12 Biggest Newbie Mistakes You Can Avoid (Part 2)
(Continuing from Part 1…)
Mistake #7: Maximizing ROI Instead of Profits
200% ROI may sound impressive – until you reveal that you’re spending $1/day to make $3.
30% ROI may not sound like a lot – but if you’re spending $1000 to make $1300, that wouldn’t be too shabby at all!
The differentiation is especially important in cases where you need to sacrifice ROI to maximize profits.
For example, when you increase frequency cap, the ROI tends to drop, but there’s a chance for the extra traffic to result in increased profits.
Or, when you bid higher to get more traffic or target less-profitable traffic, just to do enough conversions to get that next pay bump.
The exception to this is if you’re running out of cash – in that case, you WILL want to maximize ROI instead of profits.
Recommended To-Do: Aim to maximize profits instead of ROI, UNLESS cashflow is becoming an issue. Also, avoid running camps that don’t have sufficient profits potential in the first place, for example a traffic source that doesn’t have much traffic for your target geo.
EDIT: Matuloo has written a post to discuss this topic in great detail: http://stmforum.com/forum/showthread.php?33685-High-ROI-is-awesome-but-it-s-more-important-to-focus-on-PROFIT-instead-Why-is-that
Mistake #8: Not Minding the 8 ...