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All my love,
Mr. Nobody
"In order to understand what a CPA network is one needs to understand a few facts:
1) Affiliates have grown up to become affiliate networks
2) Many of your biggest affiliates aren’t affiliates; rather, they’re affiliates who have transformed into affiliate ("CPA") networks
3) These affiliates-now-networks are better at motivating affiliates than traditional affiliate networks
Confused? Here’s an example.
An advertiser pays 10% to any affiliate (or “publisher") off the street through their CJ program. It pays 15% to its very best or “super affiliates.” One day, a super affiliate realizes that it could use it’s privileged position and eliminate all the business risk associated with being an affiliate (buying advertising, conducting search optimization, managing product data feeds, testing creatives). The affiliate simply approaches and motivates other affiliates to generate orders and/or leads for the advertiser… offering them 12%. Hey, that’s better than the 10% “street” commission over at CJ. The other 3%? That’s profit for the super affiliate. Indeed, it comes at the rate of 80-90% margin to the “super affiliate now turned network”—even after it has purchased 2 Porsche Boxters as contest prizes to their highest grossing affiliates. Sure beats the little tchotckies advertisers themselves use as contest bait (you can keep your plane tickets Orbitz!). "
Link
Answer: CPA Networks don't run Rev Share. Shows Molander's limited understand of the space to make such a remark of this. Mr. Nobody nailed the problem with Molander. He does not know what he is talking about when it comes to CPA networks and affilate marketing
People at Performics don't seem to agree with him on his role there - lol.
Anyhow, as everybody seems to know but Jeff - most affiliate programs are rev share and cpa networks don't do rev share.
How did he become an expert?
Explain what you mean by "Rev share" as well. I think if both sides can define how they understand that term/practice, it would create meaningful dialog here and lift the conversation above the level of a school yard game of tag.
Your point? It's no secret that rev share (affiliates earning a percent of sale) affiliate programs are rare in cpa networks.
We'll be seeing lists of the top e-commerce sites in the next week as Black Friday approaches - how many of those are in CPA networks? Most, if not all are in affiliate networks with affiliate programs operating on a rev share.
Off the top of my head, the top players generally include Amazon.com, Walmart.com, BestBuy.com, Target .com and Dell.com.
What bothers me more than that is the general disdain Ms. X seems to show for anyone who wants to have personal relationships with their affiliates. I'll accept that it is "all about money" -- but if anything, a common financial interest is what makes affiliate marketing work. That common interest is strengthened when personal relationships are developed, and not just because they establish loyalty (which doesn't exist in a CPA Network), but because it allows the affiliate to push traffic more effectively by completely understanding the business model of the merchant -- seasonal changes, promotional offers, media campaigns, etc. And keeping a clean affiliate channel -- one that doesn't have spyware or spammers or cookie stuffers or link stealing -- is a purely financial goal, and has nothing to do with being "irrational" or "pleasing the ABW crowd". Or is it better to blindly pay a percentage of sale to anyone who can manage to cookie users who were coming to your site anyway, to totally ignore brand concerns and allow your brand to be displayed in spam or spyware?
As far as bitching about the amount of time it takes to approve new affiliates, give me a break. There are technological fixes that can speed the process up significantly (most of the networks are simply too retarded to offer them), and a $10/hour intern can be trained to handle this job, it's not rocket science. And as far as the 5000 affiliates vs. 1 affiliate driving 5000 sales, that is not a choice anyone needs to make, all programs have both. If you aren't interested in reaching niche or new markets then cut anyone who isn't driving significant revenue and forget about it. You don't have to be in a CPA network to do that. If I'm a retailer and I can keep a decent relationship with 5000 niche marketers, especially at a time when niches are becoming more and more central to online marketing, I'm keeping those affiliates unless they are a significant drag on my time. Most of their questions can be answered, again, by an intern.
I love your podcasts Jeff, but offering such a one sided view of a complicated industry doesn't serve anyone's interests. CPA Networks are excellent at driving amazing levels of traffic to certain offers, but they are not a threat to affiliate networks because they don't serve the same clients or even the same function.
