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Old 08-12-2010, 04:36 PM
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Default Bidding Wars -- What not to do...

I think you might find the following story interesting.

It may give you some insights into some of the things I do for bidding -- and some of the things not to do.

I use my own landing pages for most of my campaigns, although every once in a while, I do find that direct linking jewel of an offer that makes some good coin.

Earlier this year, I had a great direct linking campaign running that related to a seasonal offer. I had a good couple of months to run with the offer.

I was able to get lots of traffic to the offer and the competition was very minimal, so my cost was around .01-.012 cpv on TrafficVance.

My daily cost was $15 for the traffic and I was making around $350 in profit - per day. I was loving life!

At times, I was getting conversions in the area of 1 conversion per 40 impressions -- which is truly amazing for a direct linking campaign which paid a sizable commission.

I was making this type of daily profit for about 2 weeks and then someone else caught on to what I was doing.

My bids started getting jacked because of the new competition, so I matched/outdid their bidding and kept holding on to that number 1 spot.

Bids started rising and pretty soon we were at .06 cpv, then .08 cpv and then .10 cpv -- back and forth it went, as each of us was trying to hold down that #1 spot.

After a few days of this, I said, "**** with it!" and thought I'd drive out that other bidder.

So I outbid the other bidder by a margin of 10 cents and put my bids at .24 cpv (which turned out to be a stupid move, more about that in a moment).

This seemed to raise some attention and another bidder got into the game. So now 3 of us were bidding for the #1 spot around .24 cpv.

So I did it again... I raised my bid to .30 cpv. The other two bidders matched.

Pretty soon we were all around .34 cpv and I wasn't making nothing.

I thought I could outlast the other bidders, but no one budged and the bidding stayed at .34-.37 cpv.

After a few days of this, I took the first move and lowered my bid back to .20 cpv. It took a couple of days, but the other bidders did the same.

Then I took my bid down to .10 cpv. And the others followed after some time passed.

The bidding then hovered in the area of .10-.12 cpv.

It never went down to the .01-.012 that I previously enjoyed, but at .10-.12 cpv, some money was to be made (and shared).

The season ended and so did that campaign. I came out well overall.

Next year, I'll do it all over again, except I'm not going to drive out the other bidders -- it just didn't work.

Lessons learned:

1. Sometimes you have to share the top spot, if you think you'll drive out the other bidders by outlasting them, you might but sometimes they're thinking the same thing about driving you out.

2. Don't try to jump up bids quickly by creating a huge gap from #1 to #2 rank. Sometimes it can work, sometimes not. There's an inelasticity towards driving bids downward once they've gone up -- so once each day, try to bid low and not be #1, and the other bids might come down. Then try to grab #1 or tie for #1 for the remainder of the day. There has to be some give-and-take, otherwise bidding will continually rise without dropping (until someone gets out).

3. There are some good direct linking campaigns, but don't become dependent on only those offers. Make your own landing pages and your campaigns will have more longevity, especially if you collect an email (which is something I need to be better at).

4. Don't get angry... be as emotionally unattached as possible and rely on your stats for your decision making. If you need to bid higher, then do so. If your stats tell you that you need to lower your bids, then do so. Just keep emotion out of it and run as many campaigns as you can afford. I always have lots of campaigns running at any given time.

Overall, it was a fun ride and a learning experience.

I can't wait to do it again next year!

-Aaron
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