How Hydra Screwed Me Out Of $25,000

Nope, I never run CPM on Google, I know some people make it work but I always find I end up with considerably less ROI on a CPM basis with Google. Now Media buying, that's a different kettle of fish.

The key is always the quality score. You can get bids at 1 cent per click if you have a great QS and no competition.

This screen shot is from yesterday ,shows basically a very similar campaign from search and content, I always set them up seperately, only difference is I make the content adverts a little more "in your face".

Paid 5 cents for search and 4 cents each on average for content.

My landing page is pretty crappy , I slung it up in 2 minutes to capitlise on something I knew would only be a buzz for a day or so.

Because the landing page has no real Google credibility I got a "good" QS, if I could get a "great" I could probably get search down to 0.03 per click and content down to 0.02 or less.

I got about 1000 targeted clicks for $38 bucks .

See attached

I'll give you one possible scenario to illustrate:

Remember that the CPA commission is based on the advertiser's estimate of how much he can afford to pay to acquire a lead. (Older advertisers would have more concrete data, but for newer advertisers this would be more of an estimate.) Basic marketing arithmetic.

Now, it's common for marketers to be over-optimistic about their conversion rates and retention rates and hence over-estimate their value-per-lead. Especially when there is a huge temptation to offer higher CPA commissions, in order to attract more affiliates.

Say this advertiser calculated his value-per-lead based on the assumption that the average customer stays on their program for 3-4 months. But after the first 2 months, he realizes that the average customer only stays on the program for 2 months.

Now he has overestimated his value-per-lead, and has negative ROI. NOT because of poor quality leads - but simply because he was over-optimistic with his marketing arithmetic, and over-estimated how much he could afford to pay in commissions for each lead. (This is what often happens with CPA, where commissions are paid before the sale is made.)

In this case, it does take a couple of billing cycles to find out how long the average customer stays on the program. Regardless of how much volume you get, you have to wait a few months to find out how many months the average customer stays on your program.

In particular, different lead sources will have different values-per-lead. So for a new affiliate who just started promoting the offer a few weeks ago, it can take several billing cycles to determine his value-per-lead (regardless of volume).

Again, I'm not saying this is what happened here, but it's a very plausible scenario.

I'd also like to point out that IF this was simply a case of an affiliate sending crappy leads, then the leads simply wouldn't convert and the advertiser would discover the problem within the first billing cycle.

The fact that the advertiser took 7 weeks to discover the problem, is an indication that the leads DID convert (so the leads were at least decent), but the problem was probably with retention (i.e. the leads converted to sales, but didn't stay on the program long enough for a positive ROI).

Who is to blame for the retention rate? It's not necessarily the affiliate. So as long as it's not crappy leads (that don't convert), and the affiliate was promoting the program using above-board and allowed methods, then the advertiser ought to pay the affiliate for the leads that were already sent. The advertiser can choose not to accept any further leads from the particular affiliate, but they should pay the affiliate for the leads already sent, according to the affiliate agreement.

Which, in the grand scheme of things, means nothing. It's a big world out there. I imagine there's a lot going on that you don't know about personally.