Affiliate Marketing: The Expected Profits of Each Campaign You Launch
A blog reader wrote to me last week
“Charles, what percentage of campaigns do newbies fail and what percentage do super affiliates fail?”
The question is solid, but lets take it to the next level.
What if we combined the failure rate with the expected value of each campaign?
Before you continue reading, you should understand the concept of expected value first. It’ll change the way you think. I recommend this article by my friend Millionaire’s Math.
A successful campaign for a newbie could be making a $1,000 profit on a campaign. More experienced affiliates like myself would consider $75,000 profit campaign to be considered a home run.
I’m going to give you a framework into how I think about campaigns. This will help you understand failure rate, probability, and give you insights on how to develop your processes.
The 3 types of campaigns
Whenever I launch a campaign, I put them into 1 of 3 categories.
1. Complete Failures:
These are the campaigns that have zero potential.
I launched a mobile pin submit offer in Germany the other month and immediately lost $550. Zero conversions.
I know from experience that this campaign’s a failure and I’m not going to waste anymore money on it.
Why would it fail? Mainly because the offer sucks. Or maybe you’re entering the vertical too late and now there’s over-saturation.
It’s hard for me to analyze why a campaign fails if there aren’t any conversions. I don’t beat myself over it anymore since there could be hundreds of reasons – it’s better for me to just launch more campaigns.
2. OK Campaigns:
These are your average campaigns.
They tend to lose money at first or break even. But at least they show potential.
A newbie wouldn’t be able to do much these campaigns. But a super affiliate can optimize and scale these campaigns.
I launched a campaign that lost $100 a day at first. I applied my optimization strategies and after 1 week it’s making $5000 a day. A newbie? They would’ve either lost money on the campaign, or scale it to $500 a day profit at the most.
What are some ways of optimizing campaigns? Here are 3 easy ones
- Dayparting: Look at your DATA and see if there are certain times of the day the campaign converts better.
- Split-testing Offers: I’ve had profitable campaigns DIE because I was paused on the top offer. A great offer can be the difference between a $0 a day campaign, and a $10k a day campaign.
- Split-testing Angles: Learn the basics of angles
As soon as you launch, it’s profitable. These campaigns tend to rare but it’s an amazing feeling when you find them.
What contributes to homerun campaigns?
1. Getting in a Vertical early. Maybe you’re a pioneer in it and have first mover’s advantage.
2. An INSANE angle
3. a SICK offer
The Probability of a Successful Campaign
Here’s what your TYPICAL newbie failure rate looks like.
Don’t take this formula as gospel since there are too many variables. This is from me observing and training different people, and is designed to help you understand the concepts.
If a newbie were to launch 20 campaigns.
Failures: 15 out of 20
OK Campaigns: 4 out of 20
Homeruns: 1 out of 20
What are your takeaways from looking at these numbers?
Well…newbies fail a LOT. It’s a part of the game.
That’s why it astonishes me when newbies fail 10 campaigns in a row and decide to quit for good. I failed 14 campaigns in a row. It was my 15th campaign that built an empire.
Your goal as a newbie should be to gain experience and start developing an optimization system.
This is why the most important part of being a newbie is to take action. You can’t learn affiliate campaigns unless you launch.
No one got rich from reading forums and blog posts. They can HELP, but you won’t truly understand the concepts unless you’re in the trenches.
What does it look like for a Super Affiliate?
Failures: 7 out of 20
OK Campaigns: 10 out of 20
Homeruns: 3 out of 20
Super affiliates have a much favorable ratio of course.
First off, yes I still fail campaigns. Even after 8 years in the industry, a team, and unlimited resources at my disposal, I still fail.
Do the best poker players win every single hand?
Do the best basketball players make every single shot?
I rather keep it real with you than try to pretend I’m the god of affiliate marketing.
What accounts for the differences in numbers?
With experience they develop systems for optimizing campaigns. They also have better networking skills.
*If you’re interested in learning my optimization system, consider applying for an AFFcelerator workshop.
The percentage of failing campaigns is not really that helpful. Lets take it to the next level and add some numbers.
Failures: 15 out of 20 (75%)
I’m going to assume that when a newbie fails a campaign, they lose around $200 on average.
OK Campaigns: 4 out of 20 (20%)
Each one is +$300
Homeruns: 1 out of 20 (5%)
Each one is +$1000
Failures: 7 out of 20 (35%)
OK Campaigns: 10 out of 20 (50%)
Homeruns: 4 out of 20 (20%)
Here’s an excel chart that better illustrates what I’m talking about.
Basically on average, a newbie will lose $40 for each campaign they launch.
Once they become a “super affiliate” on average each campaign can make +14,000 profit.
Insights to Help You Make More Mone4
How can you take the insights from this article and apply it to your business?
The first one is to lower your failure rate and how much you lose form failing campaigns. You can do this by properly researching campaigns before you launch.
You can also improve your ability to optimize and scale. This is the difference between having a homerun campaign that only does $1,000 in profit vs 6-figures in profit.
Next is to improve your ability to execute. Why do you think all the top super affiliates are teams? There’s a limit to how many campaigns a single affiliate can run and maintain.
The biggest reason why newbies don’t succeed in affiliate marketing is because of their fear of failure.
I wrote this article to let you know that failure is expected. It’s part of the process.
That also gives insight as to why I’m unemotional when I lose money on a campaign. I know with each campaign I have a +EV.