(Part 1) Evaluating Online Traffic: Mistakes You Want to Avoid When Buying Media
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(Part 1) Evaluating Online Traffic: Mistakes You Want to Avoid When Buying Media

Eric Beer Performance Marketing media buying arbitraging media

(Part 1) Evaluating Online Traffic: Mistakes You Want to Avoid When Buying Media

“Give a person a fish, and you feed them for a day. Teach a person to fish, and you feed them for a lifetime.”

Are you ready to learn how to fish? Because I’m ready to teach you how to find the fish so that you don’t need me (or anybody else). It’s the high-level framework, the strategy you can use no matter where you’re buying media.

Today, I’m going to take you through the process of evaluating media. I’ll show you how to buy traffic and determine if it works for you. What I want you to understand is the concept of analyzing the traffic and how to best optimize what you’re doing. 

Yes, it includes some math. When you’re going into buying traffic, there are a lot of numbers – click rates, open rates, conversion rates… you can dive in the stats all day long and go after all these different numbers.

But don’t freak out – I’ve simplified the process so you can focus on just a few numbers that really matter. I’ve taken out all other noise from the equation, I promise! This is how my mind thinks about this.  

So tune in for the first of two episodes and find out:

– how to analyze data to see if your campaign is working or not 

– how to optimize and scale the business 

– what mistakes people usually make when buying media

Let’s dive in and catch some fish!

 

What Do We Actually Do?

 

When we say “buying traffic,” – what do we actually do? 

As we said in one of the previous episodes when we talked about the AISTP (attract, identify, segment, target, position) framework, first we’re defining the audience – who are we talking to or who are the people we’re looking for. Then we got to figure out where they are on the internet. 

Once we can identify where they’re hanging out, we have to find a way to grab their attention. It means we got to start creating ads to attract a particular audience. The ads need to create curiosity – to get somebody to say, Whoa, what’s that!? and click on it.

When they click, we’re sending them to a destination of our choice. It can be, for instance, our landing page to capture data (a content page, a lead form, an interstitial page, video page), or you could send them to subscribe to your YouTube channel, podcast, or whatever. 

Somebody who’s an affiliate can send people who click to a third-party landing page. We talked about the concept of affiliate marketing – if I own an offer, I can give it to somebody to drive traffic to my page, and then I pay them on some sort of commission.

So today, we’re analyzing buying media for ourselves, no matter whether it’s going to a third-party landing page or our own landing page. When it comes to arbitraging media, it’s all relatively the same thing. 

I’ll show you an example with real numbers to illustrate important aspects of media buying. (Those who tune in for the full episode on Youtube will see the spreadsheet with the data that I’ve prepared to make it easier for you to follow the process.)

 

Two Metrics That Really Matter

 

Pretend we’re running a bunch of different offers (all kinds of offers – home improvement, dental insurance, solar energy for homes, legal services… it doesn’t matter). In my example, we have 18,244 total clicks for one of the offers, and we’ve spent $307.65 to get those clicks.

We’re paying a publisher for impression (click) – it means we’re paying on a CPC to the person we’re getting the traffic from. Right now, we’re paying $0.02 per impression. That’s the CPC (our cost per click) or CPI (our cost per impression) – it’s the same thing.

On this 18,244 clicks, we generated $3,193.19 (total gross revenue). So, the net revenue here is: $3,193.19 – $307.65 = $2,885.54. This means that we’re killing here!

But when we’re evaluating traffic, we need to know our cost to get that impression, to get that person from wherever they are on the internet over to one of our pages. Because our goal is to get people off of other platforms into our world. 

So, we’re looking at revenue per impression (RPI), which is $0.18 an impression. If we’re paying (about) $0.02 an impression, it means we’re netting out $0.15 an impression. And the net margin is amazing – 90%!

If we want to simplify everything, the two things that we’re looking at are what is our cost per impression (CPI) and what are we making on that impression – revenue per impression (RPI). These are the two metrics based on which you can determine if you’re making money or not.

 

(Not) Tracking by Source

 

Let me briefly mention a mistake I see people make is buying traffic, but they’re not tracking by source. Every placement wherever you buy traffic on the internet is a different source (Facebook, YouTube, various websites…). 

Why is it important to track by source? Simply put, you need to know what works and what doesn’t. If you don’t track every source, you’ll have no idea what you’re really making for every click from a source. You may know overall what you’re making, but that’s not enough. 

There could be one source that’s doing amazing. And then you can have 10 other sources that are losers. But if you have only overall results, you’ll keep the losers on because you don’t know that you’re losing money there. 