This makes Mr. Nobody right? Okay but nobody (not I nor my guest) discussed anything in terms of retail or service/lead.
So, this makes Mr. Nobody and everyone else who showed up here (but you I think) just typical Molander-bashers with a side of Performics/AffTrack mixed in (shows creativity).
Ms. X shows disdain you say. That's your view. Mine: She is a realist who is tired of being tasked to do the $10 an hour intern job (at her salary which is higher). You are missing, I believe, her entire point. That is: Hire the intern to do that labor-intensive work called "affiliate marketing" and let a CPA network do the rest (a la Google AdWords). No relationship needed. You suggest that her not liking to go through apps all day long is linked intrinsically with her lack of interest in relationships.
Jeff, isn't life about presenting all sides so that people can draw a conclusion? Aren't my podcasts presenting sides that nobody has heard or blogged about before -- leading cowards who have paychecks rooted in the status quo to attempt to throw eggs at me? I think they are. That's not me bragging that's me simply stating fact.
In fact, I challenge anyone to find a place on the Web that presents a viewpoint similar to Ms. X's view.
The reason people are so upset with me (perhaps yourself included, Jeff) is because I'm presenting what they know is true about how their clients/advertisers think. If I keep this up advertisers might, some day, realize they all think alike -- and act on that realization.
I'll take butterflies and lollipops over a pink shirt reality any day my friend. :o
Have you bought the parrot for your shoulder yet?
You're getting schooled over there too. Ms. X and having to alter the voice. Pure comedy. I'll copy and paste what I posted over there:
"Jeff, just do this little test for me and then give me some stats.
Login to CJ. Go thru every merchant/offer they have. Now go to your favorite CPA network. How many merchants/offers are they running that CJ is running.
What's the number, 1%, 2% max? Some competition."
Like I said, CPA networks aren't competition to traditional affiliate networks. Someone who has been in this industry as long as you have should know the difference.
No, this is actually one of those cases where I disagree with her quite strongly. In case you've forgotten, our parent company owns an awesome CPA network called Primary Ads. I know how they do business and how much traffic they can drive and it's impressive to say the least. But they don't have the same clients we do, its just a different biz. You can scale lead gen, I just think that the more you try to scale rev share the less you achieve with it, its the nature of it.
I have a proposal for anyone interested...
I want to bring together a number of different insights into a specific question brought up over and over on the podcast and in this debate. It's a question that I've been pondering for about three years since I was there at the launch of AdDrive (a CPA network) and have worked on but never come up with a satisfactory answer.
If you'd like to respond to the question, email me (sam@costpernews.com) and I'll send it to you. The catch is that I want a response from you by this Friday. That's not a lot of time, but the iron is hot, and we all need a good homework assignment. You should email me your response back as soon as possible (at least by Friday at noon est).
On Friday at noon est, I'll post all the responses (with links to your respective programs and your pic if you'd like) at once in an amalgamated post. I'll post your answer in full and respond to them as a whole and then to each of them individually with my own insights.
I'd like to get at least 10 of you to do this homework assignment. So, if you're interested in my important question and promise to respond by Friday noon, send me an email and I'll get the question (and a copy of these instructions) over to you immediately.
Looking forward to a good debate.
Sam
If you've already posted, you have to logout and then log back in to Wordress to see the subscribe option (below the comment box).
Happy commenting and email me with any questions.
Sam
lol! I think you might have something there.
Hmmm... I don't know about that. Your point was certainly valid in 2004, but there are some interesting offers out there in the CPA Networks today that rival anything in CJ or Linkshare (especially in terms of payout %, payout rate and landing page efficiency).
This is definitely an area that we must consider when comparing CPA Networks and affiliate networks, so thanks for bringing this aspect up. I'm interested to hear what others think (I'm trying to get some CPA Networkers on here to respond as well, so if you know any send them this way if you will... would make the conversation outstanding).
