It's no secret that affiliate marketing is more alive than ever and is gaining momentum each year. The market is endlessly growing, as evidenced by numerous reports on the internet.
Here's a quote from one of them:
The affiliate marketing industry is expected to grow globally to approximately $14.3 billion in 2023 and further to $15.7 billion by 2024. This growth is marked by a significant increase in funding for affiliate marketing companies, which raised over $1.5 billion in funding across 232 rounds by 2023, showing a 15.38% increase from the previous year.
Due to the relatively low entry barrier and accessibility to nearly everyone interested, affiliate marketing is an increasingly attractive income source, enticing more newcomers with the prospect of replacing the classic money-earning model of 'work-home-work,' offering freedom and the opportunity to work for oneself. The internet is overflowing with articles on how to start in affiliate marketing, where it's almost always written something like find your niche, find your product, find your source, make content, and happiness will follow. Someday... If you're lucky. While in itself, affiliate marketing encompasses a huge audience of specialists promoting various offers through buying traffic in advertising and social networks, aiming to resell it and profit from the margin. This includes media buying, also known as traffic arbitrage, which is what we'll discuss today. This won't be the basic advice you can easily Google, but rather practical tips that, if not make you super successful, will at least help you save thousands of dollars on tests and launches if you, dear reader, are among those who've decided to try your hand in this challenging but promising field.
But, who you are though?
And yes, why should you keep reading? Who am I? It's simple: I started my journey in 2015 with traffic arbitrage and worked with verticals like consumer goods, e-comm, nutra, dating, e-gaming, etc. Today, I am the CMO of one of the trackers that helps arbitrageurs and media buyers maximize the efficiency of their advertising campaigns. But this discussion isn't about that. There won't even be the slightest product promotion in this article. So I'll try to be brief and to the point.
First rule of business, protect your investment.
Etiquette of the Banker 1775
It sounds grandiose, but it's as relevant as ever. There's no point in arguing that anyone who decides to engage in media buying (traffic arbitrage) does so for money and with the aim of making money. The ultimate goal is to earn, which means you must be extremely responsible with your investments from the start and always protect them.
What does this mean?
For successful traffic arbitrage, you need to consider the following financial aspects:
- What will the affiliate network/advertiser pay you for? (CPA, CPI, COD models)
- How much will they pay for each such action?
- What are the conditions for withdrawing money?
- Will there be a 7/14/30-day hold or additional validation of applications?
- Is the payment method suitable for you?
- Is there a minimum balance required for withdrawal?
Eye-balling the math doesn't work and can play a nasty trick on you. Many beginner media buyers, especially those with some campaign launch experience, might roughly calculate, thinking, 'I had clicks at 50 cents, so with $100, I'll get 200 clicks, and surely every fifth person will definitely buy, so I'll easily have 40 sales.' But then it turns out there are only 3-4 applications and two of them with abandoned carts. Next, you add more budget (borrowed from a friend or worse, on a credit card), continue the real purchase, and then can't withdraw the money from the affiliate network because of a hold or there's no minimum amount, or your applications suddenly fall into the trash category. Believe me, many beginners burn out at this stage because they eyeball the most positive scenario and start a project where the finances just don't add up.
Therefore, always start with the most negative scenario (in different sources, the CTR of your ad will vary from 1% in push networks to 20% and more in contextual advertising), approximately 5-7% CTR, and up to 10% CR from lead to sale. Always make a specific forecast, including how many sales you can achieve with a minimal working scenario and how long you can run the campaign.
This approach will give you an understanding of how much money you have for launching and conducting advertising activities to be profitable. Will you have enough working capital to stay afloat until the affiliate network pays you?
When planning your budget, experienced media buyers will always tell you that you should be prepared to part with an amount you're willing to lose and forget, as if you had gambled it away in a casino. Advertising banners in networks are not cheap, and as soon as you launch your first campaign, your balance will start to diminish rapidly with each click or impression. Therefore, realistically assess your capabilities and calculate a budget that will be at your disposal with a few clicks, so you can pay the bills in a timely manner and not halt advertising campaigns in case they are successfully optimized.
What gets measured gets managed.
