8 Steps to Massive PPC and Facebook Profits

Why have I focused multiple posts on facebook advertising recently?

Simple…facebook is a HUGE traffic source that can churn out significant profits.  I shouldn’t have to tell you that if you’re not tapping into facebook traffic you are missing out on a potentially massive profit stream.

There is a lot of information out there on how to actually start and setup facebook campaigns so I’m not going to focus on that for this particular post.  What I’d prefer to focus on is actually much more important, although talked about less frequently, and that is a strategy for optimizing your campaigns.

Anybody can start up a facebook campaign, but not everyone can optimize a campaign to profitibility, and lets face it, that’s the whole point right?

As with most things in affiliate marketing there are more ways than one to skin a cat.  I’m going to break down the process that we use in-house at my company to optimize a facebook campaign; however, you may find a different method works best for you.  For example, if you have a very small budget, this method probably isn’t the best choice for you.  It is my opinion though, that if you really want to make significant profits quickly with a campaign, this is a good strategy.

Step 1 – Don’t completely re-invent the wheel.  As a good friend of mine says, “SDI…Swipe, Deploy, Improve”.  Don’t get too crazy with some revolutionary new idea for a campaign, especially if you don’t have a large amount of testing capital.  Start with something you see is working with other affiliates, and put your own twist on it.

Step 2 – Target broad.  You want to start out targetting a pretty wide audience, because we need lots of data.  We will eventually narrow down our demographics to the most profitable, but it’s really important to get lots of data across a pretty wide demographic.  So target broad, and we will optimize and attack deep later.

Step 3 – Create multiple ads.  As always, create lots of ads to split test with.  I’m sure I don’t need to go into too much detail here, lets just leave it at, “create a crap-ton of ads and ad variations”.

Step 4 – Buy Data, bid high.  This is where most affiliates go very wrong, because they simply have incorrect expectations.  Just to give you an idea, I expect (and usually do), lose money at the beginning of every single campaign we start.  That’s right, I don’t expect to be profitable at the beginning of any campaign even with all the years of experience we have.

Why do I set my expectation level at losing money?  Because that is what will happen the majority of the time, even for an experienced team like I have.  So if you are a brand new affiliate just starting out, you can be almost 100% certain you will start out losing money.  Accept this reality now and you will grow and profit sooner than later.

You MUST understand as an affiliate that most of your PPC campaigns, especially on facebook, are going to start out losing money.  If you look at it as “losing money”, you are in the wrong mindset.  You need to look at it as buying data.  You are purchasing data to figure out what works and what doesn’t work.  Without buying the data, you can’t turn a profit.  It’s an investment…and one you’re going to have to get comfortable with if you ever plan to be a successful affiliate.

You’ve heard me say it before, but again, make sure that the data you gather is statistically significant before making decisions.  I can’t stress that enough.  This is where budgeting can become a problem for affiliates.  You’ve got to spend some money to make some money in this particular facet of the game.  If you don’t have a decent budget to test with, you should not be starting large-scale PPC campaigns.   If you don’t have some money, find some money by any means necessary.

I like to bid high enough to get a solid amount of impressions quickly.  Why wait 90 days to figure out if a campaign is going to work or not? Lets get some data quickly so we can move on with further optimization.  On facebook, this typically means you need to start your bids at $.35 to $.75 or more per click.  Some demographics of course will cost more than $1, but budget $.50/click across the board and you’ll typically get lots of data quickly.

Step 5 – Start killing ads.  Now that you have broadly targetted with a high bid, you should have received a lot of impressions to multiple ads.  It’s time to start weeding out the ads that are not performing well.  Your measurement of success here is your click through rate, CTR.  You want to shoot for a CTR of .1% or higher typically.

At this point, it doesn’t matter if the ad is profitable or not.  You just want a high CTR right now.  One of the reasons for this is that Facebook will begin to discount your bid pricing for ads that have a high CTR, so hang in there.  Profit margin will come, be patient young grasshopper.  Hang in there, and keep the ads with high CTR…kill the ads with low CTR.

Step 6 – Optimize your targets.  Now that you have some high CTR ads, it’s time to start finding the demographic targets that look promising.  What we normally do is pull the facebook report for responders.  You can find this report in your interface, and it’s very valuable.  Basically this report is going to give you some insight into which demographics are responding best to your ads.  IE, which demographics are giving us the best return on our dollar.  You can combine this with your conversion reports to figure out where your highest ROI is.

Don’t worry if you still don’t find profitable demographics.  If you’re close or break-even…that might be good enough at this stage.  You still may have a winner.  Hang in there.  Kill your targets that are underperforming, keep the ones that are promising.

You should now only have good ads, being served to the best ROI demographics.

Step 7 – Bottom-out your bid prices, how low can  you go?  Now that you’ve found your most promising demographics and are targetting them with the best ads, it’s time to try and turn these campaigns profitable.  To do this, you’re going to start dropping your bids.

Don’t be afraid to drop your bids lower than the facebook recommended bid.  Lets face it, they are goign to try and get you to pay them more than you need to.  Begin incrementally dropping your bids every few hours, while watching your impressions.  When you see your impressions stop, you now know the lower floor limit you can bid.  Usually you will find a happy medium where you are lower than the recommended bid but still getting very good traffic.

Step 8 – If you start to see a gradual drop in your CTR, it’s time to switch up your ad a bit as it has become stale to your audience.  The gradual drop in CTR is probably a result of banner blindness (your demographic getting used to seeing your ad and not paying attention to it any longer).

You should now be profitable with your campaign.  If after you go through this entire optimization process your campaign is still not profitable…then you have a dud campaign.  Time to scrap that campaign and try another, you’ve done your best and bought some valuable data.

In summary, here is the optimization strategy:

1 – Swipe a working campaign

2 – Target a broad demographic

3 – Create multiple ads and variations

4 – Bid high, let the traffic roll

5 – Kill low performing ads

6 – Kill low performing targets

7 – Lower your bids and find the bid floor

8 – Make continual changes to your ads to fight banner blindness