ultimate guide to bidding strategy

The ultimate guide to PPV and PPC bidding strategy in affiliate marketing

1081 754 Magdalena Kukułka

There are many components to a successful affiliate marketing campaign. If you read various guides and tutorials you might see different comments about what’s most important. Some might say it’s the offer everything depends on, while others will say it’s the landing page that can make or break your campaign.

Either way, one thing you need regardless of all the other variables is a bidding strategy. No matter how well you prepare and research your campaigns, if you don’t set the correct bids you’ll crush the potential of your campaign.

Read on and find out how to design a flawless bidding strategy that will take your PPC and PPV campaigns to the next level. 

How to prepare a bidding strategy?

Before you decide on the bids you need to consider all the variables that dictate the bid amount. Since you’re here for the bidding strategy, we’re assuming you’re familiar with the basics of affiliate marketing. We also hope you’re armed with the best affiliate marketing tools and that you’re determined to make that campaign work.

Now, onto the first step.

Choose a niche

The higher the bid the higher the quality of traffic you’ll receive. This sentence is bound to be repeated frequently throughout this article because it really is the premise of effective affiliate marketing. If you choose a demanding niche such as casino, gambling, or nutra, you’ll get significantly better results with higher quality traffic.

This is exactly why you tend to see such serious offers advertised with native traffic, social media ad campaigns, and even on Google Adwords. These are ads of the highest quality and they tend to be run by experienced affiliates who can afford that $1 cost-per-click… and that $20 cost-per-click as well.

Decide on the targeting

Leaving expensive traffic sources aside, GEO targeting is another variable that entails completely different bidding strategies. The same bid price that can buy you the highest quality in one GEO will buy you mere scraps in another.

Geo-targeting matters and you need to familiarize yourself with different tiers of traffic as well. While it’s usually the offers and creatives that need to be adjusted for a particular audience, budget and therefore bids will always be affected by the affluence of the targeted audience.

Plan campaign strategy

Yes, there’s a lot of strategizing before executing a perfect PPC/PPV campaign. But that’s usually not enough either, as campaign behavior is often so unpredictable that you’ll need at least two backup plans. And that’s what we need to discuss.

Before you set your eyes on the prize you need to decide whether you want to test quickly by setting big budgets, no limits, and high bids? Or maybe you just want to dip your toes and give an untested offer a try by setting minimum bids and testing a small bit of traffic. Make a note of what your testing phase will look like and on what conditions you are going to increase your ad spend.

Determine your budget

The key to successful advertising is the budget. Yes, usually it’s a big budget that can ensure your success. However, the most important thing is to calculate a budget based on your offers, targeting, the number of landing pages/ads, and all the other smaller components. 

You won’t make money with affiliate marketing if you’re not careful with your budget. Sometimes it can be easily counted how much you should spend on each part of your advertising campaign… but sometimes it’s just a gamble. If you pour more money into one source, you’ll either end up with a goldmine, or you’ll spend it all just to find out that this source clearly doesn’t perform well for your offer.

Either way — research how much money you need to make your PPC/PPV campaigns work and plan accordingly.


How much money do you need to be successful in affiliate marketing?

Learn about budgeting here!

How much money do you need to be successful in AM


Talk to the affiliate program/network account manager

They are here to help you. They also have vast experience and knowledge about the platform. Whether it’s a traffic source account manager or affiliate program support person, you can and you should ask them questions. 

Problems with the affiliate link? URLs not looking perfect? Need tips on optimizing? Or maybe a fairly specific whitelist for a keyword campaign? Affiliate account managers are there to help you. They know a lot of details and technicalities. Quite often they might even know what kind of landing page works best for a given offer. They are simply your shortcut to success.

Prepare creatives

Before you prepare a bidding strategy you need to think about how many creatives you’re planning to use for one advertising campaign. You’ll need to count your ads, landers, and other variables to know where to allocate your budget. You’ll also need some backup ideas in case one of your ads has a disastrously low CTR.

Although the amount of creatives affects your budget more than bids, you never want to launch a campaign unprepared. And you never want to keep an underperforming lander running just because you have no other options.

