Problems with running traffic to CPA affiliate networks
OK this might be a bit of an eye opener for anyone running traffic to CPA networks. This is obviously a negative post about some pet hates but there is a place for networks in the industry and they have their uses for sure which I’ll go through at the end.
- CPA networks have “internal media buying teams”. They will tell you there is no conflict of interest and that they work independently. Some even have their media buy teams operate under a different company name within the group. There is however an obvious conflict of interest. I got speaking to a media buyer for a CPA network who I know personally and they have access to all the data on the network. What campaigns are working, what traffic sources affiliates using, even referrer data for landers. These media buyers are operating as individual affiliates with access to network and individual data.
- CPA tracking systems will cut 5%~ from your ROI on a good day. So adding an additional redirect through CAKE or HasOffers is going to cost you money. It’s slow because a lot of information is being tracked. Half the time they have inaccurate GEOIP data which means a percentage of your traffic gets diverted to other generic offers and never converts, or if it does you never see the commissions. For mobile carrier offers this is even worse because of the slow page load times.
- Networks need to make a margin. You may think that they get higher commissions from the merchants but this just isn’t true. If you can push more volume than a CPA network you can get a higher payout than they are getting direct. Merchants don’t care if it’s a network/publisher/affiliate all they care about is volume and ROI. I’ve got payouts 4x the street payout advertised by CPA networks. If you are running a new campaign and are using a standard payout you could almost certainly double it or more if you can get enough volume to go direct.
- Risk – One argument for running traffic to a network is it spreads your risk because you are protected by them if the merchant doesn’t pay. This is total crap! Ask anyone who’s been in the business a while who they have lost more money with networks or direct merchants. Most merchants are highly profitable real online businesses. There is still some risk depending on the company and offer, think of recent FTC closures. But for every merchant that goes down there are three CPA networks who go bust. They are popping up and going under all the time, taking affiliates money with them. You also add another layer of risk in not getting paid because of technical issues. Many years ago I got told that I wasn’t getting paid because another affiliate running the offer sent some fraudulent traffic and the merchant was refusing to pay for all the leads… Say What?!
- Communication and negotiations are harder when you have a middle man. All you need as an affiliate is a good offer and a good payout. Most of the reps are not trained in negotiations and are pretty rubbish at it. An affiliates business relies on getting the best payouts available and in my opinion there is no one in a better place to negotiate that than the affiliate themselves. Everything is just more difficult with a network, you get emails like “Oh I’ve talked to our account manager for that offer and he says there probably isn’t a chance of a higher payout at this time. Reach out to me if you need anything else”. Basic translation is it’s nearly lunch and the guy down the hall can’t be bothered to put the effort in to negotiating a higher payout and now it’s my damn 9-5 job to break this to you gently.
- Broken offers – this is one that really gets me. You run traffic and the offer just doesn’t convert at all. It’s just not been setup right either because it’s new to the network or the merchant took it down two years ago and no one has removed it from the offer list. Just an absolute waste of time and money because you get zero leads, zero revenue and zero data.
Having said all this there is a place for CPA networks. I don’t know if I would have found out about some of the sectors I work in now without offer lists which advertise what is working. If you are looking to test a new vertical or just want to run something different then going to a CPA network and seeing what they are pushing is a good way to get some inspiration and see what is working in the industry. Bare in mind though that by the time the offer is on the networks it’s been blown up already by media companies and affiliates who are running it direct and these will be the guys you will be competing with.
Some CPA networks actually add value to the process too. Companies like Neverblue take their affiliates on trips which is great for meeting people in an industry which is pretty anti-social for 11 months of the year. Others provide advice and tools to use although these vary in quality.
If you want to throw mud at the wall and see what sticks then a CPA network is the ideal place to test out lots of ideas and offers. When you find something working though, remove the wall – jamesbachini.com