All about Media Buying Part 2 – Traffic Monetization

All about Media Buying  Part 2 – Traffic Monetization

Media Buy

Written by

Papa Whale


May 7, 2014


Media Buy

Last week, we shed insight on the basics of media buying. Now that you know what kind of traffic you can buy and where to buy it, it’s time to get started!

But which offers to promote?  The art of media buying is not something that’s assessed by a panel of hasbeens on a cheesy talent show you’d find on tv. Instead, It’s measured by the ability to make cold, hard cash. Indeed, some of the media buyer’s most useful skills are his talent to find profitable offers and - of course - being able to master the important concepts and metrics that make media buying and traffic monetization what it is.  You haven’t fully grasped a concept until you can explain it well to others.  That is our goal here.

Find your provider

Let’s start at the beginning.

In the same way that the media buyer doesn’t generate traffic on his own, it should be noted that he doesn’t create content either.  It’s never been more important to find great products to market to your traffic.

If you don’t know how to find the right offers for your traffic, start off by scouring the web in search of the latest trends.  Try spotting what lander concept is hot right now, figure out why it’s hot, and figure out the product behind it.

Ever heard the phrase, “you can catch more flies with honey than with vinegar”?  Well, you can certainly apply this phrase to media buying and traffic monetization as a whole.  You’ll attract more leads (maybe even whales) with the sweetest, top-converting offers.  Once you’ve found the most suitable offer, get in touch with the provider and check to see if you can become an affiliate.

Depending on the provider, you might as well be hitting a brick wall!  If you’ve yet to reach “big shot” status, you risk the provider looking down on you and offering you the lowest possible payout.  In cases like this, remember that you’re better off choosing a CPA network because the network itself can provide you with a large range of products at a good payout. Here are a few tips that will help you make your decision.

In any case, you'll need a clear understanding of the fundamental concepts and metrics behind any successful online ad campaign. Fortunately, you can skip a few classes by taking another look at the rudiments of this particular language right here.

Speaking Media Buy

The Media Buyer's language revolves around two things: efficiency metrics and profit. And, since time is money, don’t expect the media buyer to express himself with long and elaborate words.

Indeed, the jargon of a media buyer hardly ever exceeds 4 letter words: CTR, CPM, EPC, etc. That's not surprising since if you want to land profitable campaigns by buying ad space and monetizing it, you need to start feeding from your data.

The quicker you catch on to these acronyms, the faster you’ll earn money!

Here’s a breakdown of the main ones.

Incomes - Coming down the pipe, right to your pockets

We’ve already said it, but the media buyer’s main focus is PROFIT. These money-making pros have such a great grasp of the jargon that the following terms and acronyms are always rolling off their tongue:

PPS: It means Pay Per Sale. When you promote PPS offers, you usually earn more money for each individual sale, but they usually have a lower conversion rate than PPL offers, as they typically require the usage of a credit card. These offers are among the best ones for highly qualified traffic.

PPL: A Pay Per Lead offer is an offer where you get paid each time a user makes a defined action. For example, you can get paid each time a user signs up for free or fills out a form.

A reason why PPL offers allow you to earn money faster, especially when compared to PPS.  However, PPL typically pays less for each action. Furthermore, these offers usually have their CPA closely monitored by the provider because they are easily hacked with false traffic.

Remember, PPL is a calculated risk arrangement for a sponsor. It’s closely related to aspects of CPA that we’ll examine below. We’ll make it short and sweet by telling you that the “free” to “paid” ratio matters.  If the free leads you’re getting paid good money for aren’t converting on the sponsor's end (to paid members), well, enjoy the PPL opportunity while it lasts.

Let’s explore the other methods of earning:

PPC: Pay Per Click or EPC - Earning Per Click means that you get paid each time a user clicks on the ad or the sponsored link. It’s by far the fastest way to earn money! However, the amount you earn per click is among the lowest gains you’ll probably see in this market.

RS:   Revshare (RS) means that you get a percentage of what your user spends. This never expires and the user is referred by you forever. Here’s a reminder of how profitable these offers can become.

Money per conversion

CPM vs. CPC vs. Bid vs. Flat, what should I choose as part of my Media Buying?

Last week, we talked about getting traffic. Unfortunately, traffic usually comes with a bill, especially in the media-buying world. So, you best get used to the following terms if you want to negotiate this bill downwards!

CPM: It’s the Cost Per thousand (Mile) impressions. In other words, it’s the price that you pay each time your ad has been seen 1 000 times.

CPC: This is an acronym for Cost Per Click. It’s traffic where you pay for every user who clicks on your ad.

Bid:  This is the Bid price.  Media buyers and advertisers alike, determine the maximum amount that they are willing to pay for certain traffic.  This may result in trickier calculation methods, and if you're far off in your estimates, you could lose a lot of money this way.

Flat:  Flat rate buys are typically reserved for the biggest media buyers out there. It consists of a fixed monthly cost for a large volume of traffic (or for a good ad spot). But remember, you need to pay the right price, and that requires a very accurate evaluation, usually done by testing the spot for a few days BEFORE signing on for a month.  Don’t get caught up in overpaying for a spot that just doesn't deliver on the results.

Payoff - Key Performance Indicators for Measuring Media Buying Success

Once you’ve earned and spent some money, it’s time to put things in perspective and calculate your campaign's return on investment (ROI).

Here’s how we achieve this:

CTR: The Click-Through Rate, uttered in percentage, refers to the number of clicks related to the number of impressions. For example, let’s say that 2 people clicked on your banners out of 100 impressions. This means that this banner has a CTR of 2%. The key is to always broadcast the highest CTR banners to get more traffic and, eventually, more conversions.

eCPM: It’s the Effective Cost Per thousand (Mile) impressions, but it’s used to determine your earnings per thousand impressions. First, you need to divide your earnings by your number of impressions. Then, you multiply this number by 1000 to bring it back to your CPM. This is very useful for your final profit or loss calculation, and we’re gonna show you how to do this in next week’s post.

EPC: This term is way easier to comprehend than the previous one. The Earnings Per Click is your earnings divided by the number of clicks your ad received.

CPA:  Cost Per Action is also referred to as Cost Per Acquisition -- As you might have guessed, this is the backbone of the CPA-based advertising model, where the advertiser determines how much is worth every conversion made. In this case, a conversion can be a click, a lead, a sale, and so on…

For example, let’s say that your ad was clicked 500 times and that you were paid $1 for each click (Don’t get too excited, this example isn’t too realistic in real life).

In this example, the provider is reporting that you made $500 in new revenues. The CPA is calculated by dividing this number by the number of conversions (“sales” for example) generated.

ROI: The Return On Investment is essentially the money you earned minus the money you’ve spent. In other words, your gross profit.

There ya go! You’re all set at mastering the terminology!

You're now ready for Part 3 - Calculation.

Until then, be sure to practice the Media Buyer's lingo in your everyday life, because if you haven't already, you will one day be using these terms on a daily basis!

Continue to Part 3 - Profit Calculation

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