The Balancing Act
The hardest part about running a traffic exchange is the constant balancing act of delivery. A good owner will pay attention and play the game, while unfortunately others will ignore it untill it’s too late.
What am I talking about? Surf Ratios, Bonuses, Prizes, Sales, Credit Flow
Most new users to traffic exchanges think that credits are unlimited. I can just add them to your account right? Yes, but then I have to deliver. If I don’t deliver, those credits are worthless.
If you got a coupon for a free pizza, but when it came time to claim it you didn’t get a pizza for a few months, what good is it when you’re hungry now? Same concept here!
So how does credit delivery and inventory work? Well it’s OK to have some “inventory”. By inventory I mean credits in accounts. Inventory is NOT what you CAN give out, but what you HAVE to give out. It’s kind of opposite thinking. With physical goods inventory is what you have left, with this it’s what I owe.
The reason you want inventory is to have a variety of sites for viewing. If there was no inventory, there would be no sites to view, or just the same one over and over. Boring!
But too much inventory and everyone wonders why traffic isn’t being delivered, and then begin to think why bother surfing if it’ll never get delivered.
Then there is this whole expectation for a 1:1 ratio. I’m always told about how this exchange or that exchange gives 1 credit for every page viewed. Heads up, does 1 credit = 1 hit? If not, then you aren’t comparing properly to mine! Some exchanges 1 hit requires 10 or more credits!
So what happens when you are surfing a real 1:1 ratio, where you get 1 hit for every page viewed? Well it increases the inventory with every page view! What most members forget is that they get credits for their referrals surfing, and their referer gets credits for them surfing.
So you surf 100 pages, get 100 hits, and think it was just swapped right? Yeah, but your referer also got 10 hits out of that deal. Wait a minute 100 pages viewed is less than 110 hits, where’d that other 10 come from? Oh wait, no those are “IOU”s (I owe you). It’s increased inventory.
When everyone gets that same 1:1 ratio, then there is nobody to view those extra 10 pages. Then it builds, ever so slowly. So much that most people don’t notice it until it’s too late. Then the too much inventory problem comes up and it snowballs out of control.
The problem is increased every time a new exchange comes up with 0 inventory, they can afford to give out a ton of credits at the beginning because they have no sites in rotation. So then everyone expects those same bonuses at new exchanges (or more, they are bigger right so they should give out MORE!!)
Anyways – all this is to say, at StartXchange I can promise you I’ll give out as much traffic per click as possible but I’m not going to give out too much and have my exchange die a slow and fatal death. That’s how you last 8 years when others don’t ;-)
Tim,
Thanks for full disclosure. Your tips and tools have helped me since 2002.
Arlen
Thanks for the advice Tim I am a new TE owner and I am looking forward to a long and prosperous future in the industry so keep the tips coming Thanks.
Wow. I truly do learn something new every day! Thanks for contributing to my education.
Cat
amazing thats something that don’t occur to many surfers,i reckon. ta for the heads up.
I am a member of some TEs that don’t understand the problem you have mentioned. I have even told one owner that he gives out too many bonuses. For example: 185, 74 and 112 bonus credits during ONE surfing session of me surfing less than 50 sites. That is ridiculous. While I appreciate credits . . . these are worthless. In 3 months my sites were seen less than 10 times. Gee, I wonder why. He even gives out 500, 1000 or so for admin bribes to join his programs. This one is the worse, but I have others that come close to this. And they wonder why no one is surfing.
Tim, keep up the great work at StartXchange. Thanks.
Tim all of this is still quite confusing to me although I am sure you have given a very thorough explanation of how the credit system works in Traffic Exchanges! Basically I surf for credits and page views. A hit, I guess is what a page view is considered?! (Maybe?) Not really sure about that…LOL!! Maybe if you keep saying it, it will one day sink in…sorta like algebra…LOL!
Happy birthday USA!!
Wow! today’s July 4th! I think you should write an entry about something that has to do with the 4th of July!
I’m visiting my cousin, so I’m going to watch the fireworks somewhere that I never have before!