While I appreciate and agree with the point you're making it does not refute mine -- affiliate networks like CJ, Linkshare, etc. all want to have the same offers (that CPA networks do). Typically, they're more lucrative. Hence, Porsche Boxters, flashing T&A at Affiliate Summits yelling "are these the hottest girls or what!?" into the exhibit hall during raffles, etc.
Do you believe that Azoogleads having launched an affiliate network called mPort and getting booted shortly thereafter from Commission Junction was coincidental? Perhaps now we're going to get into arguing the definition of a CPA network. I can just taste it.
BTW, take a look at the offers running on mPort - the vast majority are CPA deals. What does that tell you?
Jeff, yes. Ms. X was not but you and others were. Somehow this whole discussion went in the direction of debating over CPA networks competing with "traditional" affiliate networks (true or false). Hence, your statement that it's a different business isn't really true. They compete for CPA offers... regardless of percentages of types of offers/advertisers.
As for Ms. X's assertion, this is your viewpoint. I'm simply suggesting that it may be clouded just as mine may be clouded. If you look at the entire nature of the "comments" on this string they are typical -- attacking me for presenting a viewpoint. Attacking me anonymously and, frankly, poorly... along side of people who literally make clowns of themselves. My what courage that takes.. to make poorly thought-out arguments under cover. What does that earn you? It earns people tuning you out.
Jeff, thankfully, put his name on your words; hence, I'm still here (I'm also here to continue to read Nobody who I've managed to finger this morning as he's as predictable as he is a coward; we've done battle before).
Ms. X is frustrated. She's told me as much. She's not suggesting that anyone is better served here or there. She's suggesting that affiliate networks have inherent weaknesses that have become outdated in a world that cares MORE about scale than it does "relationships." Her attitude doesn't shun affiliate networks. She still works with one although she questions the sense of it all. It's not her decision to dump a network... she is merely an influencer who thinks rather like a decision-maker.
Her words are honest, powerful and hence frightening to Mr. Nobody and Company. Who's to say she isn't influencing her boss right now? She may not be able to put her name on her words but she scares people... enough for them to come here and throw stones at the guy who offered her up.
Here's a thought: Change. Why not pick up a Seth Godin book and CHANGE, Commission Junction (et al)???
So, let's define the key questions and move from there (see next post).
"To complain about having to weed through affiliates at CJ or LinkShare but then say it is easier to just let the CPA networks do that for her and pick the affiliates is proof that this person doesn’t get much of anything when it comes to marketing online."
That's you're very best? Calling people names? Reap that lack of respect, bro. Although I can think of one lady (who is fond of you) who thinks and verbalizes her beliefs similarly. Logical argument starts and stops at "you don't get it."
Now it is getting more boring - yawn.
It comes off as someone who should find another line of work, one big whine fest:
"You're the one stuck there looking at all the applications." At the beginning of the podcast.
Um, yeah that's the job. You're the affiliate manager for a merchant, you're supposed to look at who you let in, not the networks. It's your program, you should be running it. It seems like you're throwing up your hands and don't want to do the job and have the networks pick and choose who they let in YOUR program.
And Ms. X said one of the benefits of the CPA network is they do all the work in choosing the partners
Paraphrase from Ms. X
"You should care where you stuff is being shown. You should but at the end of the day if you want to get your approvals, you need volume"
"Similar to what Google does, not a lot of transparency in terms of partners that send traffic, you just get the trafic."
And that's a good thing Jeff, Ms.X ? Who cares who your partners are as long as you get traffic. Do Wayne and Ben need to have a sit down with you?
And of course you throw in you're a consultant, as usual in these podcasts.
If anything this podcast make the both of you look bad along with CPA networks.
Like I said before, no competition to traditional networks. Of course there is always room for improvement.
Again at 6:30 more complaining. "You're the one stuck there having to go thru the applications"
That's the job.
Why are you torturing yourself? If I'm not a serious threat to something (by doing what I do with podcasts, blogs, etc.) then you all have way too much time on your hands. Turn the channel. Your pick.
If you've got thoughts on this subject and want to develop them in an extended form, see the post above this one (homework assignment).
So far, we're up to 8 responders to my question (high quality and interesting insights btw) so I'd like to get a few more to round out the discussion.
