Things to consider before deciding
A few remarks before we dive some more into determining if an offer may be profitable.
The first thing is that you may find a given offer in more than one affiliate network. Both networks may have different payouts for the same offer. Product owners (vendors) are not always signing an exclusive deal with a network, therefore it may appear in various places. Networks may decide on various commissions for a given offer, hence different payouts. If you have signed up for more than one network, you can look for a selected offer across all networks.
The second thing is that some offers in some networks require further approval. You have to request an option to run them and wait for the decision. Usually these kinds of offers are considered better than the ones that can be run freely.
Now, without further ado, let’s discuss how to tell the potential profitability of an offer.
1. Offer matches your vertical and niche
We’ve talked about selecting a niche and vertical before and at this point, you should already have made a decision on the area you want to advertise in.
Most networks allow you to filter offers by verticals and sometimes you even get more advanced niche filtering options, especially from networks that specialize in a given vertical. But most likely you won’t get filtering options that allow you to filter down to a single niche – there are simply too many of them with new ones appearing regularly. You have to go over each one and read its description.
2. Offer matches your traffic and ad type
Offer descriptions contain a lot of information, mostly about what is and what is not allowed. Most offers are suited for a given traffic type only, so when browsing, look only for pop or push offers, depending on the ad type you want to run.
Traffic requirements stretch beyond stating traffic type. There may be additional requirements that say:
If adult traffic is allowed. Running traffic against this recommendation is the easiest way to get banned.
If incentives are allowed. Incentive traffic appears when you promise a visitor something in return (a free sample or bonus points in a mobile game).
If there are any click or conversion caps. Some offers only allow for a set number of conversions per day. Use Voluum’s Offer Cap feature to redirect traffic to another offer when the cap is reached.
You can find an example of allowed traffic for a random offer in Mobidea:
Follow the offer requirements to be on good terms with the affiliate network.
3. Offer has been profitable for others
Affiliate networks often provide various metrics to tell you how a given offer works for others. Mobidea for example has the ‘Opportunities’ tab that shows you the performance of a given offer.
Other networks also provide you with some statistical information or even specially calculated metrics. The prime example would be ClickBank with its Gravity score.
The gravity score describes how many affiliates made a sale with a given offer. It is a good, but not the best, indicator of an offer’s profitability. Why not the best? Because of these reasons:
Gravity score only tells you how many affiliates made a sale, not how many have tried it.
High gravity score means big competition from players with big budgets.
High gravity offers may also come with a high refund rate that kills profitability.
Whichever network you go with, read their blogs or documentation to learn if it uses any profitability score or what kinds of statistical information it provides.
4. Conversion flow is easy and payout conditions are clear
A conversion flow is the set of steps that a visitor has to make in order to convert. As we’ve mentioned before, a conversion is not only a product purchase, but can also be other events. With these other types of events come different conversion flows. It’s best if a conversion flow is easy and requires as little effort as possible to complete.
A purchase requires a user providing delivery and payment details. The latter can be simplified by using carrier billing, so an option to add the cost of (usually digital) purchase to your phone bill. This solution is very popular in Tier 3 countries. In more developed countries, carrier billing is often subject to various regulations that limit its ease of use. Depending on the exact flow, the carrier billing may come in the form of SOI (single opt-in) or DOI (double opt-in) flows. The first one only requires a visitor to click one time to use carrier billing, the second one adds an additional confirmation step.
Newsletter signup comes with a relatively easy conversion flow that requires a visitor to submit their email address and, on certain occasions, confirm it by clicking an activation link in an email message.
Leadgen is a type of conversion where the goal is to collect forms of user data known as ‘leads’ (like an email address, phone number, home address, etc). These can differ vastly in terms of the difficulty of the conversion flow. Generally speaking, the more fields a visitor has to fill out, the less likely he or she is to complete it.
CC (credit card) submit is probably the hardest conversion type to complete. It requires a user to submit a valid credit card number, and sometimes, verify it with a $1 returnable fee.
App downloads in most cases are simple but heavily dependent on a visitor’s Internet connection. Mind that if you plan to advertise a download-heavy app in an area with poor connectivity, you may end up with many missed opportunities because of users that tried to download your app and failed.
A good practice is to try to complete a conversion on your own. You will then know what it takes for visitors to get you one. If it’s hard for you, it’s definitely hard for them.
5. Competition is reasonable
Wait, you thought that the best offers come with no competition?
Firstly, life is not that perfect. Good offers almost always have some other affiliates that already run them. Don’t count on discovering fresh offers that will convert like crazy just for you.
Secondly, you DON’T want to have an offer with no competition. Why? Think about it: if there are cookies at the party and no one eats them, do you think they are tasty? The same thing goes for affiliate marketing – competition is a mark of quality.
Choose popular but not the most popular offers. If you sort offers by popularity, don’t be afraid to look at the second or third search result pages.
6. Few refunds and lots of upsell options
The last thing I want to discuss here is an additional money circulation that may happen after the conversion. What this vague term describes are two ways your final revenue may increase or decrease:
Refunds. Some offers, especially for physical products, do come with refund options. This of course differs from country to country, but in many cases a visitor can return a product and get a refund. The refund obviously means that your payout will be withdrawn. So even if a conversion occurs, you still have a certain period of time where the money you’ve earned isn’t fully yours. High refund rates are also a testimony of low quality products, so if your affiliate network provides the information about the refund rate, study it carefully.
Upsells. They are subsequent sales of the same product or sales connected with an original sale. For example, a visitor may decide to buy another bottle of the skin product you advertised or make an in-app purchase after installing an app. All these events are usually also rewarded with a payout and they may constitute a significant portion of your earnings. Look into upselling opportunities to elongate the lifetime value of a visitor that already had converted.