Also, you don’t know if you can do something to improve the performance of a specific source. Maybe your emails go to spam folders? Or email is not the right format for your users at all? Or you should be offering a better promotion to entice website visitors? 

So it’s crucial to track all the way down by each source – you need the accurate information, and you don’t want to lose money. When buying media (or hiring an agency to do that), you have to understand what’s going on to be able to give somebody directions on how to scale the business. 

 

It’s Not Always About the Margin

 

I want to show you another important thing that people lose sight of and make one more mistake that hurts their growth in the business. This is the secret you need to understand. 

So what have we said? We’re making 90% margins – we’re doing great on this campaign. Amazing! Ridiculous! Many people I see buying media or I work with would stop right there.

But, the thing is that it’s not necessarily always about the margin that you’re making. 

So, let’s figure out how to optimize this business. We want to find out if more traffic is available from the same source. If there is more volume, we may be ready to work on a lower margin.

You may be like, why do you need the volume when you already have a huge margin? Now, we have to remember that every player in the media arbitrage (publisher, customer, advertiser, you) needs to be happy to have a successful business.  

In this case, the publisher (a platform) needs to win also. If we pretend that 18,244 clicks are a monthly total, then we’re getting 589 clicks a day. For a platform that may have a ton of traffic, that’s nothing. 

So, you need to understand how publishers evaluate traffic to see if your super-profitable campaign works for them.

 

How Does Google Make Money?

 

Publishers evaluate what they’re making on their traffic and see it as an effective cost/revenue per 1000 or an effective cost/revenue per impression. 

Let’s make this easier to follow: an effective revenue per 1000 (eRPM) and an effective revenue per impression (eRPI) are the exact same thing – $0.10 eRPI is $100 eRPM.

Well, Google and other search engines don’t make money when you search for things, but they monetize their traffic, allowing ads on their pages. So, people are gonna bid for ads and pay on a PPC (pay per click). 

Let’s say there are two bidders – Company1 offering $10 and Company2 offering $5 per click. Which offer is more valuable? It seems obvious – $10 a click. But that’s not necessarily true. Because they’re looking at it on how much are they making on a revenue per 1000.

How do they figure that out what they are making on every impression? We need two parameters: 

– impressions that each company is seeing

– click rate %

Let’s pretend they both have 50,000 impressions. Now, click rate percentage is super important for Google. Because they’re looking at it as how much they are making. Just because the company is bidding $10, it doesn’t mean it is paying $10 – they only pay when somebody clicks.

 

Google Maths

 

Then, what happens if Company2’s ads are way more compelling to the user than Company1’s? 

Let’s say Company1 has a 1% click rate and Company2 has a 5% click rate. On 50,000 impressions, Company1 has 500 clicks and Company2 2,500 clicks.

So, what are they spending?

Company1: 500 x $10 = $5,000

Company2: 2,500 x $5 = $12,500

Well, now I ask you, which one is more valuable? Now it’s obvious! So, it’s all about this click rate. 

Google’s looking at this as what is the eRPM:

Company1: $5,000 : (50,000 : 1,000) = $100

Company2: $12,500 : (50,000 : 1000) = $250

Or the eRPI:

Company1: $100 : 1,000 = $0.10

Company2: $250 : 1,000 = $0.25

This is how Google evaluates the business. So, right here, Company2 is the winner. You have to keep this principle in mind when evaluating your own campaign.

I hope you recognize the value of today’s presentation, so I encourage you to tune in for the full episode on YouTube because I’ve shared a lot more valuable info.

Also, don’t forget to join me next week because this is only the first part of the longer story about buying traffic in the media arbitraging business.

If you have any questions or you want to suggest a topic for the podcast, shoot me a message on social media or in my text community (917-636-1998) and let me know!

If you’d like to get bonus Performance Marketer content, sign up for my SurveyDetective VIP waitlist!

🕵️‍♂️  Sign up for the SurveyDetective VIP Waitlist HERE

I’m looking forward to hearing from you! 

See you next week!

 

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Transcript…

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Eric Beer 00:00

But really, at the end of the day, all you’re looking at are these two numbers. What are you making on a click? What are you paying on a click? What are you making on an impression? What are you paying to get that impression? If you can simplify your business in that way, that will take everything out of the equation that’s like really confusing you to identify if the business is profitable or not.

I spent the last 17 years building my eight-figure performance business without using any of my own money, working with some of the most brilliant direct response marketers in the world today. Now I’m looking for entrepreneurs to join my affiliate army built on ethics, transparency, and good old hard work. Join me to change the perception of how people view the greatest business in the world, affiliate marketing, and follow along as I learn, apply, and share performance marketing strategies, working with some of the brightest people on the planet. My name is Eric Beer, and welcome to the Performance Marketer podcast.

