Editor’s Note: This is a section of our Media Buying Guide – Semi Advanced. Check it out!
Every now and then, when analysing the performance of a specific campaign, you may notice a huge variation of a factor Media Buyers love talking about: the payout, or the value you get per each conversion.
If you are a Media Buyer working with Mobidea, you have two options to promote our offers:
1) Smartlink – only one single link, ensuring you that you’ll always promote the best offers for a specific segment (country, operator, operating system);
2) Single offers – when you want to promote specific offers. You’ll basically select which one to use, depending on the vertical you’re promoting.
You can check the advantages of using either the Smartlink or a Single Offer on one of our previous posts
Payout variations may be caused by the rotation of the offers inside the smartlink.
In this article, I’ll take you through the process of dealing with payout variations. You’ll get to understand which decisions you should make on your journey.
Moreover, you’ll learn how to be super profitable even when having to face variation-related problems.
Ready? Let’s go!
For some segments – especially in Europe – the great variety of offers available can also mean that there are huge differences in payouts. In fact, Europe is the continent in which payouts can go from 0.8 cents to 24€. You’ve read it. That’s how wildly these values can vary!
Once you have different payouts, your campaigns will become harder to optimize.
Due to the fact that your optimizations were always based on the same payout. In case there’s a change, the campaign will behave differently and you’ll have to adapt to this new reality. As you can imagine, this can be rather tricky to handle, particularly if payouts keep changing.
Why Do Payouts Differ So Much Inside Campaigns?
As you may know, smartlinks give you the best offers for the current time period. Our powerful algorithm chooses the best offer, ranking it on the basis of its eCPM (revenue per 1000 visits).
However, be aware that offers’ eCPM will always be influenced by both conversion rates and payout.
Indeed, an offer can have a very good payout but – if it doesn’t convert too often – other offers will overcome it. This means that the offer with more revenues by 1000 visits will be on top.
That’s why the algorithm takes offers’ eCPMs and not payouts into account.
By doing so, the offers ranking is based on their performance, making sure the best ones will be in the top position.
Another reason why payouts vary is the fact that some advertisers make campaigns with variable payouts available. This is something that can also impact your results, which means you’ve gotta be aware of it at all times!
On the example below, you can check the top offer (A) that had a sweet payout and was beaten by offer (B) with a much lower payout, for a few days.
Please pay attention to the increased conversion rate of offer (B) impacting the eCPM, allowing you to understand why this offer moved to the top position.
As you can see, offers inside smartlinks can rotate on a daily basis, depending on how they perform (CR and eCPM).
In this case – in order to overcome the eCPM of offer (A) – the conversion rate of offer (B) needs to be roughly 4 times higher than it’s now.
Problem detected – Margin Decreased > Was there a Payout variation? > Let’s solve it!
Think about that great campaign. The one that generated splendid margins and then suddenly – without any competition or optimization – made you feel disappointed.
Indeed, your margins started decreasing to such a low point that you had no choice but to think about giving up.
Take a look at your daily revenues and see if your payout changes. If you notice any variation, there are two possible explanations:
1) you have a new stable payout;
2) you have variable payouts with an inconsistent behaviour. I’m gonna explain the solutions for both these problems in case you’re having trouble with your campaigns.
Bear in mind that these solutions are only to be used when you realize there’s been a drop in your margins.
#1 New Stable Payout
Let’s pretend you had your campaign established in order to get payouts of 10€. You’re being profitable and don’t have negative parameters affecting your campaign. In a situation where the payout drops or increases you can expect the following scenarios:
I – Scenario with a new payout of 15€:
Did you know that even when your payout increases, you can still lose margins?!
In this scenario, you have to keep an eye on your conversion rate (CR – the number of visits needed to get one conversion). It can happen that – with the newly increased payout – you have fewer conversions. This means that, while still being profitable, your margins can decrease.
To improve them, you’ll probably have to adjust your bid according to your eCPM. Even so, there’s no need – at least for now – to change the campaign targeting (devices, browsers, etc.)
You should understand that such an increase in the payout is usually not this dramatic and you always need to wait for data in order to analyse and act accordingly.
II – Scenario with a new payout of 5€:
In the first days – in a situation where the payout drops and you can’t afford a specific parameter due to the lower payout – you’ll have to act on the target side. With time, your CR can increase, which is great! This happens because the cost per acquisition is lower which means you’ll expect more users to convert!
After you’ve analysed your campaign’s new behaviour, you can see whether or not you have to change your bidding.
Please note you should retest the old target for both scenarios, since it can work with the new type of payout 😉
#2 Inconsistent Payouts
Here you’ll face a completely different challenge. When you have inconstant payouts inside the same campaign, optimizing becomes a tricky business. Why? Because you don’t know what payout to expect.
In order to deal with this issue, I suggest you try one of the three following optimization choices:
I – Use the average payout value of the last days to optimize:
This is a safe approach if your payout variations don’t diverge too much. If the variations occur on a daily basis, the best way to look at your parameters’ eCPAs (effective cost per action) is taking an average of the several payouts into account.
A good example would be getting payouts of 8€, 10€, 12€ and 14€. Here, the average payout is 11€. This approach allows you to stay safe, fighting for what you’re bidding without losing money from conversions with lower payouts.
II – Take only the payout that makes your campaign profitable into consideration:
This is a good strategy if you’ve realized the payment variation was sporadic. By doing this, you’ll be able to maintain both your target and position, since you’re expecting to receive a certain amount of payout.
III – When the other two options don’t work and you keep losing money:
If you’re a sharp Media Buyer that’s always ready to embrace new challenges, don’t even think about giving up on a particular campaign! If there’s money to be made, then you know you’ve gotta do your best to grab some of that cash!
Here’s what you do:
a) look at the single offers available for the segment of your campaign and search for a top offer;
b) ask your account manager for advice on that particular single offer;
c) go for it! By using a single offer, your payout problems will become a mere memory! You can now optimize your campaign, knowing you’ll always get the same payout. Moreover, you will benefit from having solid targeting, adjusted to a specific offer.
Trust me: this is something I can guarantee based on my personal experience.
Now you know there’s always a way! You can fight against variations that you probably think you can’t control.
By doing this, you’ll be able to improve your campaign’s performance, making those massive margins, and counting that shiny gold like a true pro!
Go for it!
I’m here to answer them all!
Rodrigo Sengo - Europe Expert