This is a guest post by forum member Tom Fang of iPyxel Creations. His blog has some great tips and case studies on POF, and some free POF tools. Tom has written a great POF guide called the POF 7 Day Mastery Guide. He was kind enough to share his core POF principles with us.

Aff Playbook forum members get the guide FREE. Tom is an active poster who helps members out with their POF campaigns through advice, lessons, and case studies.

There are several fundamental philosophies that I approach POF with from which I do not waver from. Keeping these principles in mind at all times will help you visualize the end goal and work towards that picture painted in your mind. These are principles that have worked for me and that I think are optimal in implementing my system, but they are not the only ways of thinking. I encourage you to explore what might best fit your own work style if these principles do not make sense to you or are not congruent with the way you want to do things.

Core Principle #1: Everything needs to scale.

With anything that I decide to implement, I always, always think: “Is this scalable?” In my mind, there is no point in doing anything that is not scalable, since I am not interested in making an extra buck or two on any particular day; I want to build a cash printing machine. There is only a limited amount of time in my day, and I want to spend it on activities with the highest leverage.

When I say scalability, I do not mean with any particular campaign. I can give you a successful campaign and tell you to scale it to other countries, and you will probably be able to do that with some effort since it’s just replicating what’s already been done. Can you, however, repeat the production of other successful campaigns on a consistent basis? What I want to get you thinking about in scalability is in regards to processes. You want to build a system made up of as many routine tasks as possible.

3-Step Scaling Possibility Thought Process:

1. Finding something that works

E.g. amateur images work well on POF and you might find them browsing through a free stock image site).

2. Determining whether your success can be replicated

E.g. was finding amateur images on the stock site just a fluke for that one campaign, or can you consistently find amateur images on that site, or similar sites, for most, if not all, campaigns?

3. Determining whether the replication can be scaled

E.g. I can think of 2 ways on top of my head in scaling the image example. First, outsource the stock image searching job and pay a fixed price per image. Second, purchase amateur images in bulk from a paid stock site).

After thinking through steps 2 and 3, you can then determine that you are not wasting time finding images now since you will have a solution for images when the number of your campaigns grow a hundredfold.

Here is another simple example. When I first got into POF, I realized that there were so many fields that it took too long to upload a campaign. If there weren’t available technology out there nor could I develop anything on my own to automate this process, I would not have continued with POF as I would have never been able to build enough of a cash flow stream with it to warrant the time to be spent.

One example of something that is potentially unscalable may be promoting an offer where the advertiser closely monitors the quality of your leads, micromanages multiple narrow demographics for you to send leads from, and limits your leads per day in those demos. While the payout per lead might be high for this kind of offer, I do not bother with them because I don’t believe it is worth the time and energy put into it. When you discover something that works, think about if and how you can make it work a hundred times over!

Core Principle #2: Sustainability.

When building campaigns, I am only interested in building assets. I am interested in building long-term campaigns that provide sustainable cash flow and do not require much of my time in ongoing maintenance, even if it means that the campaign generates $5 a day instead of $50 a day.
This way, I have time to expand on top of what I already have, instead of using my time to constantly replace dying campaigns. It makes me feel better that the $5 is something I can depend upon for quite a while, and if I just do what I did 100 times more, it wouldn’t be too shabby now would it?

I have seen some campaigns that produce hundreds of dollars a day but the profit numbers are highly volatile from day to day and the campaign is only profitable for a month. Why does this happen? Most likely, it is due to what the industry refers to as burnout or banner-blindness, which simply means that your target audience has seen the same ads too many times in a short period of time, thereby deteriorating your once high-performing ads.

You can avoid this by limiting the exposure of your campaigns. By limiting the exposure of your ads per user and per session, your campaigns will be a lot less prone to burnout, leading to campaigns that last long periods, and at the end of the day, serving more impressions overall than letting the flood gates open day one. The specifics of how this is done are through the adjustment of login count, session depth, frequency cap, and targeting, which will be explained in Day 4.

Core Principle #3: Play the Odds.

Performance marketing is a game of statistics and probability. If you had perfect information and could collect ten million impressions of data for each ad, you would know exactly which ads were the best and only run those ads. The downside is that data costs time and money. Ten impressions is not enough data, and ten million impressionscost too much, so the key is to find the right balance of data and make a bet that you are comfortable with.

In the initial phases of testing and campaign optimization, your only goal is to purchase as much data for as little as possible; that is, your goal is to mitigate capital loss while gathering the required data for you to make an informed decision on your ads.

What is enough data? Well, I am not a statistician, so I cannot tell you whether a sampling of data for your particular targeting is statistically significant. I can, however, use common sense and think: “Well, if an ad has 10 clicks and 1 conversion, is the 10% conversion rate trustworthy? No. If an ad has 100 clicks, is a 10% conversion rate trustworthy then? A lot more so.”