Welcome to the channel, my name is Eric. And every day on this channel, we talk about media arbitrage, how to generate leads, how to monetize media online and generate leads and convert them into customers and sales, and all that good fun jazz. And today, I’ve got a special treat for you. And I’m going to take you through a process of understanding how to evaluate media, how to understand how to go and buy traffic, and then determine is it working for me, is it not working for me, and try to simplify things because I find that a lot of people when we are working together when math gets involved, I see people’s brain just like fall apart. And there’s a lot of numbers when you’re going into buying traffic, right? It’s just there’s the front end an impression, then there are people that will click right. Maybe it’s an email and they have to open that it’s what’s the click to sign up? Conversion rate, right? What’s the conversion rate in the backend, there are tons of numbers, right, you can dive in all day long and go after all these different numbers, the treat I have for you today is that I’m going to go through and show you how to evaluate some media. I have some numbers here of different things that we’re doing online and just kind of, don’t worry about the actual numbers that I’m gonna show you. But just try to understand the concepts that I’m going to work with you on to grasp and understand that you don’t have to buy media, you can go hire an agency. But it’s really important that you understand how you analyze the traffic, the stats because the numbers tell a story. And you need to figure out how to best optimize what you’re doing, I find there are guys that like, I look and see, you know, what’s going on with the media buy and I’ll go review with one, one of my guys and, you know, my, oh, how are you evaluating this, and they’ll look at it, and they’ll show me. And they just, they’re doing a great job. But they over confuse things, there’s just noise that needs to be taken out of the equation, right? When there’s evaluating the traffic, just the performance, that’s just a few numbers that you can just look at to determine if it’s working or not. Now, if you’re looking at the optimization of changing things, right, changing, maybe the creative or the landing pages are where you know, the user is going to go the flow, etc. Different story, right, you can look into a lot of different numbers, each one tells a story. But in this instance, we’re gonna keep it super, super simple. I’m going to show you, you know, how I do it, how my mind thinks about this. And then you can work with me here, but I just want to, you know, be really simple on what’s going on. So, if you look at when someone’s buying traffic, OK, you have the whole internet. And that’s got traffic all over the world. All over the world. So, here’s a globe, right with, like, all these different cities and states, and I’m not an artist, right? So, we know that we’re looking for a certain person when we’re out in the marketplace, and the way we buy traffic is right, we talked about this. First, who are we talking to? Right? Who are we looking for? Then we got to figure out where they are in the internet. And once we can identify where they’re hanging out. Now we got to grab their attention, right? We got to start to create some ads and then buy traffic, right so we create ads. Alright, so, here’s an ad. Right? So, maybe it’s a video with the click here, right? So, what we’re doing here is we’re creating all different kinds of ads, because this is the ad. Alright? This is the ultimately attracting. Right? We’re attracting somebody, right? When we talk about the AISTP, right, (Amazon is selling toilet paper), AISTP. We’re attracting people with this, right? We’re trying to create a pattern interruption, right? We’re trying to get somebody to say, you know, whoa, what is that, right? We’re trying to create some curiosity, right. So, somebody clicks, we get somebody to click, now we’re sending them to a destination of our choice, right? Our landing page. And in this scenario, this could be a number of things, right? It could be a content page, it could be a lead form, it could be, you know, just a, an interstitial page of video page, you could send them to your subscribing to YouTube, right, which is where we are right now. So, you know, maybe you’re hear from us getting you to subscribe to my channel, by buying an ad, you then clicking doing something, maybe you took a survey. And at the end of it, the goal was to try to get you to subscribe to my YouTube channel. So, if you went through that, then awesome, I’m happy you’re here. Right? But that’s, that’s the concept, right? It could be a simple, you know, subscribe to my YouTube channel, a little teaser here, click and then go right to my YouTube channel. Right? So, in that scenario, that would be to YouTube’s right. So, this is the destination URL. Right? So, in this scenario, we could be sending somebody to a landing page, which we own to capture data, or we could be sending them to YouTube to get them to subscribe, right? They could send them to my podcast. Again, to subscribe. I only own this page right here, right? An affiliate, right? Somebody who’s an affiliate, can send something to a third-party landing page, right? Third party. So, if I own an offer, I can give it to somebody to drive traffic to my page, and then I pay them on some sort of commission. OK, so that’s what we’re going to look at today is buying media for ourselves, whether it’s going to a third-party landing page or our own owned and operated landing page, right? It doesn’t really matter how we’re evaluating it. It’s all relatively the same thing. OK.

