After much thinking, I’ve decided to share some of the banner arbitrage techniques that allowed me to create some of the most successful performance based banner campaigns ever. For almost 60 weeks I had the same banners up on advertising networks, day after day making ridiculous amounts of money. During that period I bought probably over $24 million in banner campaigns in almost every single advertising network that exists with in many cases profit margin of anywhere between 40-50%. These campaigns consistently worked over and over again, while brand campaigns consistently cost me money when agencies didn’t pay their bills, paid late or underpaid. Here are how they worked, and how I believe they can continue to make anyone money for anyone involved in media buying.
1) Use as many creative versions possible.
Talking with many of the arbitragers out there, they tell me the same thing: they do really well at first and their profit margins drop extremely fast because their creative gets stale. Since they have found a working creative, they keep on using it over and over again, even after people steal it. This method of using the same exact creative causes faster and faster burn out and lowers your profit margin. Have many, many options, some of them with just slight changes. Move a graphic over, change the text color, use different photos.
2) Do heavy optimization based on numerous factors.
Each set of creative should be duplicated to optimize based on a variety of factors and be keyed to those factors. Of course you should optimize based on ROI, but you need also to target the banners to other things including geo-targeting, time of day, age groups and so on. The reasoning is that different people will be attracted to completely different creatives. If you are buying enough media, the ad networks will not charge you any more to do those targets than buying a general campaign that is RON, so this makes more sense and produces higher profits. Take a group of 100 creatives and set it to optimize for example only to people in NYC and you’ll find very fast which creatives have great response only to that region. Again, this technique produces higher profit because you are only serving to specific people, instead of just specific sites (which is the normal optimization procedure).
3) Do not be tempted to trade volume for profit.
Too many affiliates get greedy and want to make quick cash now, so they over-buy and lower their profit margins way too fast. Right now when I look over advertising networks, one thing I see is way too many campaigns that catch fire and a month later burn out. Networks that are experts at this game know that long term money is always a better friend.
4) Use â€œVideoâ€ Flash.
This is probably one of my most successful techniques and networks always asked me how I could afford to put video in my campaigns and pay the streaming charges. It was simple, I never actually used video but had very small clips compressed and actually placed into the flash file and repeated over and over again. For example, I would create a dating banner with a girl dancing in front of the camera, but it was only a few second clip repeated. You are looking for immediate reaction in a DR/Affiliate campaign, don’t forget. The user will see something and respond, so it doesn’t matter if it’s a real video, the perception that it’s a video is all that matters.
5) Change up the campaign/landing page you are sending the banner with unbranded creatives.
Some campaigns may not like this, but try to get permission from networks to not use their branded creatives and change where the banners are clicking to. The first reason behind this is that you will be able to find which campaign has a higher ROI and also as mentioned in #2 optimize even based on that. The other reason is to alleviate your risk. Many years ago I had a campaign with eAdvertising for a dating site that month after month they paid me on time, the dating client had no problem with the traffic and suddenly I was stiffed for almost $200k because the client said the leads weren’t converting. We all know the issues. Luckily for me I was running that same campaign to the same advertiser on 4 other networks.
Remember, the idea in all the campaigns is to have as many people click on the banners as possible, get as many people to the landing pages of your advertisers. There are so many articles on landing pages optimization, so much on different tools to use but the easiest way to still make money is to get tons of people using these techniques to click on a banner, go to a website, fill out an offer, sign up for a product
This guest post was written by Pace Lattin, who has been working in the Interactive Advertising Industry for almost 15 years, having been involved with founding Winstar Interactive (fka Cybereps) to creating the publication ADOTAS.com.