Sam
Goodbye,
Mister Nobody
Good for business. Stir stuff up, sell fear, create problems/controversy etc. Hire Jeff The Consultant** to fix them for you or guide you. This just looks like advertising to me. I've listened to past podcasts where one of the merchants just happened to say: paraphrase "Isn't there somebody that had some sort of affiliate list out?" And then Jeff chimes in, Why yes, that's me. As if the merchants chosen for his podcasts had no idea he had an affiliate list out.
**Correct me if I'm wrong on that. That is what you do for a living? Consultant work.
This is not Jeff's site.
This is my site. I went to Jeff with this idea and asked for a podcast on these topics because I do think this is an issue that needs to be discussed intelligently somewhere, and I knew Jeff would be able to ask questions that got people talking. He did, and it has. I also want to hear insights from others of you who disagree with Jeff so I will be calling on you to do similar projects if I can convince you of the common good in doing so. I did not foresee the number of back-and-forth comments with no substance from both Jeff and others, but I am glad that people such as Shawn and Jeff Doak have offered up creative and insightful thoughts.
Jeff M may use this as an advertising tool somewhere else, but this is definitely not an advertisement for him or for anyone else. Please don't insult me by claiming such a thing. Scroll down and take a look back at the content I've provided here (for free) before you continue down that path of specious reasoning.
And no, I'm not a consultant. I'm a college professor and someone with a long past in affiliate marketing who is still very interested in the space. If that's not objective enough for you, I don't know what could be.
BTW, if anyone would like to advertise here on CPN, it's rather cheap. Check out the "Advertise" page accessible from the home page.
Jeff D. said:
"Ms X wasn’t debating the relative profitability of different advertiser models for ad networks, she was saying, essentially, that if you are an advertiser of any kind you are better served going to a CPA network than to a traditional affiliate network"
That's what I took away from her comments as well. She further gave a bunch of reasons why. Again, I strongly disagree with that point of view. There were many factors that I feel *should be* extremely important in the overall decision making process for an Advertiser that were completely left out. And hell must have frozen over for me to say this next thing, but.....I actually agree with a point that Jeff M. makes (at least it seems to be a point he is trying to make) is some of his comments. And that is, you may not like or agree with what Ms. X said but it is a point of view that *is* held by a growing number of Advertisers. From my own personal experience, as well as seeing the grow of CPA Neworks overall, I'd have to agree with that. It is a veiw held by some within this Industry. Again, I don't agree with the view and feel that it is a view ripe with pitfalls (and some potentially serious ones) for advertisers.
What I feel was missing from the discussion (which definitely was one-sided so here goes a bit of the flip side) is that quality should factor into the equation and not just volume. Who and how your offer is bieng promoted should matter. If it doesn't matter to you as an Advertiser, then you might want to consider popping you head out of the sand and taking a careful look at the current environment. Because a very clear message is being sent that as an Advertiser you as the Advertiser are going to be held accountable for the how and where. And laying it off to an affiliate did the bad deed isn't going to cut it. In that context, then transparency would seem to be something that is important. Or at least the abililty and willingness of the CPA Network you are dealling with to care about it. Volume does not necesssarily equal quality. Volume and sales are easy to manipulate. I look at it day end and day out. There is such a thing high risk sales/leads for an advertiser and there should be a risk assessment process being done by Advertisers along those lines. JMO of course. :)
Of course volume in and of itself can be a great enticement to an Advertiser. And it is marketed quite well to Advertisers. But I kept waiting to hear Ms.X say such words like ROI, ROAS, incremental sales, true profitabililty of the Advertiser's campaign but either I missed it or she didn't say it. Are those things which an Advertiser should no longer give thought to?
