I had no idea how to tackle bidding when I first started running campaigns.
My reaction (and I’m sure of many newbies) was to bid the bare minimum. I wanted to play it safe and not lose any money. Once I started tracking and testing I realized that bidding higher was more profitable most of the time.
Why Bidding Lower Doesn’t Mean Increased Profits
In a normal business you can save money by buying your goods for cheaper.
This logic doesn’t always work when you’re buying traffic.
John is making $1,000 a day profit and bidding $1.00 CPC on his campaign.
He lowers his bids by 10%, and expects profits to increase as a result. What happens is he ends up losing money.
The premium placement he’s making money from costs a minimum of $1.00 CPC. By bidding lower he loses access to the placements that is making him money.
If a placement makes money then there’s going to be higher demand for it.
That’s why it’s important to track the profitable of each placement.
Let me give you another example on why bidding higher works better.
Popunder traffic sources have a bidding system.
Newbie Note: Popunder Traffic is when a client goes to a website such as Bodybuilding.com. Most “ads” are shown on the website. A “Popunder” means your pre-sell page, is going to be window that’s Underneath. The client will see it when they move their window or exit out of the main browser.
The higher you bid, the earlier your ad will show. Having your ad shown earlier is much more desirable for conversion rates.
The client could see 5 different popunders during their browsing session. If a customer is going to browse a website for one hour and sees 5 dating ads…which one is he most likely to convert? If you bid low at #5, he has already seen the ad 4 times already.
If they were in a buying mood then they are more than likely to buy from the first ad they ad. The rest of the ads will be shown, but he already converted.
One more reason why I tend to bid higher is because of volume. Yes bidding higher can lower profitability, but volume is power. Volume gives you more leverage for higher payouts, and preferential treatment from networks / advertisers.
I’ve learned that affiliate marketing can be counter-intuitive.
Bidding higher can help me become more profitable. Uglier ads / landing pages can increase conversion rates. The secret of success in this space is testing.
p.s. I’m sorry if bids everywhere increase overnight