You will not be doing affiliate advertising very long before you begin making mistakes. The purpose of this article is not to prevent you from ever making a mistake, but rather to alert youto the danger.
Hopefully, you will avoid taking some backward steps as a result of reading this, but my main goal is to help you recognize and fix the mistakes that you do make as quickly and painlessly I am speaking of your wallet now as possible. The key is to watch carefully for the inevitable errors that will occur and also to learn from your mistakes and turn them into positive learning experiences; if you can do that, you’ll be just fine.
COMMON MISTAKES
There are a number of common mistakes you can expect to run into sooner or later if you are in this business long enough. Here are some of the most common:
• Bidding mistakes
• Client compliance guidelines
• Bad links
• Changed or canceled program terms
Keep a close eye out for these types of mistakes and errors; if you identify and correct them as quickly as possible, you can limit the damage they might otherwise do to your bottom line.
Let them slip by unnoticed, however, and they can quickly cause incalculable harm.
Bidding Blunders
Perhaps the most common mistakes are made in the bidding process.
Predictably, these mistakes can be some of the most costly. Outrageous expenses are the obvious danger, but an error in bidding can hit you just as hard when it cuts your revenue instead. Let’s start with your maximum bids, or maximum cost per click (CPC).
Maximum Bids. Amistake in setting or adjusting your maximum bid naturally carries with it the risk of inflating your costs, lowering your revenues, and generally ruining an otherwise beautiful day. It doesn’t matter if the mistake is a typo the search engines will not care or a gross miscalculation on your part, the results will be equally painful. With a new campaign, the danger is especially great.
Any time you set or adjust your bids, you must double-check the amount for typos, and thoroughly think through your decisions. If you raise your bids, do so slowly, and be aware that the resulting increase in volume could be exponential. Double-check your maximum daily budget and imagine the worst: the entire amount spent, and your CPC at the full maximum. If you can livewith that as a result (and that result is always a real possibility), then fine. If not, lower your maximum daily budget, or do notraise your bid quite as high.
Conversely, when you are lowering your bids, be aware that the drop in volume could also be exponential. If you believe you can make a successful campaign more profitable by lowering your bid and increasing your margins, by all means try it. But watch the results closely, because if the volume drops more steeply than you predicted, your earnings could drop beyond the amount that a wider margin could justify. Losing money that should have come in can hurt just as much as paying money out.
Above all, you must monitor your campaigns closely when you make changes to your maximum bids, and most especially when raising them. You should never raise your bids just before going to bed, out to dinner and a movie, or on a trip to the beach, for instance. Make sure that when you make these changes, you are able to monitor the results for at least a few hours. I have lost hundreds of dollars in just a few short hours because of a poorly placed bid, and it takes only a few brief distractions to turn a hundred-dollar mistake into a thousand-dollar one. If you have already made other plans that will demand your attention, make your bid changes when you are finished.
Maximum Daily Budget. My first truly costly mistake occurred on a campaign I created on a third-tier search engine I was trying out for the first time. This campaign was a duplicate, essentially, of a campaign I had been running on Google, and my earnings per click for that campaign were roughly 16 cents. I set my maximum bid at a conservative 10 cents per click, and then I set my maximum daily budget at about $3,000. This was the same as the daily budget for my campaign on Google, and Google had never exhausted this amount in a single day. Considering my expected EPC of 16 cents, I was not concerned about the remote possibility that this new search engine could exhaust this amount in a single day. I checked in on the new campaign about an hour after I started it, and I was delighted to see that my actual cost per click was a mere 3 cents, and that I had already received hundreds of clicks.
True, part of me already new that if the volume was that high, I should lower my budget or turn off my campaign and wait until my actual commissions began to be recorded before I went any further.
However, based on the fact that my nearly identical campaign on Google was earning over 16 cents per click, and my costs on this new campaign were only 3 cents per click, I reasoned that even if the traffic from this new search engine performed just half as well, I would still make a tidy profit. I decided to let it ride. A few hours after that, I began monitoring commissions (this particular affiliate program usually posted commissions within about four hours of the actual event).
There was nothing. Not one dime. I rushed back to the new campaign, already in considerable distress, and discovered the clicks reported already numbered in the thousands (and the past hour or two was likely not yet included). I turned the campaign off immediately, and then I watched. Eventually, some commissions did begin to post. I made roughly $300, in fact.
The final total number of clicks I received was almost 9,000, however, and even at just 3 cents per click, I had spent close to $3,000. My losses were enormous. I had only just begun search marketing, and my net profit to date at the time was only a few hundred dollars. My error had put me thousands of dollars in the red, and I very nearly gave up on search marketing and the millions of dollars I have made since.
I have since made even costlier mistakes (a $20,000 loss in one day is my current record), and although I now earn enough to survive even a very costly mistake or two, it never feels good to part with so much money and get nothing in return. So remember, when you set your daily maximum, never set it higher than the amount you are willing to lose.
Another thing to keep in mind is this: The daily maximum you set can be exceeded sometimes by quite a bit if the volume of traffic is high enough. Most search engines will guarantee only that your average daily budget at the end of the month will not exceed your limit. This means that in a single day, you can in theory go 30 times over your daily budget and still meet the site’s guarantee if your traffic for the next 29 days shuts down or slows to a trickle. I am not saying you are likely to ever have your daily budget exceeded by a factor of 30. I am only saying that you should be aware that it is technically possible.
My worst such experience to date was a new campaign I set up on a popular search engine that had its daily budget of $100 exceeded sixfold in just a few hours. The site was kind enough to credit back to me a portion of this amount, but it happened again almost immediately afterward before it finally sank into my head that the daily budget maximum was not really a daily limitation. This does not mean that your daily budget limits are meaningless.
For the majority of your campaigns those with light to medium traffic volume the daily budget should work quite well on a daily basis. It is only for high-volume campaigns, where the traffic is generated quickly enough to reach your limit in minutes rather than hours, that huge excesses may occur. The key to avoiding this is to always use the traffic estimators provided by most search engines when creating or editing campaigns.
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06242010
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