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Based on your knowledge of past topics, you already understand how to choose an affiliate program and what criteria you should pay attention to. In this topic, we will discuss one of the important aspects: the choice of offers and their role in arbitrage.
An offer in arbitrage is a product or service promoting which the arbitrageur receives payment for confirmed leads.
Selecting an offer is not just a step, but a key moment when working with an AP. You can choose many offers and pour traffic on them, but if these offers do not get approval or there is a high percentage of trash, you can lose your advertising budget.
In the arbitration sphere, there is such a concept as “pouring onto a dumpling shop” (and this is exactly this case!). Therefore, it is important not to just select at random but to carefully choose an offer, taking into account our recommendations and the advice of your personal affiliate manager.
At the same time, you must understand that you can register in a large number of APs, do analytics on the spy service and FB advertising library, take customized offer from the manager, and still end up in the red.
All this means that there is no ideal offer, and there is no specific algorithm to search for it. The specifics of arbitration work are constant tests and hypotheses. And thanks to the tests, arbitrageurs can find a bundle that gives them the most profit.
The concept of a good offer
As we already wrote in the introductory part, an offer is a proposal from advertisers that is promoted by arbitrageurs (Buyers, Webmasters). These offers can include absolutely everything, from products with a wow effect to potency products, and we’ll focus on the latter.
The most important thing is not to think about whether these goods are bought on the Internet and who needs them. You have to understand that if there are large arbitration teams and media buying agencies, there is a demand for each product. There is only a question of the cost of the lead and how profitable it is.
If we sell products from AP, then in addition to the lead price, two indicators are important to us: approval and trash.
Approval is the process of confirming a request from the AP. In simple words, when, thanks to your ad, a person sends a request for a product, and when contacted by the AP, a person agrees to the purchase and delivery conditions of this product, this request receives approval, and you are paid according to the offer. Accordingly, the lower the approval rate, the lower the percentage of payments you receive from the offer.
Trash is an invalid request (duplicate, incorrect data, unanswered call).
There is also such a thing as “Rejection”. This is when a person listens to the CC offer over the phone and refused to purchase.
But it’s not always worth focusing on approval readings in offer statistics. It happens that there is little data, and approval rates can be low or, on the contrary, high (or even 0). It happens that an offer is brand new or there are no public statistics on it. Therefore, be sure to check with your personal manager.
Up-to-date information on approval and trash should be requested from the manager.
Still basically, the main indicators of a good offer in arbitrage are metrics with a high percentage of approval and a small percentage of trash.
Thanks to this, we will be able to drive traffic at a higher price and still be in the black. Keeping the price low will also increase our ROI.
ROI is the profitability ratio, or return on investment. It is calculated as a percentage.
ROI calculation formula:
For example:
We received 10 leads from our advertising:
4 leads – approval
3 leads – rejected
3 leads – trash 🗑
Offer payout – $30
4 leads x $30 (offer payout) = $120 (this is our income)
But at the same time, we spent $90 on advertising (Facebook traffic) and consumables (antidetect, proxy, account, etc.)
Let’s calculate ROI
120-90/90x100%= 33%
33% is a fairly low ROI, but it is already positive, which means you can continue to try working with this offer.
You can always calculate your potential ROI on our website using our ROI calculator.
How to calculate the maximum cost of a lead
The maximum cost per lead in the case of Facebook advertising is the maximum amount that an arbitrageur is willing to pay to receive one lead. This metric helps you control your advertising costs, providing a return on investment (ROI). That is, this metrics is important in order not to pay for advertising if it is unprofitable.
The maximum cost per lead should be based on the budget analysis, the expected income from the lead, and the average lead-to-customer conversion. Understanding the maximum cost of a lead allows you to optimize advertising campaigns, reduce costs, and increase their effectiveness.
Calculation formula:
(Payout*Approve)/(100%+Thresh%)=Lead maximum price (at ROI 0%)
Calculation of the maximum cost per lead on the FB-Killa forum
You can also calculate the marginal cost of a lead using our tool - “Lead price calculator”
Eg:
$10 * 4 confirmed applications (our profit) - $4 * 15 applications (our costs) = $40 - $60 = -$20.
If the approval is 70%, then our earnings will be:
$15 * 14 confirmed applications (our profit) - $6 * 20 applications (our costs) = $210 - $120 = $90.
Thus, the higher the approval, the higher the income. It’s important to remember that a personal evaluation of an offer does not always correspond to its conversion, since we are not always the target audience.
HIGH APPROVAL – SMALL PERCENTAGE OF TRASH = GOOD OFFER
Reasons for poor approval of an offer
If in arbitrage there is a concept of a “good” offer and it depends on approval, then, accordingly, there is a concept when an offer is not profitable for advertising due to the fact that approval can be about 15% or lower. Approval rate depends on several factors. Let's take a closer look at each of them:
Squeezed offer
The concept of a “squeezed offer” in traffic arbitrage refers to a situation when a specific offer is actively poured by webmasters in a certain geo and the market is so filled with arbitrageurs that the conversion and profitability of this offer are reduced to an unacceptable level. Users have already seen such advertising many times and have long been familiar with these goods. They are not interested in it.
