The Im­por­tance Of Test­ing For CPS Af­fil­i­ate Marketers

Cost per Sale (CPS) mar­ket­ing is one of the tough­est af­fil­i­ate mar­ket­ing styles in the in­dus­try. How­ever, this can ac­tu­ally ben­e­fit smart, cre­ative mar­keters since much of the com­pe­ti­tion quickly gets weeded out.

It is im­por­tant to test the profit po­ten­tial of a par­tic­u­lar CPS af­fil­i­ate pro­gram be­fore you in­vest a sig­nif­i­cant amount of time and money into pro­mot­ing it.

Know­ing why and how you should test your CPS af­fil­i­ate of­fers will help you boost your con­ver­sion rates in both the short and the long term.

Why Should You Test as a CPS Af­fil­i­ate Marketer?

Ex­ten­sively pro­mot­ing a prod­uct that claims to have a high con­ver­sion with­out test­ing it first can lead to disaster.

First do your re­search; this will give you valu­able in­sights into the prod­uct, which can help make your pro­mo­tions more ef­fec­tive. Learn­ing what ads get at­ten­tion, what traf­fic leads to con­ver­sions and sim­ply how to spend your money to earn the high­est re­turn can make the dif­fer­ence be­tween earn­ing a healthy profit with this prod­uct and los­ing your shirt.

How to De­ter­mine Your Cost per Sale

Un­der a CPS sys­tem, you only get paid for the traf­fic you gen­er­ate for a busi­ness that ac­tu­ally leads to sales; the to­tal traf­fic, in­clud­ing all the in­di­vid­u­als that buy noth­ing, is ir­rel­e­vant as far as your in­come is con­cerned. Since gen­er­at­ing sales is quite a bit more dif­fi­cult than merely gen­er­at­ing traf­fic, busi­nesses will typ­i­cally pay much more to a qual­ity CPS af­fil­i­ate than they will to other types of affiliates.

Ba­si­cally, your job as a CPS mar­keter is to fo­cus on qual­ity leads rather than quantity.

How do you do this?

The an­swer is sim­ply to get very, very good at test­ing and research.

When do­ing your re­search, your goal is to an­swer these ques­tions as thor­oughly as possible.

• How long has this prod­uct been on the market?
• What is the sat­u­ra­tion of its niche?
• What is the to­tal price of the prod­uct, as well as your com­mis­sion ver­sus the con­ver­sion rate per month?
• What is the pro­jected long-term life of this prod­uct and its niche?
• Is this prod­uct or its niche de­pen­dent on the eco­nomic cli­mate of its cho­sen demographic?
• How many hours will you have to spend to pro­mote it up­front and long-term com­pared to how much in­come it will gen­er­ate monthly and an­nu­ally? Put in sim­pler terms, how much per hour will you make off your pro­mo­tional ef­forts for this product?
• How much is the to­tal start-up cost, in­clud­ing try­ing the prod­uct your­self if necessary?
• Do you get paid com­mis­sion on af­fil­i­ates who sign up un­der you for their sales?

What is the Ef­fect of Cal­cu­lat­ing Cost per Sale Af­fil­i­ate Income?

Fi­nally, you need to cal­cu­late the com­mis­sion rate be­fore test­ing and then pro­mot­ing a product.

Sup­pose that you have three com­pa­nies to choose from: A, B and C. Most would as­sume that the one with the high­est com­mis­sion rate is the best choice, but this may not nec­es­sar­ily be the case.

Con­sider this scenario:

• Mer­chant A of­fers $10 per sale
• Mer­chant B of­fers $30 per sale
• Mer­chant C of­fers 20 per­cent per sale

Mer­chant A con­verts five per­cent of its vis­i­tors. Out of 1,000 vis­i­tors, 50 will pur­chase, net­ting you $500.

Mer­chant B con­verts one per­cent of its vis­i­tors. Out of 1,000 vis­i­tors, only 10 will pur­chase, earn­ing you $300.

Mer­chant C sells prod­ucts at $500 or more apiece, with a con­ver­sa­tion rate of 0.5 per­cent. Out of 1,000 vis­i­tors, only five will pur­chase, but that could earn you $2,500 or more.

When look­ing at con­ver­sion rates, you should also check out the mar­ket his­tory for that prod­uct. Are sales in­creas­ing or de­creas­ing? Is this a prod­uct with re­peat sales, or one that will likely lead to fu­ture sales (such as a con­sum­able prod­uct)? Con­sider the sur­viv­abil­ity of the mar­ket and if an up­turn in the econ­omy will de­crease or in­crease sales and vice versa.

Do­ing your re­search be­fore­hand will lead to higher prof­its and less work in the long run. It will also re­duce the need to run af­ter more af­fil­i­ates, since you will only need to pro­mote a few well-con­vert­ing and high-earn­ing CPS af­fil­i­ates to reach your goals

By Fed­erico Einhorn

Founder and CEO at Full­Traf­fic. Pas­sion­ate about Search En­gine Mar­ket­ing and Op­ti­miza­tion, reg­u­lar writer for the Full­Traf­fic Blog. Since 2005, Full­Traf­fic has evolved to be­come one of the most im­por­tant Traf­fic providers world­wide for small to medium sized businesses.