Mixing Lead Quality – Become the "Cook"

September 14, 2013 Posted by Tyler Cruz

While Walter White was able to sustain a 99.1% chemically pure crystal methamphetamine, it is virtually impossible to generate affiliate leads that will result in 99.1% sales for the advertiser.

In this post, I will be talking exclusively about lead generation, not CPA offers that are based on CPS (cost-per-sale) where advertisers are basically guaranteed a profit every single time.

With lead generation (typically offers such as dating, gaming, toolbars, submits, etc. – basically anything that is free for the user), affiliates are simply providing leads to the advertiser that can potentially turn into paying customers. It is up to the advertiser to make the turnover.

As a result, lead generation can be a bit of a finicky realm to deal in, as you will constantly be concerned with lead quality. Or rather, the advertiser of the offer will be. This is one of the main reasons publishers get pulled from offers, if not the top reason.

Be Walter White

In Breaking Bad, Walter White used his chemistry background to enter the dark world of methamphetamine production and trafficking by improving the "quality" or purity of the "product".

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It’s not the best comparison in the world, but lead generation is similar in that every affiliate will have a different quality for their leads. Advertisers with lead-paying offers will always look at your lead quality eventually and will act upon it as follows:

  • Very low or continued low quality: ban you from the offer
  • low quality: lower your payout and/or cap traffic
  • medium quality: do nothing
  • high quality: do nothing (this is when you can negotiate higher payouts)
  • very high quality: typically ask for more volume (again, ask for higher payouts!)

So, what can you do if you have poor quality leads? Are you stuck with a lower payout?

No, you’re not. Not if you become the "Cook".

For example, let’s say your current lead quality looks like this:15

In this example, let’s say you’re sending 3 different traffic sources to the same offer. All of your sources have different qualities of traffic. Your first traffic source is sending in 15% of the traffic and is of poor quality, your second traffic source is sending in the majority of volume at 80% and is of decent quality, and your third traffic source is sending in just 5% of the traffic to the offer, but is good quality.

With this mix, the advertiser will most likely determine that your quality is "okay", and leave you at the default payout. Let’s say that payout is $5.00.

Now, let’s say that you’re trying to increase your ROI by buying more of that cheaper traffic (the low quality stuff) and your overall quality on the offer starts to look more like this:

16

This would be considered low quality by the advertiser and you’d almost certainly see yourself either getting kicked from the offer or else getting a noticeable pay cut on the offer. If the first example paid out $5.00, then this example would probably pay out something more like $3.75 – a 25% drop.

Are You Ready to Cook?

The obvious answer to this issue is simple: improve your lead quality. With experience, you’ll know which sources of your traffic are low quality and which are high, and even on a targeting level.

For example, Facebook is generally very high quality while PPV is not. Ads with "free" in the ad copy or images usually lowers quality while including the price will improve it.

Obviously, this will mess with CTR and prices, and that is where you have to find the right balance and the right mix.

Going back to the situations above, let’s say that you were making $1,000 a month profit with the average quality mix, and $200 a month profit with the low quality mix.

Let’s also assume that the reason you aren’t sending in more high quality traffic (the 5% in the examples) is because it is extremely expensive and you’re only making a 5-10% ROI on it, and that’s only possible on a low volume basis.

In many cases such as this, it is often beneficial to purposely take a loss on some campaigns by buying up more volume of the higher quality traffic, in order to improve your overall lead quality on the offer.

Read that again, because that’s a huge tip for you guys.

This is something I didn’t really realize until not all that long ago. All I looked at was what my bottom line was and how I could scale and improve ROI and profits.

But after getting pulled from so many offers due to low quality, I’ve had to look at things at a more granular level and understand what the root of the problem was and how I could fix it.

The solution was to improve my quality by intentionally taking losses on the higher quality traffic sources, in order to improve my quality as a whole.

Therefore, let’s say you changed your quality to the following:17

This would definitely be considered good to very good quality, and the advertiser would be very happy with it. You’d be able to run the offer uncapped for sure and would almost certainly be able to get a nice bump on the offer.

With this quality in our examples, your payout could be $6.00 – a 20% increase over the "medium" quality example.

But more importantly, in my opinion, is that you wouldn’t have to worry about being dropped from the offer. The advertiser would be happy with your quality and you could work on scaling it (as long as you keep the quality in line!).

Balancing Act

Now, it’s not quite as easy as simply buying up more of that higher quality traffic, because as stated earlier, it’s more expensive and you’re actually taking a loss on it!