In these cases, affiliate marketers avoid working with such offers or geos since, due to market glut, clicks and purchases from users become rare, which leads to low conversion.
Sometimes advertisers relaunch an old offer under a new name and label and it works much better.
More about this
Disproportionately high upsell
Upselling is a marketing strategy in which the customer is offered to purchase additional goods or services at a higher cost after making an initial purchase. In the context of traffic arbitrage, upselling can mean inviting a customer to buy additional products or services after they have already made a primary purchase.
For example, your potential lead sends a request to purchase a certain unit of goods, for example, 1 jar of weight loss capsules for $80. Next, they get a call from a call center employee who acts on behalf of the advertiser. The client is asked whether they have submitted a request and are ready to purchase, Upon receiving a positive response, the upsell begins. The CC employee convinces the client to buy not just one jar as they wanted but, for example, 5 or more, saying that the course of administration of the dietary supplements is exactly like this and they can’t sell the client only 1 jar.
It is important to understand that for the call center, profit depends on the number of products sold. Therefore, their task is to convince each customer, who sent a request, to purchase as many units of the product as possible.
“Free” offer
You probably know that free cheese is only in a mousetrap (this is just such a case!). There are offers for which the payout is much higher than the amount indicated in the case of a purchase on the target landing page. For example, in the countries of the former CIS, such offers can be for 1 ruble, 99 rubles, or 147 rubles.
At first glance, it sounds tempting because the payouts for such offers are quite large—approximately 800 rubles. But despite this, you should be careful when starting to work with them.
Despite the high payouts, novice arbitrageurs should refrain from choosing such offers (at least at the beginning). Why? The fact is that upon purchase, the client is called and informed that they can purchase the product at a price of 99 rubles, but only if they purchase a set, or whole course, that includes several products. In this case, the first item in the set will cost a standard price, for example, 990 rubles, and the second will cost only 99 rubles.
If, with an upsell and a standard offer, a person can refuse additional offers and buy a product at the stated price, then in the case of free offers, by refusing additional products, the client can buy one unit of the product at its regular price of 990 rubles.
Naturally, most clients refuse such offers because they expected a lower price.
Let's move on to practice
At this stage, we roughly understand what kind of offers there are, how to choose them, how to calculate ROI and how to calculate the maximum lead price for the payback of the launch.
Let's move on to practice and start selecting and analyzing an offer - [Day 2] Selecting and analyzing an offer for the pouring. How to choose an offer? (practice)
An offer in arbitrage is a product or service promoting which the arbitrageur receives payment for confirmed leads.
Selecting an offer is not just a step, but a key moment when working with an AP. You can choose many offers and pour traffic on them, but if these offers do not get approval or there is a high percentage of trash, you can lose your advertising budget.
In the arbitration sphere, there is such a concept as “pouring onto a dumpling shop” (and this is exactly this case!). Therefore, it is important not to just select at random but to carefully choose an offer, taking into account our recommendations and the advice of your personal affiliate manager.
At the same time, you must understand that you can register in a large number of APs, do analytics on the spy service and FB advertising library, take customized offer from the manager, and still end up in the red.
All this means that there is no ideal offer, and there is no specific algorithm to search for it. The specifics of arbitration work are constant tests and hypotheses. And thanks to the tests, arbitrageurs can find a bundle that gives them the most profit.
The concept of a good offer
As we already wrote in the introductory part, an offer is a proposal from advertisers that is promoted by arbitrageurs (Buyers, Webmasters). These offers can include absolutely everything, from products with a wow effect to potency products, and we’ll focus on the latter.
The most important thing is not to think about whether these goods are bought on the Internet and who needs them. You have to understand that if there are large arbitration teams and media buying agencies, there is a demand for each product. There is only a question of the cost of the lead and how profitable it is.
If we sell products from AP, then in addition to the lead price, two indicators are important to us: approval and trash.
Approval is the process of confirming a request from the AP. In simple words, when, thanks to your ad, a person sends a request for a product, and when contacted by the AP, a person agrees to the purchase and delivery conditions of this product, this request receives approval, and you are paid according to the offer. Accordingly, the lower the approval rate, the lower the percentage of payments you receive from the offer.
Trash is an invalid request (duplicate, incorrect data, unanswered call).
There is also such a thing as “Rejection”. This is when a person listens to the CC offer over the phone and refused to purchase.
But it’s not always worth focusing on approval readings in offer statistics. It happens that there is little data, and approval rates can be low or, on the contrary, high (or even 0). It happens that an offer is brand new or there are no public statistics on it. Therefore, be sure to check with your personal manager.
Up-to-date information on approval and trash should be requested from the manager.
Still basically, the main indicators of a good offer in arbitrage are metrics with a high percentage of approval and a small percentage of trash.
Thanks to this, we will be able to drive traffic at a higher price and still be in the black. Keeping the price low will also increase our ROI.
ROI is the profitability ratio, or return on investment. It is calculated as a percentage.