After you have obtained some data for the ad, you can then determine whether to cut the ad or continue testing it. This is where the probability portion comes in. Since you don’t have infinite data, you are making a bet on the better performing ads with the limited amount of data that you do have. You want to cut the losses of poor performing ads up to this point and continue to purchase data for the better performing ones.

As an example, for a lot of my campaigns, I will cut an ad that has a CTR lower than 0.10% after 3,000 impressions unless it is at least break even. There will always be those who say a high CTR ad does not always equate to a high ROI ad. This is absolutely right. I have ads that have run millions of impressions at less than 0.06% CTR generating high ROI’s. However, CHANCES ARE that the ads with higher than 0.10% CTR will outperform those with less than 0.10% CTR. You are making a bet on the better performers at this point because purchasing more data costs money!

If additional data is needed and the data isn’t costing you money (i.e. the ad is break even or better), then continue to test and gather free data. In Day 5, I will provide you with some specific metrics that I use to determine how and when to cut ads. You can use that as a guideline, but remember that there are many ways to do it. Make your own bets based on the amount of data that you feel comfortable with.

The takeaway of this Core Principle, however, is that performance marketing is a game of numbers and data can be used as statistical evidence to project future performance.

Core Principle #4: Compartmentalize.

There is a myriad of targeting options available in POF. As if that wasn’t enough to worry about, there are the images, the copies, landing pages, CPM bidding, different offers, networks, and more. The amount of variables may seem daunting at first, and some people will try to incorporate all these factors at once by split testing them all at once and making sure every piece is “perfect” before launching a campaign. When the campaign is not profitable, they are not sure what went wrong.

Instead, you should focus on one thing at a time and compartmentalize the various pieces that will make the system work. A simple example of this is compartmentalizing the process of finding high performing ads. The indication of POF ad performance is CTR. If that is your goal, then stop worrying about what the ROI of the ads are in the meantime. Focus on the one thing at hand, which is getting the CTR’s up.

Control the other variables in the meantime and use what seems to work for other people and go with it for now. With country targeting, just target US to begin with. With the CPM bid, if people are saying $0.50 is a competitive bid for your targeting, then bid $0.57. Hold the other variables constant so you can isolate and learn how to get your high CTR’s.

Get on the forums and don’t be afraid to ask people for help! The point is not to post a follow-along in the forums with a -50% ROI and ask people why you’re losing money. Rather, you should be posting your images and your targeting and ask people for their opinion as to why you are not getting the CTR’s you should be getting.

The key take away of this Core Principle is to isolate your focus, so that once you have taken care of each compartment that you have drawn out for yourself, you know that the whole system is about to come together.

Core Principle #5: Know Your Competition.

This one is a no brainer. You have many competitors, and if you do better than them, then you will succeed. You must have realized by now that information is king in this industry. Therefore, you should spend time knowing exactly what else is out there competing with your ads. You need to do this in order to know what the current benchmark is and what current trends are, so that you have an idea of how to do BETTER. Monitor other ads to get ideas and learn from them. Of course, not all ads are profitable, but if they’re not, they probably won’t be there for long.

Keeping up with what is running beside your ads at all times and the sheer repetition of absorbing the different kinds of ads out there will give you a huge advantage over those who do not. There are a couple of ways to monitor your competition that will be explained in Day 2.

SETTING BUDGET AND COMMITTING TO A LOSS LIMIT

So, how much cash do you need to begin POF? In my opinion, you should be willing to invest a minimum $500-1,000 per month into this venture. If done right, most people that I have come across were able to become profitable within 3-4 months, which means you should be willing to commit $1,500-5,000 over that period of time in net loss. I have yet to see a fully committed marketer lose that much on POF and still not able to make money on there, but you might realize before that point that this is just not for you.

Can you do it for less? Yes, absolutely. I want to, however, give you my conservative estimate to broach the idea in your mind so that one month in, when you’re down $500, you don’t feel hopeless and want to quit. Too many times have I seen people quit after a few months after they are down a couple thousand dollars and decide that POF is not a profitable traffic source. That breaks my heart, since, to me, they are throwing away months of learning and experience and all the data and knowledge that they have purchased for that couple thousand. More often than not, people are a lot closer to profitability than they think, and they would see that if they were able to persevere for a few more months.

Of those who are successful on POF, they are making a bare minimum of $100 per day. A few thousand dollars of investment is, in my opinion, perfectly justified in providing you with a skill to generate the income you can attain in POF.