This is where you’ll need to do some number crunching and analysis on your campaigns in order to figure out how you can create the "perfect mix" that will allow you to provide high enough quality while at the same time allowing you to scale things up and profit.

Fortunately, with the 20% bump that put your payout at $6.00, this will help to compensate for some of that more expensive traffic. In this scenario, let’s say you’re now making $1,200 a month on the offer.

While not a big improvement over the $1,000/month you were making at "medium" lead quality, it’s still an improvement, PLUS you’re now sending in high lead quality which will allow you to run this offer for as long as it’s available.

There are many other benefits to providing high quality leads as well. For example, many times advertisers only have a certain stock or advertising budget available, and will have a monthly quota that they give each network.

You can bet your ass that your affiliate manager will delegate most of that cap to you since they know you will make the advertiser happy. Remember, the affiliate networks want high quality too because they’ll lose big if the advertiser decides to pack up and leave.

How Do You Know the Quality of the Traffic Source?

Taste it. What does a good chef do when they cook? They taste their food.

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There are various ways to determine the quality of each "ingredient", and it’s a necessity that you run the traffic and test (taste) it first.

One way is to create multiple accounts at your affiliate network (most networks don’t have a problem with this if you’re a reputable publisher) and run each traffic source separately to the offer, and then request a quality check on them from the advertiser after a couple weeks or so.

Another way would be to have the advertiser and your affiliate manager look at your SubID’s, if you’re willing to have them look at that, and determine things that way (although that isn’t always possible).

You could also send the traffic at different times. For example, you might send traffic from Network A for 1 week, then traffic from another for another week, etc.

Another method is to run the offer on multiple networks – just be sure that the path is the same and the advertiser is the same!

In the end, as I said before, you’ll know from experience which of your sources are high quality and which are low.

Be the Cook

Improve your lead quality to an offer by creating the perfect recipe of various traffic sources and campaigns. Remember, it can often lead to higher profits in the end by taking some losses via "investing" in higher quality traffic.

The more volume you do and as you continue to scale, the more that "mixing" or "cooking" in lead generation matters.

You don’t need to put in 100% high quality traffic – after all, that will likely not be profitable for you, but be sure to mix enough in to where the advertiser is happy with the overall quality.

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Posted: September 14th, 2013 under Affiliate Marketing  

48 Responses to “Mixing Lead Quality – Become the "Cook"”

  1. Tim says:

    Solid post, maybe your best blog post yet. Well done! Will you ever offer a paid coaching or course for us to get to super affiliate level?

  2. Sunday says:

    I agree with Tim, solid post… more like solid”food for thought and implementation” post, :)

  3. Jim McDoanld says:

    Great post Tyler,

    I read that some of the guys doing big volumes on facebook have had problems with their ad accounts getting banned (even when keeping within facebooks’ terms). Have you ever faced any issues like this?

    • Tyler Cruz says:

      I was only ever banned once, and that was when I had no idea what I was doing. I’d be a little suspect about those other guys “keeping within Facebook’s terms” though…

      • Dave says:

        How did you get back on FB? I think they require an ID to get on. I’d like to get back on now that I know what I’m doing.

        • Tyler Cruz says:

          I lucked out… I just created another account with the same IP and name. Nothing fake. The only things I changed were e-mail address and credit card (I had a new credit card at that time anyway).

          I hear it gets harder every day to do this though. There’s always the option of buying an account on the “black market” though. They typically range from $5K-10K.

  4. Darek says:

    I love the Braking Bad theme in this post, hehe.

    About your reply above to “Jim McDoanld”.

    Can you get banned if you only create ads that link directly to the affiliate offer?

    And is it better to link directly to an affiliate offer or is it better to create a landing page that would link to that offer?

    • Tyler Cruz says:

      I’ve never had any issues with direct linking. As for which is better – it depends. Gotta test for yourself :-)

      I was going to go all out on the Breaking Bad theme, but was afraid I’d alienate those who haven’t seen the show…

  5. Metz says:

    Improving the “quality” or purity of the “product”, I have no doubt about that.
    Well, that is very necessary in Affiliate Marketing. Yummy and delicious outcome after mixing all these wonderful tips and insights. Thanks Tyler!

    I found this post shared on Kingged.com, the Internet marketing social site, and I “kingged” it and left this comment.

  6. Dr_Ngo says:

    Nice Post.

    I like to think of some sources as “loss leaders.”

    Grocery stores will sell roast chicken and milk below cost in order to get customers to come. The customers will then buy other things so the grocery stores will make more profit overall.

