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Old 06-26-2009, 01:25 AM
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I think it goes without question that the only way to make outsized profits or hit on big-earner campaigns in CPV is to discover unique target/offer combinations that no one else has thought of. You will only be picking up crumbs doing the super-obvious promotion of the latest X giftcard on X.com especially if this giftcard is all across the networks. Yet there is also a lot of space in the middle of these two extremes, where there are only 1 or 2 other people that have found the same profitable combination as well.

My tip is that in these situations, you should seek to share the profit rather than grab it all as long as the other bidders are willing to cooperate. There are many only slightly less than obvious opportunities that can be found where cost per impression is in the range of $0.01-$0.02 and revenue per impression is $0.05. If another bidder has found such an opportunity and is paying $0.015, and you outbid, then of course from a game theory perspective, if they are at all paying attention, they are going to outbid you or match you at least until the cost gets near the $0.05 amount of revenue per impression that they can expect.

If I stumble upon such an opportunity which has only one high bidder, I may just place a matching bid immediately, or if I feel there's a decent chance the other bidder might not respond, I may try outbidding, but only once. If the offer revenue is low (like it actually is a gift card), I would definitely just match from the beginning, since its important to preserve the margin. If someone outbids me, regardless of how we got there, I will almost always just match, and hope that the other bidder realizes that my matching bid is an offer to cooperate.

I've been applying this methodology for a while, and have found that about half the time people are willing to cooperate and simply match, and the other half they keep outbidding, even though I just match them each time. In these cases, the price rapidly escalates, and only the ad network profits. It's much better to get half of a large pie than try to get all of a rapidly shrinking pie, and I certainly am getting much more profit from the campaigns where the other bidder cooperated.

Of course if there are tons of bidders, this really doesn't work since there will always be someone that won't cooperate, but with 1 or 2 people, it often works. Note that on TrafficVance if there are 2 top bidders (they are matching bids), it will tell you that you are in position 2, but you will know that you are actually matching (and not being outbid) as long as the high bid price is the same as your bid price. I think TrafficVance deliberately does this to confuse people and provoke bidding wars.
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Old 06-28-2009, 05:29 PM
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Great post. It's a method I've been trying as well and have had some success with.
...an awful marketer.
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Old 06-29-2009, 02:09 AM
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I'm starting to do this. Let's see how it goes.
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Old 06-30-2009, 06:39 AM
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Good post!

Also been doing this for a while as it seems most people have figured it out.
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