Peter Drucker
Here, we will talk about the importance of fully understanding who your customers are and why they buy, namely, about tracking your traffic. Modern ad accounts, like Facebook and TikTok, can provide a lot of information about which ad sets work and bring in clicks: from which placements the transitions occurred and which creatives were effective. However, this is still not enough for maximum optimization of your ad campaigns. To get the best price per click and, consequently, the lowest CPA cost, you absolutely need to establish a complete data transmission chain: ad network - offer site - ad network. For this, an ad tracker is ideal, helping you set up sales funnels, organize data transfer from the affiliate network to the tracker and from the tracker to the ad source, aggregating all the statistics in the tracker and giving a complete picture of your customers. As I promised, there will be no advertising here, but mentioning this is necessary, as it's a must-have.
The main thing is that all this needs to be set up from the very first click. Many beginners are lazy about this and end up launching their ad campaigns blindly, leading to unnecessary expenses, when this difference could have been profit. Therefore, before starting work, make sure that all UTM tags are set up, the tracker is connected, the transfer of clicks to your site and applications from it to the affiliate is uninterrupted, and that all this information is returned back to the ad source.
The only way to get smarter is by playing a smarter opponent.
Charles Hapaku Jr. Fundamentals of Chess 1883
Here are a few reasons why you shouldn't work with others' setups. Before their first launch, many beginners read success stories on forums and other sources, where fellow professionals managed to "acquire" traffic in a certain way, ultimately bringing them 300+% ROI and recognition from the community. All this is wonderful, of course, and reading such cases is definitely worth it to broaden your horizons and adopt general conceptual ideas that you can adapt for yourself and try in a new traffic source. But you should practically never replicate them exactly.
Firstly, a topic that makes money will never be written about here and now. Because if many people find out about it, the scheme will lose its relevance. Almost all successful cases you can read in open sources are either irrelevant or miss some important detail that prevents you from achieving the same result. If you're really set on working long and effectively, you'll have to develop your own approach and, through trial and error, find a setup that works for you. Once I was recruiting people to a team and training them, and I can confidently say that even if you take one setup and two people try it, one will succeed and the other won't. So, don't just copy others' setups. Analyze, study, create your own, and work on that.
Do what you love and the money will follow.
Marsha Sinetar
Here, I want to talk about choosing your niche and selecting offers. Usually, internet articles say something like choose where they pay more, and that's it. But in reality, there's a very important point here that can affect your entire future work. When choosing a niche and specifically between offers, choose what is closer to your heart, even if the payment is lower. The thing is, traffic arbitrage is a stressful activity, like trading, and it's directly related to financial losses, especially in the beginning. So the closer you are to the topic you're promoting, the easier it will be for you, the more accurately and expertly you can approach creating creatives and attracting audience attention, meaning the efficiency of your work will ultimately be higher. If you decide to chase money and promote offers you know nothing about and that don’t resonate with you, it will be very hard to understand how to properly sell and engage the audience.
As a result, you'll be chasing potentially higher earnings but not understand how to achieve them. And don’t be upset if the payouts in your offer category are lower than in others. The market is formed for a reason: if the payouts are lower, then most likely, the traffic is cheaper, which means your costs will be lower, and the ROI – acceptable or even better.
Mobile
Yes, it's cliché, I know. Everyone talks about it, but many of us forget it. You'll likely set up your ad campaign, tracker, and all tags via desktop, but you'll be doing it for mobile devices. According to the SaleCycle Ecommerce Stats & Trends Report (2023), 75% of online sessions are on mobile devices, dominating for years. So, make sure the site with your offer is adapted for mobile devices, the layout looks and works as it should, all buttons are clickable, and the application is processed correctly. Check everything from Android/iOS tablets and mobile devices. If you don't have them at hand, at least use simulations in Chrome Browser.
Personal Brand as the New Era of Advertising
And the last point for today - the approach in content. Yes, advertising in sources like Instagram, TikTok, Google, and others works and is used by millions of marketers worldwide. But I want to share an "insider tip":
we are actively transitioning into the phase of promotion through personal branding, and it will be real people, content creators, who become the main advertising asset in the coming years.
If you want to keep up with the times, you should look at emerging and promising bloggers and other influencers to build long-term relationships and create native and useful content for their audience. Before rushing to the ad network and investing your budget, think about who in your vertical could become an ambassador for your brand and lead to hundreds or even thousands of sales through native content. This is not a panacea, of course, but rather a final piece of advice from the author.
I hope this information was helpful. If you've really decided to get into traffic arbitrage in 2024, be sure to try and use the above tips. Stay tuned with technology and follow me if you found this interesting, there's more to come.