To succeed in affiliate marketing you must have the proper mix of offers, this will enable you to test your campaigns before you even run them. And to optimize your ads when you begin to pay for them. 

In my last post, I discussed the proper mix of offers you need to make as an affiliate marketer – they can’t all be high-ticket offers.

To recap you need:

  • An acquisition offer
  • Upsell / cross-sell 
  • Main offer
  • Premium offer

When you have each of these offers, and you can outline the entire funnel you are sending traffic to, you can determine whether or not your funnel CAN be successful before you spend a dollar on a single ad.

You do this by calculating the money you can reasonably expect to make based on decent (yet conservative) Conversion Rates (CR) for each step of your funnel. 

Here are a couple examples 

This isn’t to say a successful funnel can’t have a free offer at the start of it. It’s just an example of how to calculate the possible profitability of our funnel before you start. 

As an affiliate, this means you should know, not just the cost of the products, but the commissions you make from each sale at each stage of the funnel. 

When you have a successful funnel and you’ve gone through the process of testing the different stages of the funnel to maximize your conversion rates, you can play with these numbers. But we should take the time to figure out if the funnel can work before we start.

So how do you test your ads once you’ve decided to run them?

Don’t just run one ad. Run a variety of ads. Here’s an example of how you can organize an ad campaign.

The campaign is the product you are selling.

Each ad group has a different target audience. Don’t mix a bunch of audiences, otherwise when you get sales you won’t know which audience is actually doing the buying. If you split them up to begin with you can tell which group is the most profitable. 

Then run a set of ads to each ad group. This doesn’t mean a different set of ads to each group, but the same set of ads to each group, otherwise you won’t know if it’s the ads for one group that are more successful, or it’s the target audience. 

You should be paying attention to your Click Through Rate (CTR) for your ads – are people even clicking on the ad? If so, this means you’re getting people’s attention. Even 2% is decent. 

And pay attention to the CTR to the link connected to your ad – this means people aren’t just looking at your ad, they’re actually then clicking on the link and visiting your landing page. 1% is okay. 

If your CTR to your ad is really high, but the CTR to your link is low, then you’re getting people’s attention, but you’re not getting the right people’s attention. The people who are being attracted to your ad aren’t following through because they aren’t interested in the product. 

So you are getting impressions, clicks, and maybe even sales, how do you know when to give up on an ad?

This isn’t an absolute rule but is a general rule. 

If you’ve got more than 10,000 impressions – any less than that and you don’t have enough data – and the amount of money you’ve had to pay in advertising to get sales (CPA) is 3 times more than what you expect it to be, then shut it down. 

When I say 3 times more than you expect it to be, that’s the number you need it to be in order for you to be profitable.

So we’re going back to the initial calculation – can your funnel be profitable. That expected, or needed, number is the number you’ve figured out your CPA needs to be, otherwise you won’t make money no matter how many sales you make. 

If an ad gets to 3X the needed CPA it’s safe to say it’s never going to be profitable.

To be clear, even if it doesn’t get to 3X, that doesn’t mean running it indefinitely. The goal is to get every new customer at zero net spend. That means you make at least as much in sales as you spend on cold traffic to acquire each new customer.

A truly successful ad will only have 1X in ad spend per CPA. 

At the very least, as an affiliate we should be able to find out what the Average Sale Price (ASP) is for the funnel we’re promoting.

When we get someone to that funnel and they do say yes to the acquisition offer, some of those people will also say yes to the upsells and the cross-sells We want to know what the average sale price is, not just the price of the acquisition offer.

Now this isn’t even how much we make in commissions, but at least it gives us a Cost Per Acquisition to shoot for. If we’re paying for ads and we can’t get our ad spend below the amount of money we make in commissions we’re not going to make any money. So if we know the ASP of the funnel we’re promoting, the first thing we can shoot for is to get our CPA at or below that ASP

Sounds pretty straightforward and easy, right? Unfortunately no. But at least this gives us an idea of what we need to accomplish.

When we’ve cooked up a mix of affiliate products to promote we can use this method to determine if we can make a paid marketing campaign work before we even start.

If the numbers don’t add up, even the best marketer can’t make it work. No matter how good you think you are don’t assume you’re going to get better conversion rates than other good marketers. 

