This may seem like common sense, but this is the type of post I would have loved to read when I was starting out. Of course statistical significance is important, but you can make intelligent decisions on small amounts of data, just make sure you are cautious.
While more data is always good, it is definitely possible to build a profitable campaign on a limited budget. Here’s how you can do it.
I’m not going to throw a bunch of calculations at you (you can find those anywhere if you want). I’m going to tell you exactly how you can start a campaign on a limited budget. This is not limited to any specific traffic source either. I have used this effectively on just about every traffic source.
With a limited budget, it’s all about reducing the risk and/or impact of losses. Also, don’t be discouraged and feel like you are useless because you don’t have the ability to spend $10,000+ per day yet. Remember, everybody started there. It truly is the hard work and dedication that will take you to the next level. Anyways, here are some general guidelines to building a campaign when you have a limited budget.
- Keep your campaigns small – If you only want to spend $20/day on advertising to start, it might be advisable to only test 2-4 ads at a time.
- Keep your demographics tight – This pertains mainly to Facebook, MySpace, or any traffic source where you can select who will see your ad. Keep it tight and expand later for growth. Remember, you are trying to find the highest margins possible at this point.
- Use targeted keyword lists – If you are using a keyword-based traffic source, build a tight, strong list first. Then work to expand. (This is the exact strategy from point #2 from my six-figure month post).
- Keep your tests controlled – While it is definitely recommended to split test everything, take more time designing your campaigns/ads to increase CTR and improve your chances for success.
Using those guidelines, you should now have a small, targeted, and potentially successful campaign set up. Depending on your traffic source, you may need to let your campaign gather data for a number of days. However, if you run your campaign during prime hours and it is losing money, I would strongly suggest not letting it bleed for too long, especially on a limited budget.
From this point, there are three outcomes.
(1) Losing money, (2) breaking even, or (3) making money.
Let me give you my blueprint for how I tackle campaigns that fall into each category after testing it.
1. Losing Money
This happens! It’s almost like baseball – hitters are considered highly successful in baseball if they FAIL 7 out of 10 times. Crazy? The goal is to reduce losses during ‘failed’ campaigns, and the winners will carry you. Build up enough ‘winners’ and you will be on your way to filling your pockets with money.
Here are some suggestions if your campaign is still losing money after preliminary testing:
- Stop and think – There is some reason why another marketer is making money on the exact same offer on the exact same traffic source and you aren’t. Don’t copy their ideas, but build on them. How can you make it better?
- Continue split testing – Analyze what you have done so far and make changes. Test everything. For instance, changing the color of the headline on a landing page can turn a losing campaign into a winner.
- Research your niche – This includes your target market. If you are marketing a higher-class dating offer, don’t have pictures of nearly topless women. The offer probably won’t convert well for you, and the advertiser probably won’t have great traffic quality. This means even if you do morph this into a profitable campaign, you will eventually be kicked off by the advertiser.
- Drastic changes – You may be going about your campaign the wrong way. If you have been positive towards the user, try presenting something negative. Instead of: “You can lose weight!” Try: “You won’t lose weight”. There are real people clicking on your ads; get into their minds.
Normally after thinking about why your campaign is losing money, intelligently split testing new ideas, and further understanding your niche and market, you should be able to make a profitable campaign. Again, if you just cannot figure it out, dump it and move on. Don’t break your bank struggling with one campaign.
2. Breaking Even
With a little work, you should be able to turn a break-even campaign into a winner. Here are a few things I have done personally to drastically increase the margins on a campaign.
Consider what I said in the ‘Losing Money’ section, and also try:
- Change the bids – On some campaigns, dropping the bid by $0.05 can be the difference. On the other hand, I have changed bids on some PPC campaigns from $0.70 to $1.00 and it performed better.
- Small changes – What you have is doing pretty well. Make slight changes to your ads or landing pages and see how these changes affect your profitability.
Again, using all 6 tips listed (everything above), you should be able to find something profitable at this point.
3. Making Money
What a wonderful feeling. Starting a campaign and it is making you money. There are really only a few things you should be doing after you find something that is making you money. Here is what I do.
- Scale – Pour as much as you can into a profitable campaign. Use these profits to find your next winning campaign!
- Continue testing – Don’t settle just because you are making profit now. Continue testing and increase those 50% profit margins to 100%+ by testing every element you can think of. Build on what you have and continue growing.
- Expand – Diversify your assets and continue building profitable campaigns. Try new traffic sources, try new offers, try new things! Your next campaign might just be your best performer yet.
- Enjoy it – You have worked hard (probably) building a profitable campaign. Take some time and actually enjoy your success. Possibly reward yourself with something nice. Don’t go overboard though, or you won’t have profits for your next campaign!
I find the most difficult aspect to be relaxing, honestly. If you couldn’t tell, once I find something that is working, I keep working to grow. I think I am addicted to profit or something.
The Next Step
I’ve told you what I have spent thousands and thousands of dollars on testing. Granted you may have or find a method that works better for you. That’s perfectly fine! Use this as a starting point. I am just trying to get you thinking about building campaigns, and then actually building them! You won’t make any money researching methods all day, it’s putting those methods into action that will show results.
After reading this post, I have a challenge for you. Whether you are on a limited budget or not, go test something. Try a campaign you have been working on or attempt a completely new niche or offer. Build something and test it.
Hard work pays off.