Keep poting entries!
Thank you Tim, I wish every TE owner would explain things that way.
Denise
This was some really good advice, Tim. Thanks.
Nice post TIM, I will review some confs in my TE to do not fall into this snowball.
Great Blog, Tim…
Needs to be put in the forum!
God Bless America
233 Years Young Today!
Blows my mind too. How can someone give 1000 credits to join a new TE….Have a 1:1 surf ratio and expect things to run….They can’t. It’s mathematically impossible UNLESS the owner is cheating you and doing things to lower their inventory.
There are lots of shady practices, so the best bet is to go with exchange with little to no sign up bonuses, a 2:1, 3:1 or lower surf ratio for free members, and a general good feel and look to the site…
The math is very simple, you cannot give out more than people are earning by surfing.
Tim,
Moral of the story. Stick with the tried and true TE’s.
Those that have been around for a long time do know what they are doing.
Those that do not Fade into obscurity.
Les
Les Stevenss lastest blog post..Push Button Extreme
Excellent advice, as always
Thanks Tim
yes very true this is what I’m telling with some other owners that gives out credits like crazy I just can’t explain it the way you do :P
Take a peek,
http://www.virtualtraffic.org
tatakattes lastest blog post..Sister Contest
trafficattheraces just had a monster bonus session. And my credits flew. Biggest complain from TE users: My credits are used up too fast. Second Biggest complaint from TE users: Mt credits are not used up fast enough!
Can’t win. Seriously, there is a difference between 10 credits a day and 10 credits in 3 months. 10 credits a day being used may be worth surfing a few minutes a week. Not so for the 10 credits in 3 months. You can’t surf everything. I think another thing in this mix is you need to have both slow and fast moving TEs in your arsenal. And there are TEs that I would never upgrade or buy as credits are used up in the blink of an eye. That’s a waste. Goes back to my 10 credits a day. I’d rather have 10 credits a day used, then 10,000 in 10 minutes. Every time I did the latter, it was for nothing. I learned my lesson. I have herd that complaint a lot as well. That’s why I do believe strongly that small exchanges have their place. Just not first place.
i never really looked at it that way. really eye opening. i own a traffic exchange and i am about to rethink some things thanks tim your awesome.
Well said, Tim!
I hate exchanges where the credits don’t move.
John
Thanks for that advice I’m in the process of having my first TE designed so I’ll be following your sensible advice a bit closer from now on. Keep up the good work.
Your blog post is very thought provoking, however, explain to me the difference in getting free credits as a bonus and purchasing a credit package, lets say 1000 credits and using a 100% coupon and getting an extra 1000. The concept behind buying credit packages is so it frees up your time so you don’t have to surf. So if you buy the 1000 credit package and use your 100% coupon, you end up with 2000 credits that you didn’t have to surf for, doesn’t that throw off the balance also? You may not like the idea of giving lots of credits as a bonus, but I sure like getting them free rather than paying for them. Just my 2 cents worth.
The difference is made up by the surf ratios.
For example, if I do a HENry Hour at I Love Hits, I usually double the purchase for customers. So they get 2800 instead of 1400…
However, my exchange ‘banks’ about 30,000 credits a day…Meaning more people get sites seen then the entire surf membership earns…
So I have 30,000 credits I can ’sell’ every day without getting into debt.
When an exchange is in ‘debt’ with surf views (credits), the traffic doesn’t get delivered.
This affects the inventory just the same. But remember having inventory isn’t bad, you just have to have the right balance.
As for the coupon, it requires a purchase. Not everyone can purchase so every coupon given out isn’t a guaranteed hit on the inventory.
But – if the inventory is too high, you’ll see those coupons not being given out, and in extreme cases I’ll stop selling ad packages completely. Yes, I take a hit on my income but that’s what I get for not managing the inventory!
Hi Tim,
I think you meant … “So then everyone expects those same bonuses at older exchanges.”
It is as you say a balancing act.
