In affiliate marketing, creatives earn the click — that part is obvious. However, it’s the bid that decides whether the campaign is scalable and profitable.
A bid isn’t just a price tag. It’s a control mechanism. Bid too low, and you simply won’t win enough auctions to buy meaningful volume or gather data. Bid too high without a strategy, and costs rise faster than performance. The goal is finding the bid level that lets you enter the auction, collect signals and adjust with intent.
Smart bidding is a balancing act: paying enough to compete, but not more than the data justifies.
For years, we only had one option: manual control. You picked a price, checked your tracker a few times a week and adjusted. Even though it was slow, it was safe. Today, the choice between keeping that manual grip or letting dynamic bidding algorithms handle the auction in real-time is up to you.
Here is the thing, though: the smartest tech isn't always the right choice. It depends entirely on your data. Are you starting from scratch, or are you scaling a winner? Understanding your campaign is paramount to your success because if you pick the wrong strategy for your stage, you may just crush your margins.
What Is Fixed Bidding?
First, let’s strip away the jargon. Fixed bidding is exactly what it sounds like. You pick a number — say, $0.50 per click — and you tell the ad network: "I am willing to pay this much, and not a penny more."
There is no magic happening in the background. The algorithm doesn't get to think. It doesn't care if it's 3 AM or 3 PM. It doesn't analyze if the user is on a high-end iPhone or an old Android device. It just looks at your hard cap. If the auction price is below your limit, you participate. If it’s above, you sit out.
In a complex ecosystem like native advertising, this might sound outdated. Why choose a fixed bid when AI exists? Because it’s predictable.
When you use fixed bidding, you force the traffic source to adhere to your math. You aren't letting a machine spend your budget based on what it thinks is a good conversion probability. You are paying a flat rate for access. This creates a controlled environment, which is why many senior media buyers still refuse to launch new campaigns on anything else. They want to see the baseline performance of the traffic before they let an algorithm take the wheel.
Pros and Cons of Fixed Bidding for Affiliates
Why would anyone choose manual work over automation? It usually comes down to one word: Control. However, control comes at a price.
Let's break down why fixed bidding is still the default for many veteran affiliates, and where it falls short.
The Advantages: Consistency and Control
- Establishing a Baseline: When launching a new campaign, you need to isolate variables. By keeping the bid constant, you ensure that any fluctuation in performance is due to the creative or the landing page, not a changing cost-per-click. This provides a stable environment for initial A/B testing.
- Strict Cost Limits: Fixed bidding enforces a rigid cap on your spend per click. The system will never bid above your set amount, regardless of the conversion probability. This allows for precise calculation of your runway, ensuring you adhere strictly to your planned budget models.
- Manual Intervention: This strategy allows for direct management of specific placements. If you determine that a specific Site ID is underperforming, you can manually adjust the bid or block it entirely based on your own analysis.
- Volume-Focused Advertising: Works for advertisers who don’t really have a target CPA and aim for volume and awareness instead of conversions. Now all of the algos are built for that type of audience.
- Skill Development: Better understanding of tools and manual optimization skills development. Each and every platform is different, fixed bidding enhances manual optimization skills of an advertiser who controls the campaigns.
The Limitations: The "Ceiling" Problem
- You Miss Premium Traffic: This is the biggest hidden cost. Imagine a user who is perfect for your offer: high intent, right device and ready to buy. The drawback? They are expensive. If your fixed bid is capped at $0.50 and the auction for that user closes at $0.55, you lose. With fixed bidding, you risk effectively filtering out the highest-quality segment of the audience because you refused to pay the market rate for it.
- Speed of Reaction: Auctions change every second. Competitors enter and leave. If a competitor suddenly drops out and traffic becomes cheaper, you are still overpaying with your fixed bid. If competition spikes, you stop getting traffic entirely. You simply can't react as fast as a script.
- Manual Fatigue: Scaling is painful. Managing bids for 500 different placements manually transforms from strategy to data entry. It eats up time that you could be spending on creative strategy or finding new offers.
- Opaque Algorithms: Algos are built to predict conversions instead of clicks, users can’t reach that data manually.
- Competitive Disadvantage: Competition with those who do use algos can be hard.
What Is Dynamic Bidding?
If fixed bidding is a blunt instrument, dynamic bidding is a scalpel.
So, what is dynamic bidding exactly? In simple terms, it is a strategy where you give the platform permission to adjust your bid for every single auction based on the likelihood of a conversion.
In essence, you are saying: "I am willing to pay $10 for a lead so go ahead and bid as much as needed to hit that target, I am ok to pay more for a higher conversion chance and ok to try our cheaper traffic and check." Dynamic bidding shifts the focus from buying clicks to buying probabilities.
Modern ad platforms use machine learning to analyze thousands of signals in real-time — things a human simply can't process fast enough. They look at the time of day, the specific device model, the operating system version, the user’s connection type and even the historical performance of the specific widget where the ad is about to appear.
Then, the algorithm calculates a conversion probability. If the probability is high, it bids aggressively to win the impression. If it’s low, it saves your budget. It’s automated arbitrage, happening in milliseconds.