And here is how we’re going to do it. So, let’s go over to the spreadsheet here. And take a look. So, pretend like we’re running so a bunch of different offers here, right? And we’re looking at clicks, right. So, here’s the total clicks. So, we’re seeing like a home improvement offer a dental insurance offer solar energy for homes, beginner day trading, online, legal services, Medicare supplemental insurance, right? It doesn’t really matter. Like, what I’m trying to teach you guys here. It doesn’t matter what you’re promoting. I’m trying to teach you something that is evergreen. OK. Everybody know what evergreen means? Regen? Yeah. OK. It lasts forever, right? Like, I don’t want to teach you something that you’re going to learn for the next year. And then it’s not relevant. I want to teach you something that you can use no matter where you are on the internet, where you’re buying media. And it’s the concept, the high level frameworks, the strategy behind all of this, that allows you to learn something that will last forever. And now it’s a it’s like, what do they say? Give a man a fish. He eats for the day. Give him a show a man how to fish eats for a lifetime. Oh, terrible delivery, terrible delivery. But you guys, I’m authentic. I am who I am there. You can tell that this isn’t scripted. It’s just me talking to you guys. But yeah, that’s exactly right. So, Right. It’s teach a woman how to fish and she’ll eat for a lifetime. So, that’s what we’re doing here. We’re teaching you how to fish. We’re teaching you how to find the fish so that you don’t need me. You don’t need anybody. You’re not depend on anybody but yourself. So, when you understand this stuff, boom, your money, right? So, I’ll walk you through this a little bit. So, pub clicks here. Right here is the spend that we have for getting those clicks, right? So, we’re talking about the clicks here. Right? So, here’s the click right when somebody goes, right, so internet and traffic, so let’s say Facebook Google websites, right? They’re all going to get you traffic, you’re getting your ad in front of that traffic, that person that you’re looking for. And we’re looking for a click, that is our goal, our click right here, and we’re paying on a click basis. Right? So, 18,240 clicks, right? And we’re paying $307.65. So, paying a pub for impression, right? Well, what does that mean? So, when you’re paying for a click here, to us, it’s an impression to the person that you’re getting the traffic from, you’re paying on a CPC, right? But from here, we’re looking at it on an impression. So, I like to look at revenue per impression RPI. OK, what are we paying to the partner right now? It’s two cents, right? So, we’re paying two cents a click at 18,240 clicks, we’re paying $307. And here is something that we look at, which is click discrepancy. I won’t go into too much detail here. But ultimately, what is the partner showing on how many clicks they got us? versus what is my system showing me of what we received on our pages here? Right? So, you know, discrepancies are big, but it’s, it’s not really important for this. So, let’s just get rid of the noise. All right, we’re closing this down, and I blacked things out, just because it’s noise for you guys. A lot of stuff here is not relevant. I want to keep it super simple to show you guys how to do this. So, on this 18,244 clicks, we generated $3,193.19. Right? So, the net revenue here is $3,103. Minus the $307 that we paid to get those clicks to equal $2,085.54. Oh, baby, right. Yeah, your site, you’re killing it, right. The pub CPC here of what we have, this is what we pay the pub in their system. This is on our cost per impression, right? So, we’re looking at revenue per impression, the CPC is really our costs per impression, right? The equal the same thing. It’s the same thing here. Right? Let’s get some other colors here. So, same thing, right? So, the CPC is just what you’re paying out to the partners. But when we’re evaluating traffic, we need to know what is our cost to get that impression, to get that person from wherever they are, on the internet, over to one of our pages, that’s our goal, our goal is to get people off of other platforms into our worlds, right?

That’s why we want to capture data, right on a landing page, we can have some lead forms, right? So, like a lead form, you know, name, email, maybe you need phone, whatever that is, right? Why someone going to give you that? Well, you got to give them something that is interesting, right? That’s why you either may have something on there that you’re giving away for free, if that is of value to the person, and you’re trading them their information for your free 10 secrets on how to consolidate debt. Right? Whatever that secret is, whatever that value is that you’re doing, right. And when we could talk about that we’ve done it before lead magnets, whatever, right. And other ways to do it is we can do it, driving into a survey, right. And here, we have our headline that’s curious based, and our start page, because we’re driving people somewhere, and we don’t want to just ask them to give us their information right away. We just, you know, you want to talk to them, you want to understand that you want to try to give them something of value in a different way. So, you create some curiosity, the beauty of like, surveys, quizzes, right? The same thing. Quiz is that you’re allowing somebody to come in and learn something about themselves, you’re getting them curious about whatever it is, right? So, it’s, uh, you know, what type of home is right for you, five mistakes people make when they’re consolidating their debt, you know, things like that. Right? And that’s interesting, right? There’s four types of parents, which one are you? You know, I’m learning some of myself, right? And you’re making a promise, you’re gonna tell them at the end. So, then you get people to answer all these questions that are really awesome at the end, you get there. And then to give them the results, you make them give you something in return, right? You’re you’re giving them something of value, so then they can give you their name and email. Right? So, things like that, right? But whatever it is, you’re driving traffic to all these places. And we’re talking about how to figure out how to look at the data and see if it’s working or And then how to scale it. Right?

