“If you invest $1 in Facebook ADS and earn $2, then you invest $10 and make $20, invest $100 and make $200, $1.000 to make $2.000…$1.000.000…the possibilities are endless!”
Anyone who thinks this is how scaling works has no idea about affiliate marketing!
What is scaling?
Scaling indicates that practice of “climbing” on an offer, or generating multiple actions, achieving surprising results.
Generally when we talk about scaling in affiliate marketing we often mean this practice: taking an offer from an affiliate network, driving paid traffic with a campaign on Facebook Ads, measuring the ROI, if this generates profit then I invest more money in traffic to earn more.
In practice, arbitrage is done with an offer, aiming to follow steps that, like a ladder, start from the bottom and then climbs upwards.
What you need to know about scaling
If I find an offer that generates a good ROI, if I have cash flow, the ability to generate actions (without CAP = “capping” or budget limit) and speed in payments, I can address this issue.
However, not all offers are for scaling, some are saturated (there has already been someone else who has scaled) some have limited budgets, others are excellent but have very long times for validating actions and payments (for example 30 days for validation and 90 days for payments, I will have everything I generated in January in my current account in May / June!) in this case, to do scaling it is necessary to have sufficient funds for at least 150 days of promotion. And last but not least, ROI. If I have 50% gross ROI with a budget under $100, it is not worthwhile, in my opinion, to scale.
Let’s see why
Let’s assume we find ourselves in this situation: PPL SOI $2 offer, GEO, accepts Facebook traffic, validates 15 days + 30 days for payment. ROI 60%. Cancellation rate 10%
I spend $10 to generate 8 leads = $16, gross earnings $6.
$6 – $0.6 (cancellation rate) = $5.4
I promote for 45 days at $10 / day, I spend $450 and generate 360 leads = $720 gross – $72 (cancellations) = $648 -$450 (of expenditure) = $198 for 45 days of work!
ATTENTION: I considered an average ROI, no hitches, no drops, no breakdowns of @@ (believe me this condition for 45 days of the promo is a rarity).
Those who work with affiliations know 2 things well, when you undertake a scaling action (which does not only mean increasing your budget) you are faced with:
- Decrease in ROI.
- Increased cancellation rate.
So to add a zero to the profit of the 45 days of promotion it is not enough to add a zero everywhere.
I spend $4500 to generate $7200 (-720) = 6480 -4500 = $1980 (NO!)
At best, the only certain figure is only $4500 of expenditure!
Example that comes close to reality:
I spend $4500, I generate $6500 (-20% cancellation rate, or $1300) = $5200 -$4500 = $700 of profit for 45 days of work. Always do the math without any hitch, no drop, no break of @@ (I rewrite to reinforce this concept: believe me this condition for 45 days of the promo very rare!)
Favorable condition: ROI of at least 100%, speed of payments and no CAPs.
What are the conditions that can interrupt the scaling action?
- The advertiser has achieved the goal.
- Poor quality of results.
- Tracking / Server Errors.
- Problems with the advertising account (lack of funds, violation of some rules, reports, misleading messages, etc.)
- Lack of cash flow.
- Saturation that pours into a decrease in CR, consequently decrease in ROI, increase in cancellation rate.
How to do scaling?
The most obvious answer is: “Duplicate the campaign and put the budget you want to spend!” But I think this is not enough.
It is also necessary to find other audiences, using different angles and also go to other promotional channels, obviously separating the tracking data, but above all by setting a strategy.
Each offer requires a strategy that must be refined over time and optimized.
Generally every scaling action has its limits, which can be imposed by Advertiser, Network or Affiliate.
Let us remember that the affiliate is the one who anticipates money and work and that the cancellation rate could be zero or 30-40-50% and compromise the work done.
I’ll tell you a performance story:
Last year I witnessed the confrontation between 2 well-known affiliates promoting the same offer that I was running too, but on different networks, the first one generated 60k in one month and the other one 13k in the same month with a difference:
The first one had spent 25k to generate 60k but in the end he had a 50% cut so he gained 30k (or 5k profit).
The second one had spent 5k to make 13k with a cut of 8% with a profit of $6,960. Absurdly, it went better for the second guy ☺.
The practice of scaling must be done with intelligence and always measuring your strength, it is not just about finding a good offer and pouring money on the promotion!