Whenever selecting an offers — there is always one parameter that any affiliate marketer spends a lot of time drooling over. It is the size of the offer payout.
“This offer payout is $50 per conversion. Just a handful of sales each day would be good enough for me.”
“This offer payout is only $0.40 per conversion. It may take forever to make money from this offer.”
If you’re an experienced affiliate marketer, you already know that payout offer is usually a criteria that makes little difference on how profitable an ad campaign could be. If you’re just starting out, hopefully this article would help you establish some facts and do better offer selection.
Larger Payout Means Higher Campaign Cost
If an offer payout is higher, it is safe to presume that the conversion costs would be higher because of competition from other affiliates or the conversion ratio would be smaller. You’ll make more per conversion but you’ll also spend more per conversion. So, basically you need deeper pockets if you’re going after higher payout offers.
For example, when doing native ads, it is common to find offers, which pay you say $40 per offer but your campaigns will need a budget of $100 per day or higher and you’ll not start making money from the get-go (if you think you’re that guy, you may be better off buying lottery tickets). You’ll typically lose money for 2-3 weeks and optimization efforts will lead you to making consistent profits at the an additional 2-3 weeks. Affiliate networks usually do a Net30, so you’ll be paid at the end of 30 days. Considering all this, you need a budget of about $5k-$6k just to get started.
Smaller Payout Means Lower Campaign Cost
A smaller payout does not necessarily mean lesser competition. But smaller payout does usually mean higher conversion ratio. You may not make big bucks per conversion, but at the end with higher conversion ratio, you’ll be able to make good amount of money. You’ll be spending much lesser per campaign per day and hence, smaller payout offers are good to get started.
For example, when doing mobile ads, it is common to find offers, which pay you say $0.40 per offer and you’ll beed a budget of say $10 per day. If you go by the above example wherein you lose money for 2-3 weeks and then start making consistent profits at the an additional 2-3 weeks. In such a case, you just need a budget of $500-$600 to get started.
If Smaller Payout Offers are Easier, Why Do Higher Payout Offers Ever?
Higher payout oﬀers have advantages too – the biggest one being easier scalability. If you want to earn 5 or 6 figures per day, it is just not possible with smaller payout offers because you’ll need to run thousands of smaller payout offer campaigns to reach those figures.
It is best to start with low payout offers and get experience as well as statistics. As you gain experience and statistical knowledge, you should graduate to higher higher payout offers.