Maximum CPC Based On Affiliate Commissions

[moneydrop2021]

Considering the current high cost per click, what risk management strategies are you implementing? Historically, I've typically capped the maximum bid at 1% to 3% of the commission. For instance, if the commission is $20.00, my maximum bid per click would range from $0.20 to $0.60. Additionally, my maximum budget for an initial campaign was set at $60 (three times the commission).

 

[JeppyG]

I'm not sure what kind of ad you're running. But I'm used to running search ads going to my landing pages. And the answer depends on the EPC (earnings per offer click, not ad click).

These aren't real values, just simplified so it can be explained and understood easily:

If I'm earning a $50 commission per sale or lead, or whatever...
And it takes me 50 clicks to get a conversion, then I'm earning $1 per click.

If my EPC is $1, then I have to try to get my traffic to the offer page for a dollar (if I'm building a list), or less (to be profitable).
Let's say I'm not building a list (which can be profitable on the backend, long term) just to keep it simple.
I want to get offer clicks (or hops) for like 95 cents to be conservative.

If I want 95 cents clicks to the offer, and my landing page is converting at 50%, that means I want to get like 45-cent clicks to my landing page.

So I'll set my target CPC to $0.45.

It's not how it will work exactly...

But the ideal scenario is:

I'm getting $0.45 clicks to my LANDING PAGE.
Assuming my page converts at 50% which turns these clicks into OFFER clicks (hops)...
Then I'm getting an offer click (hop) for $0.90 or so...
And if I'm earning a dollar per click, then I'm profitable.

Note: Not real numbers, just explaining a concept of basing the budget from the EPC.

I hope this helps.

 

[moneydrop2021]

I'm not sure what kind of ad you're running. But I'm used to running search ads going to my landing pages. And the answer depends on the EPC (earnings per offer click, not ad click).

These aren't real values, just simplified so it can be explained and understood easily:

If I'm earning a $50 commission per sale or lead, or whatever...
And it takes me 50 clicks to get a conversion, then I'm earning $1 per click.

If my EPC is $1, then I have to try to get my traffic to the offer page for a dollar (if I'm building a list), or less (to be profitable).
Let's say I'm not building a list (which can be profitable on the backend, long term) just to keep it simple.
I want to get offer clicks (or hops) for like 95 cents to be conservative.

If I want 95 cents clicks to the offer, and my landing page is converting at 50%, that means I want to get like 45-cent clicks to my landing page.

So I'll set my target CPC to $0.45.

It's not how it will work exactly...

But the ideal scenario is:

I'm getting $0.45 clicks to my LANDING PAGE.
Assuming my page converts at 50% which turns these clicks into OFFER clicks (hops)...
Then I'm getting an offer click (hop) for $0.90 or so...
And if I'm earning a dollar per click, then I'm profitable.

Note: Not real numbers, just explaining a concept of basing the budget from the EPC.

I hope this helps.

You are correct that we need to pay attention to EPC. I always try my best to have CPC below EPC.

 

[JeppyG]

Yes, especially if you're not sending directly to the offer (which affiliates don't normally do), because you still have to factor in your bridge page's conversion rate.