Consider the real-life example of an "Finnish angler" offer.
CR - 2.42%
Approve - 40%
Deduction - $ 9
CR - this is the conversion rate. Using this indicator, you can find out what percentage of users completed a target action - in this case, a purchase. CR for Finnish boots - 2.42%, which means that for every 100 people around 2 will order.
Percentage - this is an indicator of the number of people who have finally validated the app.
But these are average data. There are some publishers running through the API and some publishers running ads directly on the landing
Now, starting from the lead, I can run the campaign and break even.
offer * approve = lead
9 * 0.40 = 3.6 $. If the lead price is lower than this - then you will get a profit. If you are higher - you will not be profitable.
In any affiliate program for any offer, there are junk orders. It is possible that the customer does not want to confirm the application by phone call or intentionally gives an incorrect phone number. Garbage orders are not included in the approve percentage. A approve rating of 40% means that 60% of users reject orders, while 40% agree.
It is impossible to know in advance what percentage of your traffic is spam, as this is a very unique indicator and it will only be evident in the tests.
On average, the trash rate for all offers is 30%, so. The formula to calculate the price of the lead, where you would work in harmony with garbage, would look like this:
Pay offer * approve / (100% + 30%) = lead price (same rubbish).
9 * 0.40 / 1.3 = 2.7 $. If the lead price is lower than this - then you won't make any profit. If higher - you will be profitable.
Knowing the lead price in advance, you can understand how long it takes to pause the advertising campaign. To do this, use the following formulas:
You spent $ 6 on an ad group and got 0 leads.
2.7 + (2.7 * 1.5) = 6.75
You can then run the ad campaign. Sometimes you spend 6.75 and don't get a lead, but until you get $ 8, you get 3 leads.
You spent $ 9 on the ad group and got 0 leads. From the calculations in the previous situation, you have exceeded the amount of money spent on ad groups without leads. So stop advertising.
You spent $ 8 and got 1 lead. As we have calculated from the beginning the amount that is worth advertising off - $ 6.75. To know whether or not to continue running the ad, you must calculate:
QC cost - lead price (with garbage)
8-2.7 = 5.3 $
$ 5.3 less than 6.75 means that you have to pause the campaign.
That is the indicator that the publisher brags to each other.
ROI - this is the rate of return. It shows the profit or loss of your campaign.
If ROI = 100% - you break even.
If your ROI is> 100% - you are profitable.
If your ROI is <100% - it means you are losing money.
ROI = (cost - income) / cost * 100
For example, you spent $ 62 on advertising, and earned $ 86.
ROI = 86/62 * 100 = 138.7%
That means your campaign is profitable.
If you're a publisher - you can count yourself as a businessman. Making money in CPA - not as easy as in 2015.
In order to achieve success you must devise a competent working strategy and analyze advertising campaigns. The formulas from this article will only help calculate everything and increase your profit opportunities.