So, OK, so here the works out to two cents that we’re paying for an impression. And we look at it as the other one here, which is, how do we circle that? Let’s do some grey. Our RPI. OK. So, really, the two things that we’re looking at to simplify everything is, what is our cost per impression? And what are we making on that impression? So, our CPI is our cost per impression, or RPI is our revenue per impression. So, if you take everything out of the equation, you look at it like that, and you can determine if you’re making money or not, right? So, if you look here, right, we got 18 cents an impression, we’re paying two cents an impression. And here, now we’re netting out 15 cents an impression, right? net margin is amazing. OK, and this is something, there’s a reason why I’m showing you these numbers in this way. I want to show you something that’s really important that people, people lose sight on this and make this mistake, and it hurts their growth in the business. OK. So, this is the secret that I’m going to tell you that you need to understand. When you’re buying media, when you’re a media buyer. Or if you’re not even necessarily the one pushing the buttons. People are buying media, but you’re you’re driving it you’re understanding what’s going on so that you can now give somebody some direction on how to scale the business, right. But right now, we’re making 90% That is killer, right? Oh, my God, like, that’s a ridiculous business. So, you’re, you’re ultimately getting 90% Of all the revenue you’re generating. It’s awesome, right? Well, let’s go over here and figure out how to optimize this business. Alright, let’s see. We talked about this. And we seeing that we’re making 90% margins. And let’s see if we unhide this. Yes. Cool. All right. So, I put this here for you guys. So, that we’re on the same page, you don’t have to go back and forth. So, let’s make this screen. Right. This is our revenue per impression. Why is this continuously going up? And this is our cost per impression. Cool. The beauty of the internet and the beauty of technology. OK, so here we go.

On this campaign, we’re doing great, we’re making 90%. The thing is that it’s not necessarily always about the margin that you’re making. OK. Now, a lot of people that I see buying media that I work with, will stop right there. And that’s their placement on wherever they’re buying traffic. OK, just so we’re clear, every one of these is a different placement, a different ad, somewhere on the internet. And there’s different sources, right? There’s different offers, there’s different sources. So, like, you’re you’re looking at it by every click, OK? You it’s really important. You know, it’s another mistake I see people make, they’re buying traffic, but they’re not tracking by source. So, they have no idea what they’re really making for every click from a source. They may know, overall, what they’re making. But there could be one source that’s doing amazing. And then there’s 10 other sources that are losers, but they keep the losers on, because they don’t know if you’re losing money there. Right? They’re not tracking all the way down to it by each source. So, that’s really important. Guys, you got to do that. OK, the best you can. Here we go with this. We have 18,000 We’re making 18 cents, we’re paying two cents. Now, what we want to do here, OK, is, right, we’re making a huge margin. We want to try to understand from where we’re buying traffic, is there more available to us? OK, you guys got to understand that you’re competing with the world, OK? You need to understand that a publisher, a platform there, they need to win also, right? We always talk about everybody needs to win, right? The publisher, the media, the media guy needs to win, the customer needs to win, we need to win, the advertiser needs to win, everybody needs to win, right? We all need to be happy so that we can now all have good business. If somebody is losing the equation, then it’s a loser, right? So, if the pub is losing, right, on two cents, then they might be like, we’re not really giving, we’re only giving you 18,000 clicks.

