Feedback Wanted - CPA/Affiliate Networks?
In an effort to learn a bit more about the US market & to try and get a few more comments coming on, I’m after a bit of feedback from readers to help me understand the main differences and splits between CPA and Affiliate networks in the states.
We don’t see the same kind of split (or at least it’s not mentioned as much) in the UK, but at the same time we have far less networks operating over here than in the US.
So my main question - why the big split and are they not the same thing anyhow (paid on performance)?
February 5th, 2007 at 6:02 pm
At the surface they are similar. Yes, they’re a pay for performance model. Typically, CPA networks pay a bounty on acquisition rather than percentage of sale. That’s why you see mostly lead-based promotions.
CPA networks (here in the states, anway) tend to be just big affiliates themselves, or start out that way until they become big enough to build their own infrastructure and make their own deals. They can offer higher payouts on average than the networks because they aggregate lots of other affiliates into one large one with more weight and leverage. I think they even take a loss on some offers, just to get in good with big affiliates.
Most of the split that you’re talking about comes from the basis and popular opinion that many CPA networks have a shady side and cause problems to the affiliate networks and merchants because they lack transparency and accountability. They can load up with spyware, email spam, etc., and can effectively “launder” the leads that they send on to the merchants. They can “hypothetically” be affiliates of themselves, and push through some junk, and “clean up the affiliate” when merchants complain.
You don’t hear about similiar issues over there?
February 5th, 2007 at 7:58 pm
Thanks Scott - that was exactly the kind of info that I was after. Interesting reading.
Sounds like a big issue you have over there. We don’t really have any CPA specific networks over here - I guess Smart Quotes or OMG are the closest too it as they are Finance based and this is usually a CPA rather than a % but most networks are a mix of the two payment methods.
We don’t seem to have as many problems over here. The networks have a zero-tolerance policy to Spyware and if it’s found that a network is working with them then the network gets a bit of a kicking and removes the particular affiliate pretty fast. Again, Email Spam isn’t tolerated as is closely monitored. Maybe it’s because all the Viagra deals seem to be in USD!
This explains also explains the news of MySpace suing a CPA network (or owner of one) the other week and I can finally understand why.
So what is the general consensus from affiliates like yourself on these networks? Do you refrain from using them to promote merchants, even though they have better deals and what kind of things are being done to prevent against the shady side - surely this has a very negative impact on the industry and can make merchants very wary about entering the market?
February 7th, 2007 at 1:26 pm
Hi Guys,
PrimeQ, I think would be a good example of a US CPA network that has done well in the UK