As I got my gut reaction under control (which was along the lines of wanting the throw my speakers against the wall), I thought about what the real message Ms. X was wanting to send out. And while the comments about CPA Networks being about lead-gen and traditional networks retail rev-share have validity, is it possible something is being overlooked here? Online marketing is a very dynamic and rapidly changing arena. I've been under the impression for a while now that there are some CPA Networks who have decided to expand their model beyond the types of offers traditionally thought of consisting a CPA Network. Could it be that CPA Networks are wanting a share of the retail rev-share market held by the likes of CJ and LS? These types of offers are not non-existent on CPA Networks anymore. I'm seeing an increasing number of them. And while it might not be Walmart, Dell, Target (free gift card offers on CPAs for these merchants don't count), I am seeing increasing numbers of retail rev-share merchants (who may also be on a traditional network) being offered through some CPA Networks. I can certainly see some very good reasons that CPA Networks might want to diversify their Advertising offerings along these lines. It's not a trend I'm particularly happy to see considering how voluem is generated by some CPA Networks, but it doesn't mean that it isn't happening.
And whether or not I agree with Jeff M. on many things, it doesn't mean that it isn't an issue that bears discussing within our Industry.
Ms. X didn't focus her comments on quality but did not actively suggest that it didn't matter -- that all that matters is getting a form filled out or an email address. I'm simply not seeing this reasoning that supports an "anti-quality" philosophy on her part. This is another part of what's missing here: people actually taking what she said and debating her actual statements. Rather, it is simple to suggest that you got a visceral reaction without actually telling us how you rationalized having that reaction. I'm providing Sam with a piece that delves into this deeper.
As for your comments regarding CPA networks and affiliate networks each having "advertiser envy" you are on to something and frankly I've never thought about it as being dual before you suggested it -- but it is. What CPA networks "don't have" is rather high brow, retail advertiser relationships. Thus, they want them (regardless of things like profit margin being lower many times). They want what they cannot have (witness ShareResults trying to move into retail).
Thanks for showing up and making it seem more worthwhile.
I've looked at various CPA networks and it's rare they carry an advertiser that one of the major networks do. I'm sure there are a few but I would love to see a list of what advertisers are available on CPA networks that can be found on Performics, CJ or Linkshare. Just post the merchants and what CPA network they're on. Also you might see a growing number of CPA networks but that doesn't necessarily correspond to a growing number of advertisers. There's not much variety, it's usually the same advertisers pushing their offers on as many CPA as possible.
"I’ve been under the impression for a while now that there are some CPA Networks who have decided to expand their model beyond the types of offers traditionally thought of consisting a CPA Network."
There is a lot of talk about CPA networks and the major traditional networks, even tho they mainly deal in different type of offers. But where is the talk about the smaller affiliate networks that actually do rev share offers like the traditional networks? Like avantlink, affiliatefuture that I finally joined since they got DeepDiscountDVD, a favorite among many, etc. I would keep an eye on those.
From what I see, advertisers who have offers that are suitable for a CPA type deal - and who also have multiple SKU rev-share % deals are using a combination of both mediums to attain their goals. It isn't my place here to provide the specific examples that I am thinking of, but they are out there to find. In reality I think they are being used as seperate channels, where appropriate. (Not all merchants can use "CPA", and not all can use "Affiliate")
Jeff, one thing that did sound interesting to me was the willingness to "give up" transparency in exchange for "more sales with less effort". This sounds counter to me to advice that I've heard from you and conversations I've had with AMs on the issue. The majority of AMs that I work with want more vision into the whole process... not less. So, my question is... Is this a "limited" viewpoint that is being voiced by Ms. X - is it really one that is gaining mainstream and grand scope amongst advertisers (that of desiring less work/more sales/less transparency) ... I don't doubt that Ms. X is sincere, and I can certainly understand the viewpoint - but I'm not sure that it is gaining as much traction as is being suggested here.
Sorry I'm late to the party, feel free to ignore me. :)
How dare you suggest that I can recognize both sides of an issue?! Don't you realize that I'm only presenting one here and, in doing so, trying to push my slimy, ignorance-based agenda?
I’m not sure that it is gaining as much traction as is being suggested here.
Thanks for suggesting this. I'm not sure either. That's why I asked her and that's why we have comments on blogs (I thought). Good that you were late to dinner for if you were on time you would have ruined everyone's fun.