Learn about the bidding mechanism

Now onto the more technical part. Each traffic source has a different kind of bidding mechanism in place. While for the most part, they are very similar – you pick a bid and it wins you traffic. However, in detail, the inner workings of bidding algorithms are different between networks.

In Zeropark, the campaign bid will work towards averaging the cost of bids, so if there are sources within a campaign that are cheaper the algorithm will pay less for them but because of that, it will be able to pay more for sources that are more expensive.

For example – you set a campaign bid of 0.04. Source 1 has an average bid of 0.01 and source 2 has an average bid of 0.07 – if we bid 0.04 on both we would be overbidding on the first one and underbidding on the second one. That’s where our algorithm comes in — it will bid 0.01 on the first and 0.07 on the second — still reaching the average bid of 0.04 but winning an adequate portion of traffic on both sources.

The average bid is also shaped by the custom bids set within the campaign.

In general, if you set the campaign bid in Zeropark, the algorithm will try to get you all kinds of placements, some cheaper and some more expensive than the bid price you’ve specified. This is beneficial when you’re in the test phase because you get to try placements from outside your bid range and that lets you gain an insight into the earning potential of a source.

Remember that’s how the Zeropark bidding algorithms work. This is not the case with many other ad networks. Some might use a similar algorithm under the name SmartCPM while others might only operate with flat bids where you’ll always pay exactly the same amount of money for placement, and you will only get access to placements with that exact price.

Domain Redirect Bidding

What’s the difference between pay-per-click (PPC) and pay-per-view (PPV) bidding strategies?

Pop or domain (PPV) traffic and push (PPC) have a different nature. In PPV, you pay per view, so your ad (be it banner ads, some form of display ads, or a full-screen popup) costs you money regardless of whether someone clicks on it or ignores it completely. Volumes for pop ads are usually huge and there’s no guarantee that all your ads will be clicked on. That’s why the clicks are cheap and low bids can be effective in certain GEOs.

In PPC advertising, which is limited solely to push traffic, you don’t pay for each time your ad shows up as a push notification on someone’s desktop or mobile device. You only pay for those times when people actually click on the notification. PPC campaigns tend to be slightly more expensive but they also have a slightly higher success rate.

PPC campaigns have one more characteristic trait. Since you only pay for notification clicks, there are sometimes clicks and conversions that come late. Your ad can be sent out in the morning but a busy user will only notice it in the evening. They will like the ad so they’ll click on it and end up converting. If you’ve run out of your funds early afternoon, you might end up with a negative traffic source balance.

And an unexpected commission. 

traffic costs

How to bid effectively?

If you’ve gone through the obligatory preparation checklist (the first part of this article), you should already have a good idea of what your campaign is going to look like.

You should have a good idea of what you’re planning to promote, how much you can invest, what’s your goal (how much you’re hoping to earn, realistically), how much time do you intend to spend on gathering data, what’s your target audience, and what’s your fallback plan.

Now it’s time to plan your bidding strategy.

Set budgets

First of all, the most important thing you should think of at the beginning is setting budgets. You don’t want to launch an advertising campaign with unlimited budgets and $200 on your account balance. Even when this is essentially what you’re planning to spend on gathering data. You still should set a target daily budget and a source daily budget just to ensure even distribution of traffic.

Here are the recommended budgets for the test phase of your campaigns:

  • Campaign budget: there is no set number here. If you’re planning to leave your campaigns unattended for a couple of days, you should set the campaign budget as the number of days x daily budget. This number will also depend on what you’ve decided regarding the budgets.
  • The more you have, the more you can allocate to a single campaign. You should also revise that number after you’ve finished testing. If the campaign has an ROI higher than -30% you should consider increasing the bids and budgets. If the ROI has been consistently negative you might consider killing the campaign.
  • Daily budget: 100$ – while this might be a lot for a low payout Tier 3 campaign with low traffic volume, it will also be not enough for a gambling campaign in the US. It’s just a recommended number that gives beginners enough wiggle room to test their campaigns properly.
  • Source budget: $20 – this is a number that should allow you to test each source if you’re using the recommended bids. If you don’t set a source budget, some sources will spend significantly more than others as the volumes of traffic differ significantly between sources.
  • Target budget: $5 – targets are simply websites. So, once again, you want to spread your budget evenly here to prevent one website with a high number of ad placements from taking over your spending.

