Saturday, June 15, 2013

Understanding Rented Referrals

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rented referrals
To the best of my knowledge, Neobux was the first Pay-per-Click program to introduce rented referrals. A rented referral is one you pay a 30 day “rent” fee to Neobux for. Rental fees vary based on how many rented referrals you hold (as of Apr-15, 2013) the costs are as follows:
0 -> 250$0.20$0.0057
251 -> 500$0.21$0.0060
501 -> 750$0.22$0.0062
751 -> 1000$0.23$0.0065
1001 -> 1250$0.24$0.0068
1251 -> 1500$0.25$0.0071
1501 -> 1750$0.26$0.0074
more than 1750$0.27$0.0077
*We will discuss what AutoPay is a little later on in this post.
Note: Each rented referral you receive will have clicked at least 11 ads in the last 5 days – this is to cut down on the chance of renting a referral that is no longer active!
To make a profit on your rented referral, he/she has to click a certain number of ads per day. The break even point will vary based on your type of membership and number of rented referrals you have, as will certain limitations and restrictions.
Understanding rented referral concepts, features, your breakeven points and restrictions is paramount to making more money with Neobux. This post will take an in-depth look at rented referrals (mainly from a standard and golden member focus) and explain things like break-even points, AutoPay, AutoRenew and other important factors. Please note, this is not a rented referral strategy, for that, please see our Neobux Strategy guides.
Tip: There is absolutely no requirement for anyone that joins Neobux to have referrals, rented or otherwise. However, having referrals can dramatically increase the revenue you receive!

Rented Referrals – Limitations on Memberships

Let’s start with something nice and basic. You are limited to the number of rented referrals by your type of membership. The limits are as follows:
Standard Golden Emerald Platinum Sapphire Diamond Ultimate
You are also limited to when you rent referrals. You can only rent once per week, from the day and time you last rented. Let me elaborate. Say on week 1 I rent at 10am on a Monday – I can rent again 10am the following Monday. But if I don’t actually rent until 10am that following Tuesday – the next time I could rent would be the following Tuesday (not Monday). Got it? Good!
Golden members operate a little differently here. As per Neobux, the demand for rented referrals when you’re Golden is significantly higher – because typically you make a lot more money as a golden member, therefore have more money to spend on rented referrals.
As a Golden member, you can still rent weekly – but have to specify 2 times during the day when you want to rent. For example, 8am and 8pm. This helps in spreading the availability of referrals out through the day, instead of everybody hammering the system at midnight trying to pick up the referrals.
Tip: Rented referrals go quick when your Golden! It is best to exhaust your limit as a standard member (300 rented referrals) before going Golden, giving you a good head start!
There is an alleviation to the frustration of Golden members trying unsuccessfully to rent, and that is the rental queuing system. Here are some quick facts for Golden members relating to the use of the queuing system:
  • Rental cost is 1.5 times that of the normal cost
  • You can only queue 55 rented referrals in your 1st year, 65 second year onr
  • You can only queue if you have enough available funds in your rental balance
  • You must have less than 2,000 referrals
  • You must wait 7 days since the last rental pack was delivered, queued or otherwise

AutoPay and AutoRenew

Before we calculate break even points, I want to mention AutoPay and AutoRenew here as both do effect basic break even analysis. These are quite simple to understand:
  • AutoPay – adds a days rental to the referral if they click an ad on that day at a 15% discount
  • AutoRenew – Automatically renews the referral if they approach expiration at varying discounts

Rented Referrals – AutoPay

I would definitely recommend turning this on. It will give you a 15% discount on the standard rented referral rates, regardless of how many rented referrals you have. To describe how it works in a practical example:
You rent a referral. The rental price you pay is 20c (assuming you have under 250 rented referrals). Each rented referral lasts for 30 days. So, on day 1 let’s say that rented referral clicks on at least 1 ad. If you have AutoPay turned on, your rental balance will be reduced by $0.0057 (a single days rental), and your rented referral days remaining will be incremented by 1 day. Now, if we multiply $0.0057 by 30, this comes to around 17c – 15% less than the standard 20c we first rented at.
Conversely, if your rented referral does not click in one particular day, even with AutoPay turned on, you will not be charged. AutoPay is only charged if your rented referral clicks on any given day.
Bottom line is, AutoPay saves you money, so turn it on! You can turn on AutoPay by logging into your Neobux account, clicking on “Rented” in the left hand side menu (under referrals). You will see the AutoPay option on your Rented Referrals screen – simply click on it if it says disabled to enable AutoPay.
rented referrals autopay

Rented Referrals – AutoRenew

AutoRenew can be used alongside AutoPay or independently. When a rented referral is close to their “rent expiring”, you can instruct Neobux to automatically renew that referral for either 15, 30, 60, 90, 150 or 240 days. The longer you set the referral renewal time, the more discount you receive on renewing. The AutoRenew discount rates are as follows:
Extension Time15 days30 days60 days90 days150 days240 days
Discount on Renewal0%5%10%18%25%30%
I have AutoRenew turned on with a 30/3 setting. This means my rented referrals will AutoRenew when they have 3 days rent left for another 30 days. However, I typically manually renew my referrals, for how long depends on how much I have available in my balance.
AutoRenew charges will be debited from Rental balance, unless there are insignificant funds, in which case it will be deducted from your main balance. If you have insignificant funds there, you will lose that referral.