Although most people may think that the number of credits on active sites is the most important way of seeing how healthy your traffic exchange is, I find that by checking the URLs surfed is a better method.
As Jon says, he knows his Ilovehits TE uses up 30,000 credits per day, so then he either has to sell them or give them away with bonuses, and of course reducing those bonuses again brings them back down.
On Clicksmatrix I like to check sites surfed list, which not only shows the number of site surfed but the number of hits each site a) has received today and b) how many credits are left on that site.
I can tell at a glance if the site is gaining more credits simply by looking at the number of sites that have received hits with more than 100 credits left on them, if this figure starts to go up every day I know I have to increase my Mystery Credit wins or increase paid membership of credit sales and if they go down to far I know we are basically running our of credits.
Of course the active sites report is useful as well, it not only sohws how many active sites have credits and sets them out in ranges, but it also saves daily totals and lists them below the main report, going back 4 years.
I well remember reading in NMF back in 2006 how Jon kept on surfing us out after 60 or so sites and wondering what was wrong and how to fix it, boy I have learned a lot since them.
One of the most important changes I have made was to stop the surfbar that gave only entries into the weekly surf cash prize draw, as this was uses massive amounts of credits up, with every rotation at 1: 0.5 surf ratios you would lose half your credits, with ZERO surf ratio – well you can imagine.
The weekly small cash prize draw is now just a bonus ticket on the main surfbar, it is not a biggie, it costs us about $20 per week and gives a few members a prize, most of which is used up for internal credit purchases and upgrades anyway, so its just a small help for members.
So if you are seeing the same 50 sites on a traffic exchange, do the webmaster a favour by submitting a support ticket and asking him to check out his reports as the TE is running out of credits on active sites.
Best Regards,
Stephen Sartain
Webmaster
Clicksmatrix.com
Cashclicking.com
Another thing worth mentioning is that running out of sites to view is often the sign of a busy traffic exchange.
I disagree – it’s a sign the owner doesn’t know how to balance the inventory. Going in either direction too far can kill an exchange, and it’s the responsibility of the owner to keep the balance ;-)
Well thats true, but the fact remains it can be the sign of a busy traffic exchange.
Perhaps I should of added to that last comment by pointing out the blooming obvious, that the TE Webmaster is not aware of the problem and probably needs a bit of advice, as he doesnt’t know how to balance his exchanges credits.
I agree with your overall view on blancing credits, but feel that Blogs such as this are useful in educating exchange owners to the dangers of not maintaining a balance.
I can understand the feeling of new TE Webmasters, wanting more members and activity, that perhaps a great marketing ploy would be to add more join and surfing bonuses, but perhaps more advertising would be a better long term solution.
An excellent reminder Tim.
I have often advised new TE owners against giving away so many credits, since they feel more credits is a GOOD thing :(
Some learn in time, but many do not.
DeHawkinz
DeHawkinz,
Its not their fault, its simply frustration and desire to succeed.
Which TEs have you advised and did they take your advice?
Regards,
Steve.
Webmaster
Clicksmatrix.com
Cashclicking.com
So Tim, i understand what you are saying. Here is my question if an exchange falls into this situation how can they get out of it? Waiting on your response….
Thanks,
John
Look at the users with the largest # of credits, and offer to buy them from them. Also, reduce your bonuses and ratio considerably otherwise it’ll continue to happen.
Tim, can i send you another quest thru either email or support
Cancel last message i will ask in here no worries…. do you have any idea what to pay members for credits and also if i have accounts that are 1/2and 1/3 ratio shoould i dump them and take the chance of losing the members?
That is wonderful advise to take to heart. I have seen this on a ton of traffic sites and you are absolutly correct.
There is one more thing I would like to add to your comment. The thing with traffic exchange owners giving away their top upgrades in place of a top upgrade with another site owner. It highly relates to what you are saying here. After a while those owners find themselves in a circle with all the same members and relationships with only site owners, after that time they usually end up failing in their business because they find that their circle is taking them no where.
Tim, Keep up the great work. People are listening to you.
Thanks,
Sjclark