    Some traffic sources can be high quality and low profit, and other sources can be low quality but high profit. I’m willing to run some traffic sources at a loss to increase my quality, and make up the profits in other areas.

  7. Sunday says:

    Lead quality could be crucial in determining what the affiliate marketer should earn. I guess this post has revealed why marketers should be in control of the quality leads they send to the advertisers. The analysis from the Tyler Cruz makes sense!

    This comment was left in the IM news aggregator – kingged.com where this post was shared and kingged.

    Sunday – kingged.com contributor

    http://www.kingged.com/mixing-lead-quality-become-the-cook/

  8. Riza says:

    Contrary to what you said, I think it was the best comparison. At least for the moment. :) Improving your lead quality is a challenging feat, but I’m convinced, after reading your post, that it is indeed an important thing to do for better conversions in the future.

    The rest of the article is very insightful. Nice!

    Found this post being shared on Kingged.com, an IM social bookmarking site. I left this comment there.
    http://www.kingged.com/mixing-lead-quality-become-the-cook/

  9. I have been following this blog a few years ago and I am glad to see you are still at it. Could you give someone with almost no ppc experience a hint on “whats working now” (which traffic sources (paid)) are the new POF etc :) Thx

  10. A little messy first for me before I understood it all, but I have to revise my ad thinking a bit now.

  11. Thomas says:

    Interesting that you call Facebook high-quality, it probably depends a lot on the offer.

  12. Agriya says:

    Hi tyler,
    The way of presenting like a cook for this network traffic in simply cool. There are various ways to check the quality of ‘ingredient’. it is interesting to read. Thanks for the cooking post :)

  13. öksürük says:

    I agree with Tim, solid post… more like solid”food for thought and implementation” post, :)

  14. banka says:

    Improving the “quality” or purity of the “product”, I have no doubt about that.
    Well, that is very necessary in Affiliate Marketing. Yummy and delicious outcome after mixing all these wonderful tips and insights. Thanks Tyler!
    I found this post shared on Kingged.com, the Internet marketing social site, and I “kingged” it and left this comment.

  15. banka says:

    A little messy first for me before I understood it all, but I have to revise my ad thinking a bit now.

  16. Sadek says:

    Interesting that you call Facebook high-quality, but it never worked well for me (may be my fault).

  17. Steve says:

    Great post as always. I take it you don’t bother with CPA affiliate programs then? I guess we should only bother about mixing in high quality traffic once it becomes an issue for the provider?

    • Tyler Cruz says:

      Actually, the goal is to provide high quality BEFORE there is any issue… but usually it’s difficult to do this and scale and profit. Sometimes what I do is run questionable quality traffic on one account, and good quality on another and then see what the advertiser says.

  18. Tyler! Amazing tutorial and i am quite grateful that you share some of your time explaining how you think and plan your affiliate marketing campaigns. I try my self to find reliable sources of paid traffic for my products but weather they are extremely expensive and have a very low conversion or it is cheap traffic and doesnt convert at all. Any advice on where to find the best source of paid traffic?

    • Tyler Cruz says:

      Most traffic sources work, you just need to find the right formula to get your campaigns profitable. Try not to move around too much in regards to traffic sources. Instead, try to really learn one or two inside and out.

  19. JamesTBT says:

    How about this… with the same traffic source, you split your ads up. Have the ads spammed with the word “free” rotating with the ones without.

    • Tyler Cruz says:

      That can help, as would basic targeting changes, but overall the average quality of certain traffic sources are higher at some places and will have a bigger impact. It’d be like running a financial offer and sending between the Wall Street Journal and a kids magazine. One will obviously have a bigger influence.

  20. calderon says:

    I agree with Tim, solid post… more like solid”food for thought and implementation” post, :)

  21. James says:

    Man did I love Breaking Bad! Too bad the show is over.

    I know exactly where you are coming from when talking about lead quality. I unfortunately had the bad experience of producing too low quality leads for one of my campaigns and got banned by the advertiser from running their offer. I learned the hard way but now have learnt to sprinkle in good quality leads such as older women and content that doesn’t mention the word “Free”.

    Another great benefit of producing higher quality leads is getting a payout bump from your Affiliate Manager. Got to love that! Has worked for me in the past.

    Thanks again for sharing Tyler.

  22. Arjun T.U says:

    Wow , just WOW . This post really made me think about the actual effects ( which can be very , very wide ) of Lead Quality . Great post . Keep up the good work .

  23. Great topic .. you’re good.

  24. Robert says:

    Hey Tyler this is awesome, go for it!

PeerFly

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