a click through to your shopping cart or sales page.It’s a lot easier and cheaper to get 30 emails than 30 sales (or even long form leads). Optimize for those, and you’ll be able to see what works and what doesn’t much earlier.With me so far? How about optimizing for time on site or bounce rate? Very few advertisers do this, but the ones that can do this successfully are reaping the rewards.This is especially important for CPV/popup traffic, where even small differences in time on site may be a good leading indicator of conversions.If you’re direct linking to an affiliate offer, it may be worth it to switch to a landing page, just so you can collect this type of data and optimize for clickthroughs.This kind of optimization becomes a lot easier if you have good numbers about your entire sales funnel. If you know that 10% of email opt-ins consistently convert into sales or that your EPC on clicks from your landing page is always around $0.50, you’re not risking much by focusing on clicks instead of conversions.
Cut off Losers Fast
Earlier I said that you should always wait until you get to 30 actions before making a decision about a traffic source. This is true if you have an infinite budget in a market with perfect information. But since we don’t, it may be worthwhile to cut a few corners.If a campaign you just launched isn’t converting at all, it might make sense to kill it early, before you have spent lots of money testing, and move on to greener pastures.Sure, you’ll miss out on a few good keywords due to random chance. But accepting a higher incidence of Type II errors may enable a good chunk of your budget to live to fight another day.This is especially important for traffic sources like Facebook Ads or RON campaigns anywhere, which can devour budgets very quickly if you let them.
Optimize Your Landing Pages with Cheaper Traffic Sources
It’s certainly true that different landing pages convert differently with different traffic.But some factors, especially your headlines and calls to action should affect conversions in a somewhat consistent way, regardless of traffic source.When you’re in the early stages of testing landing pages and collecting data for a campaign, try to do it as cheaply as possible. That means getting traffic from Bing/Yahoo through AdCenter, going to PPV networks with lower minimum bids, targeting a country with cheaper traffic like Canada, and so on.Then, when your landing pages have been split tested and optimized as much as possible, you can move over to a more expensive but higher volume traffic source like AdWords.See also this excellent post by Finch on fighting back against rising click costs.