Risk management via better ROI

Managing risk is a wise choice, whether you’re investing in stocks, real estate, affiliate marketing, bodybuilding supplements or fluffy-pink g-strings.

When there’s money involved, there’s generally risk that requires mitigation, in order to minimize the potential setbacks it could cause if shit hits the fan.

The best way to achieve that? Better ROI.

I’m not expert on risk management myself nor am I a qualified financial adviser, though, I do know a thing or two about general logic.

I can link this concept to weight-training just as much as I can to affiliate-marketing (or anything involving arbitrage for that matter.. especially when it involves dumping your hard earned pennies into something, in order to produce more.. pennies).

When you lift weights, you must warm-up before hitting the big-boys toys for some serious muscular-tissue damage in order to minimize the risk of injury.

Without hitting the big weights, you’re unlikely to bulk up and get the results you desire – but if you jump the gun, you’ll most likely injure yourself and put yourself out of the game for quite some time. See the relevance there?

Don’t jump the gun, you’ll hurt yourself.

With affiliate marketing, generally you start with an initial testing budget, test a lot of ideas out, tweak variables one at a time (A/B testing) and attempt to come to an educated conclusion on what works better. We’ve mostly established that – I mean,w ho knows if a red heading will perform better than a green one? Test it and find out!

We rinse and repeat this process until we are happy with the return on investment produced, cha-ching.

One must also be confident that the ROI is stable enough to withstand a larger investment. Ask yourself this question: will it perform the same if you throw 1,000 or 10,000 more clicks at the offer?

The fact is, nobody really knows and it can only become apparent through testing and constant monitoring. Hopefully with a bit of luck your traffic will be consistent enough to convert regularly. Then there’s the issue of scrubbing, one day you send the 1,500 clicks and get 200 leads, the next only 65. Same ads, Same traffic. But that’s a different bag of chips, lets not get into that.

It will always be a question mark that looms over affiliate marketers without the inside info, as to why your lead consistency fluctuates dramatically.

Did the world just suddenly become less desperate and less horny?

Did the advertiser get greedy?

Is the sky falling?

Perhaps all the of the above.

What we do know is that in order to be an effective and successful marketer, you have to monitor your progress often – especially in a volatile environment.

Useful Idea: Split your campaign up into manageable chunks, notably with demographic targeting, where possible.

Real World Example

Let’s use Plenty of Fish self-serve ads as an example.

Would you rather:

  • 1 campaign/group per offer targeting a broad audience, or
  • 20 small, demographically broken down campaigns for that offer?

I’d assume if you were wise, you’d pick the latter. This way you can pick and choose which demographic to keep, in a much more educated and manageable manner.

You can pick apart the demographic groups that convert, and not just click out of curiosity.

You’d be surprised how different 18-24 year old’s respond to your ads as opposed to those in the 25-29 age bracket.

My advice for PoF is to follow a naming structure that makes your sense and your sedentary life easier.

Here’s an example naming structure with our PoF campaigns that I use:


Type being an optional component.

If you’re doing 110×80 ads – I’d simply omit it.


If you run IAB ads also, it can can cause confusion and clutter amongst your ads, hence prefixing with the type. Either specify it with a symbol, a letter, or simply “IAB” as the type.

You’ll be able to manage your campaigns better – thank me later.

Now, take this advice, build some winners, kill off the losers, and most of all, manage that risk.

Note: if you are using Mr Green’s uploader, the character limit for titles is about 20-30 characters, so bare that in mind when naming your groups, otherwise you’ll bash your skull as much as I did trying to figure out why my ads wouldn’t upload.

– Andrew

If you’re looking for further Affiliate Marketing Guidance, check out StackThatMoney. Best community of experienced marketers from around the globe, exclusive meetups, follow along’s, tutorials and the knowledge of a thousand sun-gods.


Can’t Decide on Tracking Software?

I’ve recently switched over to a new tracking platform called Thrive by the guys over at iPyxel which I love. It’s still in development, but is constantly improving and making strides, and the best part about it can be self-hosted. The offer a 30-day trial and it’s $99 a month thereafter which is well worth the investment.

Those on a smaller budget can still opt to go the CPVLab route, another favorite of mine but a little more outdated. It is, however, more suitable for PPV traffic if that’s your traffic of choice.

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