Cashing In On Media Buys Without Re-bill Offers

A huge myth has become apparent in the last several months with re-bill offers becoming few and far between.  For whatever reason some affiliates think that because a lot of re-bill offers have been pulled (due to a massive amount of complaints as well as merchant problems) that you can no longer make good money media buying.  This couldn’t be further from the truth.

Those of you that are not familiar with a ‘re-bill’ offer, many became very popular over the last two-three years, promoting products such as acai berry supplements, colon cleansers, teeth whitening trays, and business opportunities (a/k/a ‘make money online’ products).  The products were priced as low as $0.95 for just shipping and handling but would later go on and bill the consumer’s credit card (14 days later) $180+.  The aggressive billing would continue until canceled by the user. Without expanding further on the ‘re-bill’ business model you can get the idea how this became very lucrative for affiliates.  Simply collect $0.95 from the user and get paid $30+ for the sale.

Google Adwords caught onto this business model fairly early and placed a ban on offers that followed this business model (or advertisers who used deceptive marketing).  This lead to many affiliate marketers doing media buys to promote these products.  Media buying, also referred to as Display Advertising, occurs when you purchase banner inventory on a site, network of sites, or an ad exchange (ie: AdBrite). Media buying is a very powerful resource that has the potential to generate almost an unlimited amount of traffic to your offers.

In my opinion media buying is one of the most power ways to drive traffic to products because of reach and effectiveness.  It can be compared to doing a television commercial.  Simply target your demographics and begin generating results.

Following the re-bill ‘fallout’ what other offers can become profitable on a media buy?  Many affiliate networks offer payouts by CPA (cost per action), CPS (cost per sale), and CPL (cost per lead).  The re-bills fell under ‘CPA’ as affiliates were paid once the consumer ‘paid’ the $0.95 shipping and handling fee.  An area that has been overlooked recently is the CPS (cost per sale) offers.  These offers pay you a percentage of each sale.  Some more than others.

When you’re media buying everything basically boils down to your acquisition cost.  In Layman’s terms, acquisition cost is how much spend it takes before you see a conversion.  If the CPS offer you’re promoting pays $100 you want to have your acquisition cost lower than this to make a profit.  If the offer is paying you $100 the cost to the consumer is going to be greater.  This must be taken into consideration when conducting a media buy.

Some affiliates feel that because a product’s cost is greater than $5 (to the consumer) it’s impossible to promote via a media buy.  This is not true.  The more the offer costs to the user, the more the advertiser is able to pay you, and in return, the more room you have to optimize and make the buy profitable.  Look at it this way…  If an offer pays you $30 but cost the user $0.95 you have to make sure your acquisition cost isn’t greater than $30 to make a profit.  If an offer pays you $100 but the cost to the user is $200 you have to make sure your acquisition cost isn’t greater than $100 to make a profit.  With more than triple the opportunity cost you have to convert a much lower percentage of your traffic to become profitable.

While 5% of your traffic may not be interested in purchasing a product the cost $200, 2% may, and that could be enough to keep your acquisition cost inline and profit from a CPS media buy.  Let me provide a real-life example.  We’ve been promoting CPS offers for a long time now (I promoted my first back in 1999).  I’ve made a fair amount of money by just placing CPS advertisements on some of my websites.  By doing a media buy with CPS offers I’ve been able to increase my profits big time.  Last month we promoted a product that cost consumer’s $200 via a media buy.  While you can be skeptical, with the proper optimization we turned this into a $1,000 – $2,000 net profit a day buy by testing multiple creatives and landing pages.  For the first 15 days of the buy we spent $45, 389.00 buying impressions.  During those 15 days we made $46,814.10.  Now before you ask, ‘Ryan, why in the world did you tie up so much cash for so little profit?!?’ let me explain…

The first couple days of promoting a CPS offer via media buying can be VERY aggravating.  Since you buy impressions by the CPM (cost per one thousand impressions) you want to find the creative(s) that send the most people to your landing page for the lowest price.  Out of those clicks you also want traffic that is targeted and that will convert.  You then want to test SEVERAL different variations of landing pages to find the one that works the best with the creative that yields the highest CTR (click through rate).  Once you find the ‘winning pair’ you can profit big time!  This does not happen over night, it’s an optimization process, but can payoff generously.  If you have patience (and some capital) you CAN successfully promote CPS offers with a media buy.

Did you give up on media buying when the ‘re-bill’ business model came under fire?  You can learn more about media buying by downloading my FREE ‘Media Buying 101 Guide’.

This guest post was written by Ryan Gray, President of Dual Alliance and an active blogger at SuperAffiliateTwins.com.