Pros and Cons of Dynamic Bidding for Affiliates
Handing over the keys to an algorithm may sound risky, but when it works, it outperforms any human buyer. The speed at which a machine learns is simply unmatched.
The Advantages: Speed and Efficiency
- Real-Time Valuation: The biggest advantage is that you stop overpaying for irrelevant traffic and start fighting properly for quality. The algorithm knows that a click from Site A at 2 PM is worth $0.80, while the same user on Site B at 4 AM is only worth $0.10. It adjusts instantly.
- Freedom from Micro-Management: This is where tools like MGID’s CPA Tune shine. You simply define your Target CPA, and the AI takes over. Instead of you manually adjusting bids for thousands of individual Site IDs every morning, the algorithm automatically calculates the precise bid needed for each specific source to meet your goal.
- Scaling Winners: When a pocket of high-converting traffic appears — maybe a sudden trend or a viral article — dynamic bidding reacts immediately to capture that volume. A fixed bid would hit its cap and miss the opportunity.
- Conversion Intelligence: Only an algo can predict a conversion, a skilled advertiser may learn the platforms and even sources, paying attention to what brings volume, but volume doesn’t always mean positive ROI.
- Automation Advantage: Industry evolves and more and more processes will be automated. Early adopters and skilled algo users will be more competitive on the market.
The Prerequisites: What Dynamic Bidding Needs to Work
- Data Volume: Dynamic bidding is fueled by data. Unlike manual bidding, which relies on your intuition, the algorithm needs a steady stream of conversion signals to learn user patterns. Think of the initial phase not as a cost, but as an investment in building the intelligence model for future scaling.
- Trusting the Logic: You might notice the system bidding differently than you would manually — perhaps higher on a specific source. This isn't a mistake; it's a calculation based on probability. To get the best results, you need to trust that the algorithm sees a conversion signal that might be invisible to the human eye.
- Technical Precision: Automation relies on accurate signals. Ensuring your pixel fires correctly and your postbacks are instant allows the system to bid with maximum precision. It connects actual spend and conversion data, ensuring every cent is spent efficiently.
When Affiliates Should Use Fixed Bidding
Don't let anyone tell you that fixed bidding is outdated. There are specific moments in a campaign’s lifecycle where using dynamic bidding is actually a mistake.
1. Launching Into the Unknown
When you launch a brand new offer or try a new GEO, you are flying blind. You don't know the conversion rate, and neither does the ad platform. If you enable dynamic bidding on Day 1 without historical data, the algorithm is just guessing. It might bid aggressively on traffic that turns out to be worthless. Start with fixed bids to establish a baseline. See what the traffic actually costs and how it performs before you let automation take over.
2. Strict Budget Control
If you are running a campaign with a very tight margin — say, a sweepstakes offer with a low payout — you can't afford volatility. You need to know exactly what you are paying for every click to keep your budget in check. Fixed bidding ensures you never accidentally blow your budget on a few expensive clicks that don't convert.
3. Scientific A/B Testing
If you are testing two different landing pages or creative angles, you need a controlled environment. By keeping the bid fixed, you ensure that both variables get the same "quality" of traffic, making your test results valid.
When Dynamic Bidding Works Better for Affiliates
Sticking to fixed bids forever is a safe strategy, but it’s also a limiting one. There comes a point where caution starts costing you.
So, when do you take the training wheels off?
You Have Stable Conversion Data
This is the single most important rule. Algorithms are hungry beasts: they eat data to survive. If your campaign is generating consistent conversions — we are talking about steady daily volume, not just a lucky sale here and there — it is time to switch. At this stage, the machine has a pattern to follow. It knows what a buyer looks like. If you keep using fixed bids when you have good data, you are essentially wasting the intelligence you’ve already paid for.
The Auction is Moving Too Fast
In highly competitive verticals like Finance, Health and Beauty or Sweepstakes, the price of traffic fluctuates wildly. A placement that costs $0.40 at 9 AM might spike to $1.20 by noon because a big competitor just launched a campaign. A human buyer simply can't react to that. By the time you log in and update your bid, the opportunity is gone. Dynamic bidding adjusts in milliseconds. If the competition backs off, it lowers your bid instantly to save budget. If the competition heats up for high-quality users, it fights to keep your visibility.
You Want to Scale Without Exploding CPA
Scaling with fixed bids is terrifying. You raise the bid to get more volume, and suddenly your CPA doubles because you are overpaying for all traffic, not just the good stuff. Dynamic bidding solves this volume problem. It allows you to bid aggressively only on the impressions that are likely to convert, effectively letting you expand your reach without destroying your profit margins.
How to Transition from Fixed to Dynamic Bidding
Moving from manual control to auto-bidding is nerve-wracking. It feels like taking your hands off the wheel while driving 100mph. Although, if you set it up correctly, the algorithm drives better than you ever could.
Step 1: Fix the Signal
Dynamic bidding is only as smart as the data it gets. If your postback URL delays data or drops even 5% of your conversions, the algorithm flies blind. You need flawless, real-time data passing back to the source. If your tracking isn't perfect, don't even bother with automation.