To mitigate some cash flow issues, you should charge everything through to a credit card. I would advise against American Express cards for POF since POF is a Canadian company, and your American Express will be charged a foreign transaction fee of about 1% on average. Plus, with the networks paying you a week, two weeks, or even over a month after you’ve earned your commissions, it’s highly beneficial to have more cash (and credit) to scale up your operations.

The capital you are committing is, nevertheless, an investment, and there is a chance that this just isn’t your thing. Therefore, there is a chance that you will not see that money again at the end of this, and you have to be able to accept that you made a calculated decision to invest your capital and your efforts and move on from there.

Setting Budget and Distribution Method in POF

In the beginning when you’re learning, you should be watching your campaigns very carefully anyway. As a failsafe, however, you should set a budget for your campaigns of $25-50. As for the option to “Distribute ASAP” or “Distribute Evenly”, I would suggest you sticking to “Distribute Evenly” for now.

Distribute ASAP means to show the ad as soon as there is a spot to show it based on what you target and bid. If there is a large amount of traffic for your targeting and you are bidding high, then it will go through your budget relatively quickly and stop getting impressions for the rest of the day. Distribute evenly means POF will try to spread your budget evenly over the course of the day.

There are two instances when you should shift to distribute ASAP. First, through experience, you may have a good idea as to when your campaigns do well during the day. You may want to start your campaign around that prime time and distribute ASAP so that the impressions you are paying for are the highest quality. That is a little too much micromanaging for me, but when you do not have that many campaigns to manage yet, it might be worth your while. Second, if you have a highly profitable campaign, and you want more traffic within the same targeting, then open up your budget and set to distribute ASAP for more traffic. This is one of the easy ways to scale a campaign up.

Once you are spending a substantial amount on POF on a daily basis, you would just stick to distribute ASAP.

Committing to a Loss Limit

Before you dive in, set a daily loss limit; I recommend $50 to begin with. On any given day, once you hit this number in net loss, you should pause all your campaigns and rerun them the next day. This is both important in framing a positive mindset going forward, since you are expecting to lose up to $50 a day, and in managing cash flow, so that you don’t burn through your capital too quickly and give up.

It is extremely unlikely that you will actually lose $50 every day. As a matter of fact, you might see yourself losing a lot less than $50 per day fairly quickly. Set this goal so that having a net loss in the first several months is just something that’s a part of the plan and that you are in an investment period to build yourself long term cash flow.

CHOOSING YOUR TARGETING AND OFFERS

In the beginning of your journey, you may decide that you want to run a particular offer and subsequently think about how to promote that offer. That way of thinking is perfectly okay. In contrast, I like to think about what targeting I want to monetize, find a few offers that might suit it the best, and pick the one I am most excited about.

I see POF as many streams of traffic available for me to monetize. My goal is to monetize as many of these streams as possible, starting with the path of least resistance. From my experience, as general rules, female traffic is more difficult than male traffic; older traffic is more difficult than younger traffic; and broad traffic is more difficult than niche traffic. For your first few rodeos, I would recommend you target the easier forms of traffic. An example of a targeting that I might pick might be: black females 18-30.

When picking an offer, choose one that people have already had success running; do not pick an obscure offer that few have heard of. Use your best judgment and ASK around! Ask your affiliate managers and on the forums. I don’t want to make recommendations as to what offers to run here because I do not want everyone who reads this to run the same offer. I would recommend going with dating offers, which is what I will cover in this guide. As you become successful on POF, you can and should test other verticals.

If you are targeting niche (e.g. people who are Jewish), there are usually two kinds of offers: one, a niche dating site (e.g. a dating site for Jews), or two, a generic offer (i.e. an offer that can be applied to most demographics). The niche dating offers can work great, and I have many that are generating consistent profits currently. However, I actually recommend that you try promoting niche with a generic offer first for 2 reasons:

1. The payouts for the niche offers can actually be lower than the generic offers, with no advantage over the generic offers’ conversion rates once optimized.

 

2. Many people are already running the niche offers for niche demographics. There are generic offers running in niche demographics too, but most of those campaigns are not targeted toward the niche; their ads just happen to appear since the niche demographic is part of a broader demographic.

If you go with my recommendation, however, you will NEED to throw up a landing page. There is a gap between the niche you are targeting and the generic offer. A landing page is needed to act as a message intermediary and sell the user to fill out the subsequent form. You will be making, editing and testing landing pages anyway, so I do not see this as a major obstacle. Day 6 will cover landing pages in more detail.

Lastly, pick a well-known network that pays weekly or bi-weekly to run the offer with. Don’t be nit-picky about the offer payout; you are in your learning phase. Once you’ve determined the targeting you are going to monetize and have the exact offer picked out, you are ready to start on the actual campaign stuff!

You can learn more about the POF 7 Day Mastery Guide here