And let’s pretend like it is monthly, right? We’re only getting 18,000 clicks. If we looked at that by by day, insert, you know, let’s say daily clicks. Alright, this divided by 31. Right? So, we’re getting 589 clicks a day. For a platform that may have a ton of traffic. That’s nothing that is nothing. And while it’s awesome, like what’s going on and We have a good business here pretend like that’s your only business, right? Well, we need to figure out if we can get more traffic. And to do that you got to look at as you got to understand that, and I’ll explain this to you. Let me show it to you on on this pad here. OK, cuz that’s important publishers. Right? The media, right? They’re evaluating what they’re making on their traffic, right? So, they look at it as an effective cost per 1000. Right, or an effective cost per impression, and effective revenue per impression, an effective revenue per 1000. OK, so they’re looking at stuff as an effective revenue, per 1000, effective revenue per impression. It’s the exact same thing. OK. I like to look at it by impression. Personally, it’s just easier numbers. And it just for people that are new, it just confuses them when you start doing it by 1000s. So, I just do that, right, but didn’t do today. It’s like this, right? So, if it’s 10 cents an impression, that is a $100. RPM, OK? Same thing, you get the same thing. OK. All you’re doing is you’re taking the 100, dividing by the 1000. And it’s 10 cents. That’s how these publishers are looking at it. So, I’ll give you an example of how Google does it. Right. Does anybody know how Google makes money here? Like, raise your hand? Yes, I do. I will tell you that the majority of people in this world do not understand how Google makes money. Right? So, if we look at Google, right, we know that there’s a any search engine, search search, the product is the organic results. So, if you’re searching for pet food for a canine, then the organic results, the better it is, the more relevant it is, the better Google is to you. Right? If you go and you search for something, how frustrated Are you and you search for something on Google, or Bing, or wherever, and you search and the results are nowhere near what you’re looking for? Right? If that keeps happening, you’re not going to use it. But that’s the product of what Google started their business on. OK. Now, someone said, Wait a second. So, it’s great that we have that here. Now we need to monetize the traffic, we need to make money because you search and they give you results. You’re not making money. Right? You’re not paying anything to search. So, how do they make money? Advertising? Advertisers? So, what do they do? They allow ads here, right? So, AD AD, they may put it here, an ad. Ad. Right. So, what happens with this business here? OK, is ours. Right. So, we’re gonna pay now, on a PPC, OK? It is. Pay per click. OK. So, what’s happening is people are gonna go bid for this for clicks. OK. And I’m going to do this quickly, to show you. But let’s see, we have two different advertisers. Right? We have company one, and company two. OK. Now, let’s say that this guy is bidding $10 a click. OK. And let’s say that this guy’s bidding $5 a click? Right. So, let’s say company one. Company two. OK. That’s their ad. And that’s their ad. Right? So, we have two ads here. Which one is more valuable? Hmm. Well, from the looks of it, it looks like the $10. One is more valuable in the $5. One, right? Because you’re looking at it on what somebody is willing to pay per click, right. Well, no, that’s not it. That’s not necessarily true. Because they’re looking at it on how much are they making on a revenue per 1000? OK, what are they making on every impression, right? How do they figure that out? Well, OK, let’s take the impressions. And then we need to have the click rate. Percentage, right. Make sense, guys. So, here, I’ll show you on here, right. We have Google. We have company. Company one. Company two, right. PPC either willing to pay company one’s paying 10 bucks. This guy’s paying five bucks. Right? So, impressions that each of those ads are seeing, let’s pretend like they both saw 50,000. Right? They’re both here. Let’s pretend like there’s only two companies that are bidding. And they’re showing up every time on the 50,000 impressions. OK? Now, click rate percentage is super important for Google. Right? Because they’re looking at it as how much are they making? Just because they’re there, they’re bidding 10 bucks, that doesn’t mean that they’re paying 10 bucks. They only pay 10 bucks when somebody clicks. Right? So, what happens if Company2’s ads are way more compelling to the user than Company1’s? Well, let’s pretend that these guys have a 1% click rate. And let’s pretend that they have a 5% click rate. OK, let’s get those percentages in there. So, we look at it here times the 1%. User clicks. Look at it here, times 5%. So, now here’s the total clicks. Right? So, what are they spending? Spent? 