And if I haven’t made it clear, this also demonstrates why you don’t start by promoting high-ticket offers with paid ads. High-ticket offers will have high CPAs, no matter how good the marketing is. Therefore you can’t even properly test your ads without spending large sums of money. 

I’ve spent way more money on Facebook advertising than I care to even think about.

My failures are what drove me to research this stuff and learn about what I need to be doing. I haven’t figured it all out. But I’ve learned from experts you have made paid advertising work – they’ve told me this is what needs to be done. Now I actually have a method, and measurable goals to guide me.

This helps keep me on the right path, and has helped me not waste a whole lot more money on ads that aren’t working, and can’t work to begin with.

One thing I’ve learned, and what I’ve started to focus on (like writing this blog), is that I need to get more free traffic. If I’m going to be successful as an affiliate marketer it’s probably not going to come all through paid marketing. And even when I’m doing paid marketing I need to maximize it by capturing the attention of those leads so that I can follow up with them and build an audience that I can more readily reach with free marketing (like email).

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13 responses to “A Measurable Guide for Testing and Optimizing Paid Ads”

  1. Hi Nathan,

    Thank you for providing this awesome guide on testing and optimizing paid ads in affiliate marketing.

    I appreciate the intricate process of dissecting and refining ad campaigns to maximize profitability.

    Your emphasis on the importance of having the right mix of offers before launching campaigns underscores the need for planning each stage of the funnel to ensure viability and success.

    All of these points are new for me and I feel that your knowledge is a helpful partner on the journey.

    Thank you so much.

  2. Thanks Nathan! Informative and insightful. It is good to be reminded of the measurable and the importance to stay on track.


  3. Thanks Nathan, that certainly was a lot of information to digest. I have bookmarked your post so when I go to create a campaign I can use your information and make an educated decision.

  4. Hello Nathan,

    Your post is great, but I’m not sure where to start. It seems so confusing. Some people say you have to pay for traffic, while others say you need to grow your audience for free traffic. Then there are those who say you need to know your numbers. It can be overwhelming and I end up thinking that the whole process is a skill that takes time to develop. Patience and focus are crucial in this process.

    Thank you for sharing such good material to consider. I wish you all the best in your journey.

    1. I’d say what I’ve learned is, the safest way to start is with organic traffic – and build your audience. Online paid marketing is not easy, and you’ll need money to test and learn what you’re doing.

  5. Hi Nathan,
    I must admit to being slightly overwhelmed with all that information. I’ve definitely got a lot more to learn. I’m thinking I’ll come back to this post in a few months after I have a bit more experience under my belt.

    1. I hope I at least communicated the message – don’t start affiliate marketing by promoting high ticket offers with paid advertising.

  6. Nathan,

    “Your blog provides invaluable insights into affiliate marketing, stressing the importance of testing offers and optimizing ads pre-investment. You emphasize understanding metrics, setting measurable goals, and diversifying traffic sources for sustainable success. Your personal journey adds authenticity, making your advice actionable and empowering for readers.”

    I very much appreciate leaning about ad testing.

  7. Hi Nathan!
    I found your post to be very interesting and informative. Currently, I have only focused on organic traffic. Your writing definitely brings a “food for thought” for future planning ideas.
    All the best!
    Milissa Neirotti

  8. Nathan, wow. That was quite the post so much information to take on. I’m going to probably read this a few times to get my head around it. But what’s clear is how much I still need to learn. Paid ads are not something I’ve really got experience of. I’m currently using organic traffic methods with TikTok and this week it’s really picked up. Although I do need to learn for the future to amplify my audience so thank you for this information. Thanks, Atif

    1. One thing I realized when writing this was, oh I need to do this stuff better than what I’ve been doing it. I’ve learned it, but I still haven’t put it all into practice as I could

  9. Nathan, this is a well put together post. It’s absolutely filled with so much information.. like Seth just said, “my brain is gone!” I have bookmarked your post because I have a feeling I’m going to need to read and reread this many times over to comprehend this fully. Thank you for providing some excellent food for thought!

  10. Good post, thank you.
    Advertising we must understand that our campaign never will be profitable right from the start. Hence you go through the discovery process, to find keywords that trigger the clicks. Knowing what works we can fine-tune it and eventually scale up.

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