I cannot tell you how many times I have heard somebody jumping the gun on a campaign due to the lack of statistical data.
In dictionary terms, a result is called statistically significant if it is unlikely to have occurred by chance. This means that you have a significant amount of data backing up whatever it is you are trying to prove. In this case, it is that your conversions (or sales) are not random.
Don’t let the lack of data cause you to lose money or prevent you from making money.
Statistical Analysis is Vitally Important
When I started Internet marketing, I had no idea about tracking or how to do it properly. At the beginning, I was literally just using one link for every keyword/ad that I had and hoping it made me money. VERY RARELY did that ever result in a profitable campaign for me (go figure). However, after learning that I was being an idiot, I decided to use network based subIDs to track specific ads and keywords, and finally moved on to use Prosper 202 to track everything.
The point is, without knowing what is making you money, it’s very difficult to scale your profits and cut your losses. Being able to see the exact number of clicks and whether or not those clicks converted is extremely helpful when starting and scaling a campaign.
There are a number of specific instances I would like to point out to you, and hopefully you avoid these mistakes as much as possible.
The 4 Mistakes of Disregarding Statistical Significance
There are probably more, but I have been a victim of these mistakes in the past, and there’s a good chance that you have been at one point, or still make them today.
1. 5 Clicks and 2 Leads = Balling Out of Control
WRONG! Of course 40% conversions are great, but what kind of data is that? I have had so many campaigns that start out with 2 or 3 conversions on 5-10 clicks. Obviously at that point I am hopeful, but many times they turn out to be losers. Do not think you struck gold if you are lucky enough to be 2 for 5 when you launch a campaign. If it stays consistent at those numbers, then you can dance, but please don’t prematurely evaluate.
2. 40% Conversions on 5 Clicks = Scale, Scale, Scale!
WRONG! Again, don’t dump everything you have into a campaign like that just because it is converting hot for the first few clicks. Let it continue running and see what happens. I remember awhile ago when I had the mindset that I found the best campaign ever because I had 3 conversions on 4 clicks. I opened my budget and spent ~$100 in a matter of minutes. Low and behold, not one of those clicks converted so I was left with 3 conversions, and lost some money.
3. Campaign Lost a Few Dollars – Let’s Pause it!
Not yet! Let it gather some data. Obviously like the instance above, you don’t want to let your campaigns bleed like your name is BP, but you want to let it gather some data. If you have spent 2x the offer payout without promise of profitability, I would suggest to pause the campaign and analyze what’s going on. If there’s nothing left to do, dump it and move on.
4. Ads with Very High CTR but Not Profitable – Let Them Run!
No. Just because you are used to spending $0.40/click on the demographic and you have an ad that has a great click-through-rate and you are spending $0.20/click, if it’s not profitable, don’t let it run. Obviously this is very demoralizing because of the profit you could have if the ad would actually convert, but just rebuild similar ads. Try to merge a converting ad and the ad with a high CTR and see where that gets you. Don’t just throw money away in hopes of making profit. Build your campaigns intelligently and not emotionally.
I know I have made these mistakes on multiple occasions in the past, and I still struggle with scaling too fast. After all, you don’t want to leave money on the table, right? Manage your campaigns closely when you are launching them and you should have very few problems if you avoid these mistakes.
I’m working on building some additional case studies to post here and in my newsletter. If there’s something in particular you would like to see analyzed, let me know and I’ll see what I can do.
“Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don’t quit.” – Conrad Hilton