500 clicks times 10 is five grand 2500 clicks times five is 12. Well, now I ask you, which one is more valuable? Is the $10 PPC Ad more valuable than the $5? PPC ad? No. Right? The variable is this. Right? This is the variable? Yeah. Oh, that’s a bad color. Oh, blue. Yeah. Right. So, it’s all around this click rate. Now, let me just show you. Google’s looking at this as what is the RPM, right? What is the effective revenue? He fective revenue per 1000. Right? So, you take that divided by the 50,000 divided by 1000. And the effective RPM is 100. So, that divided by that boom. OK. Now, effective RPM, the effective revenue per impression, is that divided by 1000. Whoo. Right. I was right. Cool. That divided by 1000. And that’s what they’re making, right? This is what Google cares about. This is how Google is going to evaluate the business. OK. So, right here, company two is the winner, right? Boom, boom, winner, winner, chicken dinner. Loser, loser. Right? It’s great that they want to pay $10. But it just, it doesn’t work, whatever, whatever their ad is, is not clicking. So, Google’s not making money. So, you got to understand when you’re buying traffic, right? We’re buying traffic. Right? On. Let’s go back to that. When you’re buying traffic here, if this is Google, right, you need to understand, what does the publisher need to make to get traffic? That is so important. And you have to measure that in some some way. Right. And just for the just FYI, look, if I if I made this the same click rate. All of a sudden, now this is more valuable, right? 3%, still more valuable, right? It could perform not as well, but more valuable because they’re willing to pay 10 bucks, right? So, you kind of play with those numbers and mess around. Google just wants to make as much money as they can. And it’s just a matter of what is the most valuable thing to them on their page. And it has to be relevant, right? There has to be good user experience. Otherwise, you’re like, if you’re not having fun, and you don’t like it, then you’re not going to come back. And that’s a big problem. The publishers don’t want that they want you to stay, right TikTok, they want you to stay. They want you to hang out there as long as you can. Facebook stay in there as long as you can’t. So, they just work to keep you there. The longer you’re there, the more ad revenue they can generate off of you. And if you understand that, and you understand the rules of the game, then you work within those rules. And you try to figure out how to make something compelling for the audience that’s on that platform to now have a good experience and yet also you’re making money for that platform. It’s pretty simple, right? So, that’s how it goes here. Right? So, thing is, is that we want to look at how do we scale the business? And the thing is here is just because we’re making 90%. Isn’t that exciting, right? Because we’re making 18 cents on an impression we’re paying two cents, right? So, now what we’re trying to figure out is, how do we increase what we need to know? Is there more traffic available, if there’s more traffic available, and I can get more volume, I’m willing to work on a smaller margin than what I’m currently making. Right? However, if I can’t get more traffic, quality traffic, the same traffic that I’m currently getting, OK, I don’t want just more traffic. And if the value of that traffic is less to me, it’s just it’s not worth it. Right? So, what I’m trying to figure out here is, how much traffic Do you have how much traffic is available? Right? If I’m getting 589 clicks per day, how can I get more, I want more I want, I want 18,000 clicks per day, if we can maintain the same quality, the same conversion rates, the same click rates, the same conversion rates, the same back end conversion rates, if all of that remains constant? And I’m assuming that it will, right. And until it doesn’t, I will assume that it does, right? Well, I need to figure out what I can now increase the traffic. So, what I have here is the media CPC, allowable increase percentage, right? So, that is, let’s say, 100%. Let’s put 100% here. So, if you see our cost per click, the cost we’re getting to get to, can you see that is three cents $0.0337. And because of that, our new projected spend is $615, right? Well, if our traffic doesn’t increase, why would you do that? You already got a honeyed deal. You make a 90%. Maybe it’s the maximum of traffic you can get, maybe. But if there’s more traffic to be had, and you’re going to spend more money to do so, what’s going to happen is you’re getting more clicks. So, what does that look like? If you give them the $3? The three cents per click? Right? Let’s say you can increase it by 600%. Right? So, now all of a sudden, you’re spending 11 cents to get a click. So, now, your spend went up to 2153. Right? You’re making the where’s it, how much revenue? We’re making? 31 9319. All right. So, that’s what we’re making? What box? Is that? Is that a? Our three? OK, whoa. So, that’s our three. So, let’s put that here. OK, our current sensor that so you guys can see it? Total? Rev. And you and we don’t want that to be red, because we like making money. Right? So, equals our three. Green. OK. So, that’s what we’re currently making. Total. Right. So, how do you get 18 cents per impression? For us? We’re looking at Alright, 18,244 people are landing on my page, which is what we’re going to assume, right? There’s no drop off. And of that we’re making $3,183, which backs out to 18 cents per OK. You know, you can look at it as revenue per click over here, right? RPC. Right. That’s what you’re making on this click to this page. There’s drop off and all that jazz. So, in any event, here is what we’re looking at. Now, if we increase our spend from two cents to 11 cents 600%. Now, our spend is $2,153. So, we just went from making all that money, right? And we’re 90% margin. And we were making $2,885. Right? to Now, if we took this minus that we’re only making 1000 bucks, makes zero sense. Why would we do that? Well, because we should expect some increase in traffic. OK. So, if you look here, as we do that, let’s say we got 10% increase in traffic. So, now, our clicks