Offer Analysis Walkerhi11 Mediabuy Plugins

---
name: offer-analysis
description: Analyze an affiliate offer for viability including payout, flow, restrictions, market size, target avatar, and creative requirements. Use when evaluating whether to run a new offer, comparing offers, or assessing offer-market fit. Incorporates Casto's offer spectrum concept, CPL/conversion analysis, and go/no-go decision frameworks.
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# 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:**
| Vertical | Typical CPL Range | Expected Conv Rate | Target CPA |
|----------|-------------------|-------------------|------------|
| Mass Tort (New) | $5-25 | 15-40% | Variable |
| Mass Tort (Mature) | $25-75 | 5-15% | Compressed |
| Auto Insurance | $8-20 | 10-25% | $40-100 |
| Medicare | $15-40 | 8-20% | $75-200 |
| Debt Settlement | $20-50 | 5-15% | $150-400 |
| Solar | $30-80 | 3-10% | $300-800 |

**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):**
| Offer Type | Weekly Creative Output | Test Budget per Batch |
|------------|----------------------|----------------------|
| Easy/Chad | 25-50 creatives | 1x target CPL |
| Medium | 50-100 creatives | 1.5x target CPL |
| Hard/Technical | 100+ creatives | 2x target CPL |

### 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
```

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## 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

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