Affiliates having their piece of golden cake

Set average bids

This is a common mistake for beginners. While traffic sources always specify the minimum bid that will allow you to buy traffic, you should never create a campaign with the goal of buying the cheapest traffic available.

Of course, some offers will work with very cheap pop and push traffic, however, it’s hardly possible to earn money with that approach. If you want to receive quality traffic you need to choose average bids or higher. Bid price has a direct impact on where and how your ad is displayed. But it’s also dictated by the competition.

Your main reason for always starting with the average bid should be the possibility of competing with other affiliates on an even ground. If you’re buying cheaper traffic you’ll most likely receive very little volume and quality will be rather low. If you’re ready to use higher than average bids you’ll need to prepare a bigger budget but you’ll gain access to a good volume of high-quality PPC/PPV traffic.

Starting with an average bid and adjusting from that gives you the best possible starting position.

Split different targeting into separate campaigns

Building on what we’ve said before – each campaign component has a different sweet spot. If you target mobile and desktop devices together you’ll be overbidding for one of them and underbidding for another. It’s the same case with running multi-geo campaigns. Unless you’ve checked before what bid will give you the same results in both (or each) country, you should launch separate campaigns for different setups.

Additionally, different landing pages often work better for desktop vs. mobile campaigns so it’s better to create separate campaigns that give you the additional benefit of gathering more accurate data for each.

Increase bids incrementally

Your $0.0002 isn’t bringing you enough traffic? And you have a very low win ratio? There is a very simple solution to that problem. You should increase your bid but you should do it very slowly.

Going from a fraction of a dollar to $0.005 will never go as you expect it. Your campaign will be flooded with traffic and not all of it will be good for your affiliate offer. In short, you’ll lose money.

If you want to prevent that you need to watch your win ratio and increase the bid by a very small number. The optimal win ratio is between 70%-90%. If you’re anything below that, it might you have not uncovered the full potential of the source. Increase the bid and watch the performance. If at 70% the ROI is still way below zero, it might be your sign to pause the source.

On the other hand, if you achieve that impossible 100% win ratio you can safely lower the bids as you might be overpaying for traffic. It’s a simple equation – low win ratio means you need to bid more while high win ratio means you can bid less.

Set a conversion cap

The higher the bid, the higher the traffic quality. But once you do achieve the perfect balance between the cost and quality the last thing you want is scoring conversions that you won’t be paid for.

Always make sure that if your affiliate offer has a daily or weekly conversion cap, you’ll apply that conversion cap in your ad network. Don’t lose money for unwanted conversions.

Also, always check if you’re driving the correct traffic to your offer. Just in case it’s mobile-only and you’ve launched the campaign on desktop and are wondering why your conversions aren’t counted in the affiliate network. Just don’t make the most common affiliate marketing mistakes.

Biggest bidding mistakes in PPC/PPV affiliate marketing

Now that you know what to do and how to plan your bid, it’s important to have a quick and easy list of what not to do. Be aware of the common mistakes so you can avoid them. Here’s a short list:

Never start with the lowest bid possible, choose the suggested bid instead

Don’t launch a multi-geo, multi-platform campaign with a single bid

It is possible to bid too high so watch your win ratio and lower the bid if the win ratio is in between 90%-100%

Never forget about setting source and target budgets

Never change the campaign bid abruptly, always incrementally

Don’t change bids based on a feeling, only do it based on data

Conclusions

In the case of PPV and PPC advertising, advertisers need to prepare before each campaign launch. The preparation around each venture consists of many steps.

First, affiliates have to search the web and read about what works, what are the recent hits to promote, and which ad formats are best to use. It might be pop traffic with keyword targeting, or paid social media advertising, or maybe even Google ads? The choice should be made based on previous experience and budget.

Once that’s determined, an affiliate marketer needs to join an affiliate network or affiliate program and pick an offer. The next step is preparing a landing page and an ad copy. Then, it’s time for picking keywords, devices, OSes, and GEOs to target.

Finally, tracking needs to be set up and the affiliate needs to make sure the link works. The very final step is to set the bid, save the campaign and watch the traffic flow.

 

Is your bidding strategy ready?
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