Step 2: Budget for Exploration
Don't starve the algorithm. A common mistake is restricting dynamic bidding with a micro-budget. For the system to work, it needs enough daily spend to explore and capture as many potential conversions as possible.
If your budget is too tight, the algorithm hits a wall before it finds the best pockets of traffic. You need to give it enough financial runway to test different placements and bid competitively for the users that actually match your CPA goals.
Step 3: Gather Data, Then Switch
Don't gamble on an empty campaign. The best strategy is to start with fixed bidding to build a history of performance. Wait until you have secured 10–20 conversions.
This historical data is crucial fuel for the algorithm. Once you hit that benchmark, switch the campaign to dynamic bidding. Since the system already has data to analyze, the exploration phase will be significantly shorter, allowing the algorithm to make smarter decisions right from the start.
Common Bidding Mistakes Affiliates Make
Even experienced affiliates mess this up. The technology is powerful, but it isn't magic. It amplifies whatever strategy you feed it. If your strategy is flawed, dynamic bidding will just drain your budget faster.
Here are the traps to avoid.
The Premature Switch
Switching prematurely is the most common way to kill a campaign. You launch a new offer, get three conversions and immediately switch to dynamic bidding because you want to scale. Simply put, that is not enough data: three conversions isn't a pattern, it’s a coincidence. If you force the algorithm to optimize based on a statistically insignificant sample, it will over-optimize for the wrong signals. Stick to fixed bidding until you have a solid daily volume. Think at least 10–30 conversions per week per segment.
The Helicopter Approach
Dynamic bidding is a practice of trust. Imagine a scenario where you set a target CPA of $10, but the algorithm spends $12 on a conversion. If you don’t have faith in dynamic bidding, you may panic, log in and manually lower the bid or pause the placement. This is what you shouldn’t do. Every time you manually override the system, you confuse it. You are fighting the very intelligence you paid for. The algorithm looks at averages over time, not just instantaneous costs. If you keep resetting the learning phase by tinkering with settings every few hours, performance will never stabilize.
Improper Segmentation
You cannot throw the US, India and Germany into the same dynamic bidding campaign. The economics don't work. A $10 Target CPA might be competitive in Tier-1 but completely wasteful in Tier-3.
However, avoid the opposite trap: hyper-segmentation. If you restrict the campaign settings too much (e.g., targeting only one specific device model or a tiny region), you starve the algorithm of data. The system needs room to explore. Group GEOs and devices based on similar Target CPA goals to give the machine enough volume to optimize effectively.
Future of Bidding Strategies in Affiliate Marketing
You’re probably wondering, where is all this going? If you think current algorithms are smart, just wait: the future of affiliate marketing strategies is bright.
We are moving past simple CPA optimization. Right now, most affiliates are happy if the machine gets them a sale at the right price. However, the future won’t focus on the cost of the sale: it will focus on the value of the customer.
Predictive LTV Bidding
Predictive LTV bidding is the next frontier. Current tech asks: "Will this user convert?" Future tech will ask: "How much is this user worth over 6 months?" Imagine an algorithm that bids $2.00 for User A and only $0.50 for User B, even though they both convert. Why? Because the AI predicts User A will renew their subscription, while User B is a "one-and-done" purchaser. We are already seeing early versions of this with value-based optimization. The affiliates who master this will crush competitors because they can afford to pay more for the right customers.
The End of Bot Paranoia?
Fraud is the invisible tax on our industry. In the near future, bidding engines will integrate traffic quality scores directly into the auction. Instead of you analyzing reports and blocking suspicious Site IDs manually, the bidder will do it live. It will detect non-human behavior patterns in milliseconds and automatically bid $0.00, effectively filtering out fraud before it even hits your budget.
Fully Autonomous Agents
We are inching closer to a realized set-it-and-forget-it strategy for real. Fully autonomous agents will adjust bids and budgets and shift focus between campaigns. With your cap and business goal in mind, the agent will hunt across thousands of publishers to find the math that works.
Conclusion
Let’s be real: there is no best bidding strategy. There is only the right tool for the specific job in front of you. If you are looking for a magic button that prints money while you sleep, you are in the wrong industry. Both strategies require your attention, just in different ways.
Fixed bidding is your steering wheel. It’s what you use when you are exploring new territory, testing creatives or strictly managing a limited budget. It gives you the control you need to navigate affiliate markets and gather data safely.
Dynamic bidding is your accelerator. It’s what you use when you have found a winner and need to squeeze every drop of volume out of the market. It moves faster than any human can, reacting to competition and user quality in milliseconds.
The most successful affiliates don't pick a side. They use both. They start manual to learn the baseline, and then they graduate to automation to scale.
Platforms are getting smarter every day. Tools like MGID’s CPA Tune are designed to maximize conversions and efficiency at scale, allowing you to focus on the big picture — strategy and creative. But remember: the algorithm is the engine, not the driver. You are the driver.
So, stop looking for the perfect strategy. Start with control, build your data and then let the machine do what it was built to do: win the auction.
