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4.9/5 – 10

Introduction to paid traffic

Affiliate Marketing from paid traffic perspective

In this CPA world, there two kind of people: those who buys traffic and who sells it.

These last tend to rank articles on search engines to monetize traffic and earn with services like AdSense. When someone clicks on your banner AdSense, basically, you’re getting money from selling a visit to someone else’s site.

But, who buys traffic?

People who buys traffic are called advertisers and we can classify them in two groups.

Regular advertisers

People or agencies who buy traffic for their sites/brands without measuring how that traffic behaves and doing little or no optimization work. They may have their own or third party services or products that they try to sell, and also have a great tools variety to analyze users and dominate the platform they use. A performance marketer ensures that if you are spending money on advertising, the return should be greater than the investment (ROI – Return On Investment). We are going to focus on this type of advertisers.

The fundamentals of performance marketing

First, we’re going to explain two metrics:

CPC (Cost Per Click)

The quantity of money we pay for every person who clicks on our ad.

EPC (Earnings Per Click)

It’s the amount of money we earn for every click on our ad. It is calculated by dividing our total revenues (by sales or CPA actions) with total clicks.

If the CPC > EPC we’re losing money, because we are spending more than the amount we receive for each user.

If the CPC < EPC we’re earning money, since our profit by click is greater than the amount we spend to get each user.

Performance Marketers

There are more variables, we’re going to talk about them later. But first, you’ll only need the relation between this two variables to establish a basis for performance marketing. Your job as a performance marketer is to get, in one way or another, a greater EPC than your CPC.

But, how does an affiliate make money?

An affiliate earns money promoting offers. They’re third party products that pay an amount for every event, most known as conversion. A conversion occurs when the user makes the required action on the offer site. All you need to know is that all conversions and events can be tracked to the person who’s promoting that offer, to pay the corresponding comission. There are different kinds of offers and each one can have a set of different actions to generate the conversion.

How to find and evaluate CPA Offers?

These offers can be obtained at Affiliate Programs or Networks. An affiliate network is a company that accumulates offers from third parties and makes them available to its affiliates so that they can earn money from them. Affiliate networks generally have a commission for each conversion they make. If a network pays you $1.5 for each conversion of an offer X, the network receives $1.7 from the owner of the offer X for each conversion, making a profit f $0.2.

Affiliate networks usually operate with low risks and depend on volume to make big profits.

Conclusion

A performance marketer makes money running on paid traffic sources: third party deals found on an affiliate network. To make a profit, the affiliate must optimize their traffic so EPC of conversions obtained is greater than the CPC paid at the traffic source.


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