Create Affiliate Offers on the Fly by Arbitraging

This is a guest post by Sam Sim, co-founder of Guppy Media. Many thanks to him for giving us a tour of his office and introduction to the Guppy team, these guys truly rock!

Everyone would probably agree that in order to maintain real value as an ad agency and or network is to either have control of our own, proprietary and internal campaigns (by developing them internally) and or controlling your own internal publishing sources.  As for publishing, the options that include either one or combination of the following; a) media buying (on either CPC, CPM or CPV) b) securing exclusive AOR relationships with third party publishers and c) creating your own internal websites and ranking and building visitors and traffic over time.  In parallel, as for campaigns, there are many different ways to produce internal campaigns.  One particular, has been paying off quite nicely at least as it relates to virtual currency / social media as a publishing type.  I mean to say “paying off” in the sense, that there has been a growing demand for such offer types, as there is a fundamental demographic match between this campaign / offer type and the core target audience of social media.
 
In particular, what I am referring to is downloadable applications and free downloadable content, available to users.  Essentially, end users (or those who you wish to convert) are messaged with some type of free value added content, utility or application.  Examples of such content, could be entertainment related, such as free games, screensavers or IM clients as examples.  Other forms of free content could include browser extensions such as comparison shopping agents, as well as applications such as p2p agents, file sharing apps and various plug ins.   One could ask, how these applications are then monetized and secondly, what is the most effective way to incorporate a CPA / bounty in order to secure publishing and distribution?
 
When it comes to monetization of your free application, one of the primary keys is to really put on your media buying hat.   What I mean to say is that you will have to really understand and be prepared to measure back end metrics, as the “guts” of the free application (your affiliate offer) tends to monetize best when you’ve incorporated it with search components, as one major option.  The following would be examples of search components; search feed, xml feed, DNS homepage reset, 404 error page, search reset, inline PPC as well as contextual links.  To finalize your downloadable offer, you will want to really consider incorporating the aforementioned search elements.  These components however, typically pay on a PPC.  If this is the case, the next step then is to commit a small test budget by determining the CPA / bounty that you will want to start with (in this case CPI – or Cost Per Install).  Think about a batch of how many leads you would like to start with to assess overall click to conversion as well as quality.  In this example, presuming you wanted to start with a test budget of $1000 and your CPI per install is $1, then you could commit to 1000 installs on the publishing source of your choice.
 
After you’ve determined your test budget, you will also need to verify the PPC that you are paid per component.  Now you’re ready to begin testing!  In particular, you will want to look for a) click through rate from creative and b) click to conversion from application download start to completed and successful install (payable action to your affiliate).  Your publishing source is key – the more targeted and the higher quality source you have, the presumption is that your installed base or LTV per user should be longer and more extended.  You will need to determine your ideal LTV per user per install to verify whether your profitable on the dollar you just paid per install.  Of course it always helps to split up your test across various sources.
 
-          Sam Sim, Co-Founder, Guppy Media

Top Related Posts: