In my experience, private CPA deals generate more revenue than large numbers of affiliates. Many affiliates take no action after signing up for a program. Those who do use the affiliate creatives usually generate only a few sales here and there.
The fraud rate among affiliates can be very high, too. That’s especially the case with CPL offers.
I’ve managed affiliate programs, and I’ve learned that you shouldn’t approve every affiliate who applies. Look for affiliates whose sites contain high-quality content and garner a large amount of quality traffic. Also, affiliates who have large double opt-in email lists are excellent.
As long as you have a good affiliate tracking solution, you should focus your efforts on private CPA deals. Though they take longer to negotiate, they can be very profitable.
Note: I originally posted this comment in a LinkedIn group.
Affiliates have a lot to worry about these days. Advertisers themselves are busy divying up affiliates’ commissions among themselves. The The New York Supreme Court, Appellate Division issued a ruling on the so-called Amazon Tax that wasn’t the most positive for the industry. But there’s another burning issue that the industry should be watching which deserves an update: How Google is crowding out AdWords advertisers, as well as advertisers from other affiliate networks, by swapping cost-per-click ads with cost-per-action image ads from Google Affiliate Network (GAN) advertisers.
By placing cost-per-action (affiliate) image ads in the space where AdWords ads traditionally appear, Google is elevating it’s Google Affiliate Network. And it’s tapping into a new revenue stream. As I see it, ValueClick’s (VCLK) Commission Junction unit is suffering, so is Rakuten’s LinkShare. As are retail advertisers who choose to not work with Google’s GAN. In fact, I feel, they’re under increasing pressure to make a switch.
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Let’s take a small scenario. What if I promised you that if you spent 8 hours a day promoting Billy’s Shoes, and I’d pay you a commission for all the shoe sales you sent me? If you did the promoting and I paid the commission in a timely manner, we would theoretically be good partners.
Now what if I also owned Billy’s Auctions, Billy’s Games and a dozen other companies – and as soon as you sent me your hard earned shoe visitor, I’d try to steer them to my other sites instead; earning myself money and not having to pay you a commission. That could hardly be called a “partnership”.
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