go from 18,000 If we’re getting 18,000 clicks, we increase our bid by 600%. From two cents to 11 cents. Now, we get a 10% increase in traffic, we’re gonna now get 20,068 clicks. OK? So, how do you figure out how much money you’re making there at that point, right? This is what we were making $3,193. So, what do we do? We just take this, we’re assuming that everything’s gonna stay the same. OK? So, we’re making 18 cents per impression, right? Or revenue per click. So, we’re taking our revenue per impression, output, RPC, revenue per click. So, 18 cents times that 20,000 is $3,512. Right? So, the difference here is now look, projected new media spend, which would be $2,368.91. So, the net revenue here is now 1143 cents. Now, is that good. Let’s put that over here. So, you guys can see it’s an optical back. Net Revenue. That is that that net revenue, guys is when you subtract all of the revenue minus all of the costs. So, your net revenue here would be s three. OK, so equals s3. OK. So, this is what we’re making $2,885. So, for us to increase this 600%, we better get enough traffic, that we’re going to make more money. OK, if we don’t, why would you do it? Right? So, here, we ended up making $1,143. So, if you look here, I have projected net revenue delta, which means we just lost 1700 bucks from what we’re currently doing. So, when you’re doing that, it makes zero sense. What is that number projected net margin percentage? Which is ours, the doing your projected net? would be that net times the revenue. So, boom, right? That makes sense. So, now we’re making 67%. Which does in in any world, if you’re making 67%, net revenue, homerun, just keep doing that all day long, scale it, scale, just keep doing it. Right? It’s awesome. But when you’re making 90%, when you’re coming from making 90%, and you now increase the spend, and now you’ve just decreased it the 67%, right? The Delta, the delta, net margin percentage, is 90%. It’s that minus. Right? Alright. So, we just lost 23%. makes zero sense, right? makes zero sense for us. Now, we’re not in the business to take money away from ourselves, as much as we want to give our publishers more money, there’s got to be a reason why we do it, right. And the reason we’re going to do it is because the traffic is going to increase, and you’re going to get more. And by getting more, you’re willing to work on a lower margin. So, I still can pay 600% more on my traffic, but I better get a higher increase in my traffic, right? So, if it’s somebody that’s controlling it, right, someone’s sending emails for you, or maybe they’re putting you in their, in their flows, or on their site or somewhere, and you’re you’re all going the back. Well, come on, man. Like, the whole idea is that I’m getting more money to get more traffic, and you should want to get more traffic cuz I’m willing to pay you more. Right? I’m gonna pay you more to get more clicks. Now, like the Google example from earlier, right? Well, the PPC here, well, maybe it’s just not that exciting anyway, right? What happens if this guy was gonna pay $11? Now, I’m willing to pay 11 bucks. Right? Well, even if this guy was paying $11 Now the click rate was still so crappy, it’s still not going to work for him. This is still going to be more valuable. Right? So, and that’s scenario, right? We want to be able to get more traffic. So, we’re going to do this, it better go up. So, what’s the number we need to go to make this make sense? So, 20% 40% 50% Right? Well, look, we’re still net not making enough, right? And why are we doing this? Right? Let’s see. That should be that times 18 cents. That is correct. Right. So, what’s happening here is we’re getting more clicks, right? We’re still making 18 cents on that click on that impression to our page. Right? So, which gets us $4,789. But we’re spending $3,230. Right? So, we’re still, it just doesn’t make sense right now. So, we can’t afford that. Right? But maybe we can afford that. Right. So, in this scenario we’re looking at paying 300% more. Well, in that scenario, we still were getting 27,000 clicks. Because the thing is, we’re looking for the traffic to increase 50%. And this is, this is not like happening, because if you do that, then the partner is going to go, that’s what you need. You’re projecting here, you’re trying to figure out what you need. Right? So, you playing around with these numbers. So, if we increase it by doubling the amount of traffic that we get, well, here, we ended up making $4,789. Right? Because we got a 50% increase in traffic, right? 100% we doubled the amount we’re willing to pay a 50% increase in traffic. Got us now 27,366 clicks. Now, that equals the 4789. Right, which is two, this is this times that will equal that. Right? Now, the new spend here that we have is 122 bucks, right? So, that’s the 27,366 clicks, times the new cost per impression will we are willing to pay, right? Or to the publisher, to a Google to a Facebook to whomever where it’s a cost per click right? For them. It’s their revenue per click. I know I get it, it’s very, you know, you can get really confused with this. And that’s why I get it. But really, at the end of the day, all you’re looking at are these two numbers. What are you making on a click? What are you paying on a click? What are you making on an impression? What are you paying to get that impression? If you can simplify your business in that way that will take everything out of the equation that’s like, really confusing you to identify if the business is profitable or not.

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