Affiliate Math 102

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yubrew

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This post is inspired by SEO_Mike's affiliate math 101 post a while back.
This happened to me last week. Thought I could generalize it, and turn it into an interesting 2-part problem.

So you're running an offer on X Network, and it's doing good, steady profit. An affiliate manager from Y Network bugs you to test out their latest and greatest "exclusive" offer. And you split test the offers throughout the day with your favorite tracking system. Here's what you see:

Network Clicks Conversions Payout EPC Revenue
X 350 35 $35 $3.50 $1,225
Y 150 18 $37 $4.44 $666

Question 1: What do you do now? (stop X network offer, stop Y network offer, etc)
Question 2: So being an experienced affiliate, you know that payout is not everything, and that EPC is. So being curious, you run some tests on your tracking system, and find out that even though your EPC on network Y is higher, for some reason, you're getting better ROI from running network X's offer. How can this be?
 


Are you direct linking the offer? If yes, then stop offer X because you're getting a better EPC. And if you find that the higher EPC isn't giving you a higher ROI, you're either having clicks shaved or you're calculating ROI wrong.

If not, then we need the LP CTR stats to give you a better idea.
 
hannahmcintyre said:
Are you direct linking the offer? If yes, then stop offer X because you're getting a better EPC. And if you find that the higher EPC isn't giving you a higher ROI, you're either having clicks shaved or you're calculating ROI wrong.

If not, then we need the LP CTR stats to give you a better idea.
Click to expand...

doesn't matter if direct linking, or using lp
 
Pr0xyhub said:
doesn't matter if direct linking, or using lp
Click to expand...
If he's only given us the network stats, and he's using a landing page, we don't know how many clicks were initially sent to the offer, so what the real EPC is. We've only got network stats to go by. If network X has a LP CTR of 80% and network Y has a LP CTR of 10%, then network X is probably still the best to go with.
 
Esteban Panzera said:
You're definitely getting clicks shaved, already had this problem a while ago :)
Click to expand...
Some software like LT usually shows more clicks and a diluted EPC, and others show less. Best to go by the tracking software epc and make sure the cost and spend is up to date with what the traffic source says.

A problem I found with ROI and p202 is that if you have lots of KWs n shit, and use the cpc update feature it sets all the KWs for that lander / account etc at that one solid cpc so the ROI is being based off that. So you should really look at epc for that kw or demo vs the cpc and probably use excel to work it out.
 
yubrew said:
This post is inspired by SEO_Mike's affiliate math 101 post a while back.
This happened to me last week. Thought I could generalize it, and turn it into an interesting 2-part problem.

So you're running an offer on X Network, and it's doing good, steady profit. An affiliate manager from Y Network bugs you to test out their latest and greatest "exclusive" offer. And you split test the offers throughout the day with your favorite tracking system. Here's what you see:

Network Clicks Conversions Payout EPC Revenue
X 350 35 $35 $3.50 $1,225
Y 150 18 $37 $4.44 $666

Question 1: What do you do now? (stop X network offer, stop Y network offer, etc)
Question 2: So being an experienced affiliate, you know that payout is not everything, and that EPC is. So being curious, you run some tests on your tracking system, and find out that even though your EPC on network Y is higher, for some reason, you're getting better ROI from running network X's offer. How can this be?
Click to expand...

If offer Y is a rebill offer and you are making $4.44 EPC instead of $3.50, then you are making a better ROI on offer Y. Any ROI formula you are using thats tells you different is faulty. Either that or you have managed to find a network that scrubs a $37 rebill and that's ridiculous. Especially when their are so many ones that would never do that.
 
If all other variables are the same (i.e. same LP, same traffic, some dayparting etc), then Offer Y seems like the clear winner (IMO).

If you doubled your clicks to Offer Y (300 clicks), you would hypothetically have 36 clicks which is already more than Network X's 350 clicks and 35 conversions (10% CR). Offer Y is at a solid 12% CR, plus you are getting a better payout which also boosts EPC.
 
Part 1: Trick question, not enough data for conclusive results. I would keep running the offers on a 50/50 test, or put a heavier weight on Y offer. If you do a chi-square test, with 350 clicks and 35 conversions vs 150 clicks and 18 conversions, then you get a chi square number of .67. This means that Y offer has about a 50% to 70% chance that it is significantly different than X offer.

Part 2: It's a clicks reporting issue. Sohan got it :)
Both networks are fine networks to run traffic to, but the way they count and display clicks is just different. So you can't just do EPC vs EPC if the networks are using different tracking systems because they filter clicks differently. So now I do EPC comparison based on my tracking system, which allows for a heads up comparison with the same baseline.

hannah: If you want to measure offer performance, then it should be similar up until you split test the different offers (unless you're doing multi-variate, but that's another thing). So for this example I had same traffic, ad, LP, and rotated the offers from the LP.
 
I'm glad to see another assignment posted. I posted five assignments with various difficulty in SEO_Mike's thread for those of you who want to try them out. :)
 
Y is obviously a larger ROI assuming click prices are the same. It has a 33% better EPC and much better conversion rate+ better payout = BAAAANKK

They both offer different things though. For example, if both offers were topped out in clicks, (small niche) I would say keep them both if they are both profitable. That way you can get the volume from X and the ROI from Y. which still = More $$ in your pocket at the end of the day. Assuming you have the capital to run both. :)
 
edit above post ^^^: HAH, I didnt realize they were the same offer until just now. It is obvious your split test just wasn't an equal split. (this happens often because google/yahoo/msn have some lag time in updates) you probably got 2/3 traffic going to X and 1/3 going to Y. No big deal, give it another day of testing to get some statistically relevant data with an even split. My hypothesis is that Y will be the clear winner :)
 
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