ROI calculation formula:
For example:
We received 10 leads from our advertising:
4 leads – approval
3 leads – rejected
3 leads – trash 🗑
Offer payout – $30
4 leads x $30 (offer payout) = $120 (this is our income)
But at the same time, we spent $90 on advertising (Facebook traffic) and consumables (antidetect, proxy, account, etc.)
Let’s calculate ROI
120-90/90x100%= 33%
33% is a fairly low ROI, but it is already positive, which means you can continue to try working with this offer.
You can always calculate your potential ROI on our website using our ROI calculator.
How to calculate the maximum cost of a lead
The maximum cost per lead in the case of Facebook advertising is the maximum amount that an arbitrageur is willing to pay to receive one lead. This metric helps you control your advertising costs, providing a return on investment (ROI). That is, this metrics is important in order not to pay for advertising if it is unprofitable.
The maximum cost per lead should be based on the budget analysis, the expected income from the lead, and the average lead-to-customer conversion. Understanding the maximum cost of a lead allows you to optimize advertising campaigns, reduce costs, and increase their effectiveness.
Calculation formula:
(Payout*Approve)/(100%+Thresh%)=Lead maximum price (at ROI 0%)
Calculation of the maximum cost per lead on the FB-Killa forum
You can also calculate the marginal cost of a lead using our tool - “Lead price calculator”
- Fill in all the fields, payment in USD, average approval %, and average trash % for the offer (you need to specify this with the manager).
- Write down the desired ROI.
- Click "Calculate".
- Get the maximum permissible price per lead in FB for payback according to the ROI we need.
Eg:
- The cost of a lead on FB is $4.
- There were 15 leads in total.
- The payout for each confirmed lead is $10.
$10 * 4 confirmed applications (our profit) - $4 * 15 applications (our costs) = $40 - $60 = -$20.
If the approval is 70%, then our earnings will be:
$15 * 14 confirmed applications (our profit) - $6 * 20 applications (our costs) = $210 - $120 = $90.
Thus, the higher the approval, the higher the income. It’s important to remember that a personal evaluation of an offer does not always correspond to its conversion, since we are not always the target audience.
HIGH APPROVAL – SMALL PERCENTAGE OF TRASH = GOOD OFFER
Reasons for poor approval of an offer
If in arbitrage there is a concept of a “good” offer and it depends on approval, then, accordingly, there is a concept when an offer is not profitable for advertising due to the fact that approval can be about 15% or lower. Approval rate depends on several factors. Let's take a closer look at each of them:
Squeezed offer
The concept of a “squeezed offer” in traffic arbitrage refers to a situation when a specific offer is actively poured by webmasters in a certain geo and the market is so filled with arbitrageurs that the conversion and profitability of this offer are reduced to an unacceptable level. Users have already seen such advertising many times and have long been familiar with these goods. They are not interested in it.
In these cases, affiliate marketers avoid working with such offers or geos since, due to market glut, clicks and purchases from users become rare, which leads to low conversion.
Sometimes advertisers relaunch an old offer under a new name and label and it works much better.
More about this
Disproportionately high upsell
Upselling is a marketing strategy in which the customer is offered to purchase additional goods or services at a higher cost after making an initial purchase. In the context of traffic arbitrage, upselling can mean inviting a customer to buy additional products or services after they have already made a primary purchase.
For example, your potential lead sends a request to purchase a certain unit of goods, for example, 1 jar of weight loss capsules for $80. Next, they get a call from a call center employee who acts on behalf of the advertiser. The client is asked whether they have submitted a request and are ready to purchase, Upon receiving a positive response, the upsell begins. The CC employee convinces the client to buy not just one jar as they wanted but, for example, 5 or more, saying that the course of administration of the dietary supplements is exactly like this and they can’t sell the client only 1 jar.
It is important to understand that for the call center, profit depends on the number of products sold. Therefore, their task is to convince each customer, who sent a request, to purchase as many units of the product as possible.
“Free” offer
You probably know that free cheese is only in a mousetrap (this is just such a case!). There are offers for which the payout is much higher than the amount indicated in the case of a purchase on the target landing page. For example, in the countries of the former CIS, such offers can be for 1 ruble, 99 rubles, or 147 rubles.
At first glance, it sounds tempting because the payouts for such offers are quite large—approximately 800 rubles. But despite this, you should be careful when starting to work with them.
Despite the high payouts, novice arbitrageurs should refrain from choosing such offers (at least at the beginning). Why? The fact is that upon purchase, the client is called and informed that they can purchase the product at a price of 99 rubles, but only if they purchase a set, or whole course, that includes several products. In this case, the first item in the set will cost a standard price, for example, 990 rubles, and the second will cost only 99 rubles.
If, with an upsell and a standard offer, a person can refuse additional offers and buy a product at the stated price, then in the case of free offers, by refusing additional products, the client can buy one unit of the product at its regular price of 990 rubles.
Naturally, most clients refuse such offers because they expected a lower price.
Let's move on to practice
At this stage, we roughly understand what kind of offers there are, how to choose them, how to calculate ROI and how to calculate the maximum lead price for the payback of the launch.
Let's move on to practice and start selecting and analyzing an offer - [Day 2] Selecting and analyzing an offer for the pouring. How to choose an offer? (practice)
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