Profit — is the net profit that a business or an individual receives after deducting all expenses. In everyday speech and business, this word refers to any money earned that remains after all costs have been paid.
In traffic arbitrage, profit — is the main metric of an advertising campaign's success. It is the money an affiliate marketer earns after paying for traffic and all related resources.
How profit is calculated
The formula is very simple: all expenses (Spend) are deducted from total revenue (Revenue).
For example: you launched an advertising campaign and spent $100 on it. The affiliate program paid you $150 for the customers you brought in. Your profit from this setup was $50.
The main mistake beginners make: confusing profit with revenue
Very often, beginner affiliate marketers (and sometimes sellers of questionable courses) boast about screenshots showing thousands of dollars in their affiliate account balances. This is revenue, but it says nothing about actual earnings.
If your affiliate account balance is $5,000, but you had to spend $5,500 on advertising, there is no profit at all. The campaign ran at a loss, and the affiliate marketer lost $500. The success of a setup is measured only by profit, not by impressive total revenue figures.
What expenses should be included
To calculate actual net profit, you need to deduct more than just the money spent on your advertising network balance. It is important to account for all other expenses without which the campaign could not have been launched:
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Resources: purchasing ad accounts, proxies, domains and virtual bank cards for paying for advertising.
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Services: subscription fees for trackers, antidetect browsers, spy services and automation services.
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Production: payments to designers for creatives, copywriters, translators (if you run traffic to foreign countries) or landing page developers.
Only after deducting all these expenses, which may not be obvious at first glance, does it become clear exactly how much money the advertising campaign generated.
