Fiksu: Don't spend on marketing if you're not ready for losses

Interesting material has appeared in the blog of the analytical company Fiksu. In it, Chris Shuptrine, the company’s director of new markets, talked about why so much money should be spent on marketing. Of course, we could not pass by such an article and offer its Russian version.

A common mistake of many marketers when testing a new advertising grid is the termination of cooperation with it when receiving the first results, which, as a rule, are far from ideal. It is clear that people are worried about the CPI covering the cost of attracting users, but if unoptimized mobile traffic were effective, there would not be a high threshold for entering the market. 

Chris ShaptrainSo why is it a mistake to abandon an advertising campaign at an early stage?

Because you need to optimize the data, and the data itself takes time and money to collect. The first numbers, in turn, are always almost so-so. And it takes patience and readiness for losses in order to achieve stable and necessary figures. 

The million dollar question is how much money do you have to spend before you realize it’s time to leave?

Let’s take Fiksu traffic as an example. We work with 80 grids, each of which has its own publishers, users, targeting capabilities. In order to test the relative performance of each platform or at least 50 of them, you need to spend at least $1,000 on each. The total figure rises to the level of $ 50 thousand. This figure is much higher than the amount generally accepted for “training”.

But $1000 is not enough for each grid. For example, according to Fiksu, Adwords has more than 20 thousand partners worthy of attention. Divide $1000 by 20,000 – and we get $ 0.05 (or one click) on the site. That’s not enough. Moreover, it is not enough even for data collection. To stop at this stage is like going around the world with money for a couple of liters of gasoline.

And now let’s remember that different projects need a different number of clicks for “testing”. But, on average, the benchmark requires 500 clicks. And now we are looking at how much it will take the publisher to simply collect data from Adwords alone:

20 thousand partners x 500 clicks x $0.11 (average click) = $1.1 million.

And this is even without taking into account variables like country, day of the week, city, gender… In general, everything together pulls in billions of dollars.

Does this mean that you need to spend such amounts on marketing? No, but it is necessary to understand that even a five-digit sum can be nothing more than statistical noise. Without remembering this, you can easily stop the campaign long before it gives any real result.

Therefore, if you are not ready for long-term marketing campaigns, it is better not to start. 

A source: http://www.fiksu.com