WebDiggin.com: An Adventure to Make Money Online

Editor’s Note: Oops! The Amount of Money Made Based on the Click Date for Dec 2007 should be $193.06, not $186.52, meaning that the increase of $6.54 would result in December showing a profit of $2.65 instead of a loss of -$3.89.

In December 2007, we (finally) got one of our Search Marketing Campaigns to be profitable. We tried to scale it up by increasing the operating budget, but unfortunately that didn’t lead to any new clicks. December wasn’t as good as it should have been because we weren’t keeping a careful eye on the campaign. (The retailer changed the landing page offering a great in-store promotion. It probably didn’t help online sales from affiliate marketers like us.)

Let’s look at how our favourite search marketing campaign is doing since the start of the new year. (January’s figures are complete up until Jan 19, 2008). There are of course, three dates that you could consider when examining to see if your affiliate marketing campaign is effective: the click date (when the visitor clicks on your ad and first lands on your merchant’s site), the event date (when the makes the purchase and closes the sale), and the posting date (when the event is listed in the reporting functions of your commission network.) We find with Commission Junction that there isn’t a significant difference between the event date and the posting date, so for the purposes of analysis, we are ignoring the posting date and only comparing between the click date (table 1) and the event date (table 2).

Table 1. Analyzing Performance of Campaign using the Click Date (the date that the visitor clicked on the ad and first visited the merchant site)

Table 2. Analyzing Performance of Campaign using the Event Date (the date that the visitor made the purchase)

Since the start of the campaign in December, I’ve spent $258.23 on advertising and recovered $242.97 in commissions. The difference between the two tables is $26.21 of commission made from visitors who clicked on ads in December but didn’t purchase until January.

Examining Performance Maintenance Using Click Date (Table 1)

If we look at Table 1 which compares my cashflow based on when the visitor clicked on the ad (which is when I get charged by Google and Yahoo), the December campaign ran at a slight loss (-$3.89) and January is currently running at a larger loss (-$11.37). However I made $186.52 worth of commission (5%) through moving over $2000 of merchandise which means that I move up to the next tier of commission (6%). In essence, I will be receiving a 20% bonus on my December commission ($186.52) which means an additional $37.30 thrown my way. So December should be a profit of $33.41.

January currently shows a loss of $11.37. However, not all of the commissions have rolled in yet. If we make over $100 of commissions, we’ll reach the next commission tier, and make an extra 20% on the commissions.

Examining Performance Maintenance Using Event Date (Table 2)

If we look at Table 2 which compares my cashflow based on when the visitor decided to buy (event date), we see that December shows a loss of $30.11. With $160.30 of commissions, we’ve reached the second commission tier and should receive a bonus of $32.06, so December should become a minor profit of $1.95. January 2008 is currently profitable with $15.26.

Bottom Line: Shoot to reach the next commission tier - it may turn an unprofitable campaign into a profitable campaign. Also, you may not know how profitable a campaign is until the referral period (the number of days after a visitor clicks on your link that the merchant will still award you with a commission) is over. But, I still stand by the bottom line of my earlier post:

If your sponsored search campaign isn’t producing immediate results in the first few days, turn off the campaign or tweak the campaign. (Three quarters of your sales will be made and reported within 24 hours after your visitor clicks on your ad.)

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