DATA FROM A REAL CAMPAIGN SPEND: ~$35,000/MONTH Month 1 Month 2 Month 3 Ad Groups 634 225 45% Ad Groups w/ Trafﬁc 28% 89% 100%% Proﬁtable Ad Groups 4% 12% 80% Net Proﬁt/Loss -$26,300 -$17,201 $7,829
HOW DO YOU SCALE 100X FROM $50/DAY TO $5,000/DAY?
PAID TRAFFIC IN 2012• Highly fragmented (resistance to consolidation)• Very inefﬁcient (misaligned incentives)• Not a free market (price manipulation by everyone)
THE KEY TO HACKING THE MARKET• Arbitrage low value trafﬁc into high value trafﬁc• Get it cheaper OR monetize better• New business models help (ex. Zynga, Zoosk, ZocDoc)
ASSUMPTIONS• Some trafﬁc is underpriced (inefﬁciency)• Diverse trafﬁc sources bring diverse results (fragmentation)• Big wins will pay for failures (power law)
ACTIONS• Find cheap, scalable trafﬁc sources(but not too cheap!)• Test faster than the competition• Many small experiments rather than few big ones• Track everything!
GOOD TRAFFIC SOURCES FOR STARTUPS• Self-serve platforms (Google, AdCenter, Facebook)• Transparent ad networks and exchanges• Direct media buys on smaller sites• Low cost/no cost partnerships• Fast build->track->iterate loop• Jump start organic channels(ex. StumbleUpon,TapJoy)
BAD TRAFFIC SOURCES FOR STARTUPS• Competing with brand advertisers• Any site with a media kit• Any site with a sales team• Anyone who will “optimize for you”• Big commitments
HOW TO SCALE FAST1.Test many diverse audiences and trafﬁc sources quickly2.Focus on the ones that show promise3.Track everything and never stop optimizing