Calculating Break-even Averages for Rented Referrals

This is really easy given we know the costs and revenue figures. Here’s a couple of tables that outline just what we need:
Standard MemberGolden Member
Revenue from Clicks*$0.005$0.010
* You get more when a rented referral clicks on extended ads. I don’t see a lot of these clicks at all – so we will conservatively ignore the higher click commissions in our break even calculation.
0 -> 250$0.20$0.0057
251 -> 500$0.21$0.0060
501 -> 750$0.22$0.0062
751 -> 1000$0.23$0.0065
1001 -> 1250$0.24$0.0068
1251 -> 1500$0.25$0.0071
1501 -> 1750$0.26$0.0074
more than 1750$0.27$0.0077
Let’s do some simple math.
As a standard member, with under 251 rented referrals, our break even calculation is:
Cost of Referral ($0.20)/Click Revenue ($0.005) = 40 clicks per 30 days, or 1.33 p/day
As a golden member, with under 251 rented referrals, our break even calculation is:
Cost of Referral ($0.20)/Click Revenue ($0.01) = 20 clicks per 30 days, or 0.67 p/day
We will work our break even calculations in terms of clicks per day. You can login to Neobux at any time and see your current clicks per day by clicking the little bar chart icon right at the top of the screen – so we can easily gauge if we’re in profit.
Let’s workout break evens for all levels of rented referrals just for kicks:
Revenue per ClickBE Clicks Per Day
ReferralsCost MonthlyStandardGoldenStandardGolden
0 -> 250$0.2000$0.0050$0.01001.330.67
251 -> 500$0.2100$0.0050$0.01001.400.70
501 -> 750$0.2200$0.0050$0.01001.470.73
751 -> 1000$0.2300$0.0050$0.01001.530.77
1001 -> 1250$0.2400$0.0050$0.01001.600.80
1251 -> 1500$0.2500$0.0050$0.01001.670.83
1501 -> 1750$0.2600$0.0050$0.01001.730.87
more than 1750$0.2700$0.0050$0.01001.800.90
Now, let’s take this one step further. We have AutoPay turned on, so we are actually paying 15% less than when we first rented – the end result is that the above break even clicks per day are 15% inflated, but let’s leave them as they are, because there’s another factor we need to address – recycling referrals and recycling costs.
Note: If you have oodles of dollars in your account and can afford to turn on AutoRenew at 240 days, you can subtract 30% from the break even points above, as renewing for 240 days attracts a 30% rented referral discount!×

Recycling Rented Referrals

recycle rented referralsI’ve purposely omitted recycling rented referrals and left them until last on purpose. The reason being they are such an unknown variable within the Neobux platform. First, let’s understand something. Not all of your referrals are going to click 4 ads every day for the entirety of your membership. People get bored, people take days off, people quit, people click less than 4 ads – especially standard members with no rented referrals that don’t have to click every day to make sure they get credit from their (non-existent) rented referrals.
This is where a good rental referral strategy comes into play. The best way to construct a winning strategy is by first fully understanding what rented referrals are, the associated costs and limitations – which is what this post aims at delivering. So… let me get back on track and explain the recycling features and costs. Recycling is pretty simple to understand, so I’ll list the considerations as bullet points for the sake of easy reading.
  • Recycling a rented referral costs $0.07
  • Inactive referrals are automatically replaced by Neobux for free. The inactivity period is 14 days
  • When you recycle, the new referral maintains the number of days left before recycling – so if I recycle a referral with 15 days remaining, the new referral will have 15 days rent left.
I really don’t want to get too much into strategy here, but if you’re wondering, yes it is better to recycle the in-actives rather than wait 7 or 14 days for Neobux to autocratically recycle them. That $0.07 can be made up in 1 or 2 days from a more active referral, instead of waiting x number of days for automatic recycling.

Understanding Rented Referrals Conclusion

If you want to make decent money with Neobux, without directly referring a horde of people, rented referrals is the way to go. I have done my best to stay away from strategy here (although I know I slipped up a couple of times) as I feel it is important to separate my guides from strategies. There’s understanding something, then there’s applying that knowledge to strategy – a process which is most effective in two steps, rather than trying to digest everything at once.
Please do consult the Neobux Strategies page if you would like to read through my own personal strategy to managing referrals, and by all means ask any questions in the comment box below regarding this guide. Thanks for reading!