Today we want to share with you some of the biggest misconceptions in this industry involving the payout and revise them, step by step.
What you will learn from this post:
Before launching campaigns, there’s a considerable amount of factors to take into consideration.
The usual dialog between both parties (advertisers and publishers) on this subject includes terms such as conversion rates, eCPMs and of course, payouts.
A payout is a value you earn for each conversion you get. The average varies according to business models (CPI, CPA, CPL among others) and of course, according to the segments you are targeting. These include not only target countries, but also carriers and operating systems.
Additionally, your offer flow will also play a prominent role in the value of its payout. A direct billing flow will surely convert easier than a credit card billing, but the payout will be lower. The big difference is because, with a CC validation, the user will be directly charged which leads to a lower conversion rate
At first sight, you can immediately verify how payout values differ from one another due to the country where the offer is launched. Usually, an offer payout is much higher in a country where the cost of living is also more significant.
There are several advantages in using payouts. They give more precise optimizations, better CR (better flow) and require low investment to collect more data in a fast, and easy way.
On the other hand, in specific media buying strategy, lower payout doesn’t work. For instance, if you are buying on traffic sources where the minimum CPC is 0,10 €, the payout will be 0,45€. It will be hard for you to have a conversion every four clicks.
You’ll notice a lot of affiliates confusing a payout’s value with its performance, in the affiliate marketing community.
The truth is, it's not a synonym of performance; it's a fixed value that you will receive only if the offer converts. Let's get one thing clear: a payout is not a performance metric.
Consider the following case as an example to best figure this out:
An advertiser presents you an offer, but you are hesitating to run it due to the low payout. What can you do? You can ask him first about the offer’s conversion rate. That way you can see if this offer may or may not be profitable for you.
Also, keep in mind that there’s a higher chance that you’ll spend more money testing and optimize an offer with a high payout.
Advertiser X shows you two offers:
1. Switzerland Offer – PO: 15.00€
2. Brazil Offer – PO: 0.45€
While you can test (and optimize) the second offer with lower by only spending 25€, the first one requires significantly more investment to be appropriately tested ( a minimum of 100€ just for doing a relevant test).
Having a bigger or lower payout is not the real question!
To have excellent results in affiliate marketing, you always have to put performance indicators (eCPM) as your KPI. Only by following this metric, you are going to be able to extract the maximum from each campaign.
Additionally, if you want to have success and achieve your goals, you have to test lower payouts and use the advantages in your favor.
We hope we could clarify some of your doubts. Let us know what other topics you would like to debunk with us.