Offer Analysis

Offer Analysis

Evaluate affiliate offers for viability and profitability potential using proven media buyer frameworks.

The Offer Spectrum Concept (Casto)

Before analyzing any offer, understand where it falls on the Chad Spectrum:

Easy Offers (Chad Side)

• Work right out of the box
• Less dial-turning and optimization needed
• Creative really drives performance
• Broad targeting works well
• Can scale aggressively without bid/cost caps
• Example: New mass tort with large claimant pool, high arbitrage

Hard Offers (Technical Side)

• Require more work to create demand
• Need bid caps and cost caps
• More testing and iteration required
• Tighter margin management
• May need audience refinement
• Example: Mature evergreen offers with compressed margins

Key Insight: "The easier this is on the Chad spectrum, the less you have to turn the dials, the more the creative really just drives it with a good offer."

Mass Tort vs Evergreen Offer Dynamics

Mass Tort Characteristics

• Niche, short-term offers with high value
• Disproportional arbitrage - leads are super cheap initially
• Number of claimants is largest at launch - compresses over time
• New to market = largest opportunity window
• CPL naturally rises as claimant pool shrinks
• Conversion rate naturally drops over time
• Call center consistency affects disposition rates
• Revenue comes in 24-48 hours, with drip over 7-14 days

Evergreen Offer Characteristics

• Stable, long-term plays (auto insurance, Medicare, debt settlement)
• More predictable but tighter margins
• Higher competition, more saturated
• Requires sustained creative output to maintain performance
• Better for building consistent revenue base
• Network relationships become critical

Process

Step 1: Review Offer Details

Financial Metrics

• Payout amount and type (CPA, CPL, RevShare)
• Payment terms (Net 7, Net 15, Net 30)
• Payout caps (daily/weekly/monthly)
• Scrub rates (if known)
• Average conversion rate from network (critical for CPL offers)

Flow Analysis

• Traffic type accepted (Social, Native, Search, Email)
• Geo restrictions
• Device restrictions
• Funnel type (Direct link, Pre-sell required, Quiz)
• Disposition timeline - when do you know if leads convert?

Restrictions

• Creative restrictions
• Claim limitations
• Compliance requirements
• Brand bidding rules

Step 2: CPL and Conversion Rate Analysis

The Core Equation (Casto):

Average CPL × Average Conversion Rate = Average CPA
Average CPA vs Average Payout = Your Margin

CPL Benchmarks by Vertical:

Margin Analysis Framework:

• Healthy margin: 30%+ after all costs
• Acceptable margin: 15-30%
• Tight margin: 5-15% (need volume or backend)
• Danger zone: <5% (one bad day kills you)

Key Question: "I live and die by that margin. There's no backend for me." - Casto

Step 3: Assess Market Position

Market Timing Indicators:

• New offers appearing = growing opportunity
• Longtime players still active = sustainable vertical
• Many new entrants = possible saturation
• Declining payouts = maturing market

Competition Analysis:

• Who else is running this?
• Estimated spend in market
• Creative saturation level
• How long has offer been available?
• Are payouts compressing? (sign of maturity)

Market Size Assessment:

• Total addressable market
• Search volume for related terms
• Claimant pool size (for mass tort)
• Seasonality factors

Step 4: Identify Target Avatar

Demographics

• Age range
• Gender
• Income level
• Location

Psychographics

• Pain points (surface level AND deeper emotional drivers)
• Desires/goals
• Buying behavior
• Media consumption

Match Assessment

• Does avatar match your traffic sources?
• Can you reach this audience profitably?
• What bucket does Facebook put this audience in? (CPM pricing)

Step 5: Evaluate Creative Requirements

Content Needs

• Video vs static requirements
• UGC availability
• Stock footage availability
• Compliance-friendly angles

Production Effort

• Simple (existing templates)
• Moderate (new concepts needed)
• Complex (custom production)

Creative Volume Requirements (Based on Spectrum):

Step 6: Network Relationship Assessment

Network Quality Indicators:

• Payment reliability and terms
• Scrub rate transparency
• Real-time reporting availability
• Disposition feedback speed
• Account manager responsiveness

Relationship Building Questions:

• Is this network proven or new to you?
• Do you have leverage for better terms?
• Can you get exclusive offers or payouts?
• Will they work weekend leads? (critical for scaling)

Testing Budget Formulas

Casto's CPL Testing Framework

Minimum Test Spend per Creative Batch:

Minimum Test = Target CPL × 1.5-2x × Number of Ad Sets

Example:

• Target CPL: $20
• Creative concepts: 10 (each in own ad set)
• Minimum test: $20 × 1.5 × 10 = $300/day minimum

When to Pull Winners:

• Spending 1.5-2x target CPL with good margin = potential winner
• Test across 3-5 ad accounts before declaring winner
• Scale budget 20% increments (not aggressive jumps for lead gen)

Jason K's VSL Testing Framework

Initiate Checkout Method:

Test Budget = Target CPA × Number of Ad Sets

Example:

• Target CPA: $100
• Testing 12 avatars: 12 ad sets
• CBO budget: $1,000 with 5% minimum spend per ad set

Winner Criteria:

• A winner doesn't lose more than once in 3 days
• A winner doesn't lose more than twice in 7 days
• "Don't fall in love with an ad" - kill fast, don't hang on

Go/No-Go Decision Framework

GREEN LIGHT - GO if:

• Payout creates 20%+ margin at realistic CPL
• Market is growing or stable (not compressing)
• Avatar matches your existing traffic
• Creative requirements align with your capabilities
• Network has good reputation and payment terms
• You can afford 2-4 weeks of testing losses
• Offer falls on "easier" side of spectrum OR you have resources for hard offers

YELLOW LIGHT - CAUTION if:

• Margins are 10-20% (need volume to matter)
• Market is competitive but not saturated
• Need to develop new creative capabilities
• Network is new to you (start small)
• Offer requires cost caps/bid caps to work
• Disposition timeline is slow (>48 hours)

RED LIGHT - NO-GO if:

• Margins are <10% with no backend
• Market is clearly saturated/declining
• Avatar doesn't match any traffic you can buy
• Creative requirements exceed your budget
• Network has poor reputation
• Claimant pool is nearly exhausted (mass tort)
• Call center/intake quality is unknown or poor

Output Template

## OFFER ANALYSIS: [Offer Name]

### OFFER SNAPSHOT
- Network: [Name]
- Payout: $[Amount] / [Type]
- Flow: [Description]
- Geos: [Countries]
- Vertical: [Category]
- **Spectrum Position:** [Easy/Medium/Hard]
- **Offer Type:** [Mass Tort / Evergreen / Seasonal]

### CPL/CONVERSION ANALYSIS

| Metric | Target | Network Avg | Your Estimate |
|--------|--------|-------------|---------------|
| CPL | $[X] | $[X] | $[X] |
| Conv Rate | [X]% | [X]% | [X]% |
| CPA | $[X] | $[X] | $[X] |
| Payout | $[X] | - | - |
| **Margin** | [X]% | - | [X]% |

**Disposition Timeline:** [24hr / 48hr / 7-14 day drip]

### VIABILITY SCORES (1-10)

| Factor | Score | Notes |
|--------|-------|-------|
| Payout/Margin | X/10 | [Assessment] |
| Market Timing | X/10 | [Assessment] |
| Competition | X/10 | [Assessment] |
| Avatar Fit | X/10 | [Assessment] |
| Creative Ease | X/10 | [Assessment] |
| Network Quality | X/10 | [Assessment] |
| Spectrum Position | X/10 | [Easy = higher score] |
| **TOTAL** | XX/70 | |

### AVATAR PROFILE
- Who: [Description]
- Pain: [Key pain points]
- Desire: [Goals]
- Where: [How to reach them]
- CPM Bucket: [Expected pricing tier]

### CREATIVE STRATEGY
- Recommended angles: [List]
- Hook types to test: [List based on LeadsIcon framework]
- Production needs: [List]
- Weekly output target: [X creatives]

### TESTING BUDGET

**Phase 1: Initial Test (Week 1-2)**
| Item | Quantity | Cost | Total |
|------|----------|------|-------|
| Creative production | [#] | $[X] | $[X] |
| Ad spend (testing) | [days] | $[X]/day | $[X] |
| **Total Phase 1** | | | $[X] |

**Budget Formula Applied:**
- Target CPL: $[X]
- Test multiplier: [1.5x or 2x based on spectrum]
- Ad sets to test: [X]
- Daily minimum: $[X]

**Scale Readiness:**
- Break-even volume: [Leads/Sales per day]
- Scale budget if margin holds: $[X]/day
- Multiple ad accounts needed at: $[X]/day

### RISKS
1. [Risk 1 - e.g., "Claimant pool shrinking"]
2. [Risk 2 - e.g., "Call center weekend coverage unknown"]
3. [Risk 3 - e.g., "High creative saturation"]

### RECOMMENDATION
**[GO / CAUTION / NO-GO]**

Reasoning: [Explanation referencing spectrum position, margin analysis, and market timing]

### IF GO - NEXT STEPS
1. Secure network relationship and confirm disposition reporting
2. Set up tracking with CPL and conversion rate visibility
3. Produce first creative batch ([X] concepts × [X] variations)
4. Launch ABO testing with concepts in separate ad sets
5. Scale winners to CBO at 1.5-2x target CPL
6. Expand to multiple ad accounts at $[X]/day threshold

Evaluation Quick Reference

Green Flags:

• High payout with good conversion rates
• Large underserved market or new mass tort
• Clear avatar with reachable traffic
• Simple creative requirements (Chad spectrum)
• Good payment terms and disposition speed
• Network will work weekends

Red Flags:

• Extremely tight margins (<10%)
• Saturated market with declining payouts
• Complex compliance requirements
• Limited traffic sources accepted
• Poor network reputation or slow dispositions
• "I might not see reporting until the next day" scenario
• Claimant pool nearly exhausted

Spectrum Considerations:

• Easy offers = broad targeting, creative-driven, scale fast
• Hard offers = cost caps, bid caps, more testing, tighter management

Sources: Meta-CastovsJasonK, LeadsIcon-CreativeFlow, 8 Step Ideation