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11-15-2002

Ulfie is partially right I think; one thing I look at to determine whether a site is making a serious effort is their payout scheme. Are they taking any risks? For example CE pays you on confirmed members in some of their programs, and they pay you $40 (which last I checked is about the cost of their membership.) So they're betting that their members will recur for 2 months, that's a low risk and a decent payout, since they take no immediate loss.

However other sponsors pay per trial, which is more of a risk. To compensate for it they will shave, or not count traffic from a bunch of countries, or pop tons of consoles, or do whatever they have to do to hit that payout number and keep money off their rebills. As many know the conversion rates from trials-to-memberships are getting worse and worse in mainstream adult niches, so the programs are working harder to hit their thresholds.

Really in the end it is all math and marketing tricks. Do they have the traffic volume (of their own hits, and of enough affiliate sales that don't get counted) to pay you properly without taking a huge loss. Do they pop enough of the right consoles to generate additional upsell/cross-traffic income. Do their sites convert well enough or cross-bill enough to keep their precious rebills?

I was a partner in one large affiliate program when I first got into this business. I ran 2 of my own affiliate programs, including one that was large. Every time it was all about the math. The first thing many affiliate ask you is 'how can I increase my payout?' so you have to be prepared for these questions. If you don't have a good grasp of what you are making on average per sale, you can't give them a good answer. We had a calculator in my second program that would tell us exactly what that affiliate would be making compared to other options, and how much we would make off their volume of sales. This was essential in cutting some of our bigger traffic deals; we knew what kind of payouts to offer them.

I hate to say it because I personally think that the recurring model can be very profitable for some webmasters; but there are two types of risks. Per-signup sponsors put the risk on themselves to make the money to pay you. Recurring sponsors put the risk on you; while it is their responsibility to make their sites convert that doesn't differ from per-sign, the risk you are running is that YOUR traffic will stay for 3, 5, 12 months and make you more for your effort.

As a shrewd customer, I get very wary of all of these 'new' affiliate programs who shout in your face that they're paying $40 per $2.95 trial, or paying you $20-30 per $1 signup. It is reverse-engineering the 4free program, where they pay you $1 and have to convert 1 in 30 of their free members to upsells in order to break even. While MaxCash has 200,000 members to Kara's to offset any of your crappily-converting traffic, these new programs either have big bankroll, or sneaky billing/tracking practices to 'cover the spread' so to speak. Nothing in this business is too good to be true, it's all a numbers and marketing game.

C.

11-15-2002	#6
Cal Guest Posts: n/a	Ulfie is partially right I think; one thing I look at to determine whether a site is making a serious effort is their payout scheme. Are they taking any risks? For example CE pays you on confirmed members in some of their programs, and they pay you $40 (which last I checked is about the cost of their membership.) So they're betting that their members will recur for 2 months, that's a low risk and a decent payout, since they take no immediate loss. However other sponsors pay per trial, which is more of a risk. To compensate for it they will shave, or not count traffic from a bunch of countries, or pop tons of consoles, or do whatever they have to do to hit that payout number and keep money off their rebills. As many know the conversion rates from trials-to-memberships are getting worse and worse in mainstream adult niches, so the programs are working harder to hit their thresholds. Really in the end it is all math and marketing tricks. Do they have the traffic volume (of their own hits, and of enough affiliate sales that don't get counted) to pay you properly without taking a huge loss. Do they pop enough of the right consoles to generate additional upsell/cross-traffic income. Do their sites convert well enough or cross-bill enough to keep their precious rebills? I was a partner in one large affiliate program when I first got into this business. I ran 2 of my own affiliate programs, including one that was large. Every time it was all about the math. The first thing many affiliate ask you is 'how can I increase my payout?' so you have to be prepared for these questions. If you don't have a good grasp of what you are making on average per sale, you can't give them a good answer. We had a calculator in my second program that would tell us exactly what that affiliate would be making compared to other options, and how much we would make off their volume of sales. This was essential in cutting some of our bigger traffic deals; we knew what kind of payouts to offer them. I hate to say it because I personally think that the recurring model can be very profitable for some webmasters; but there are two types of risks. Per-signup sponsors put the risk on themselves to make the money to pay you. Recurring sponsors put the risk on you; while it is their responsibility to make their sites convert that doesn't differ from per-sign, the risk you are running is that YOUR traffic will stay for 3, 5, 12 months and make you more for your effort. As a shrewd customer, I get very wary of all of these 'new' affiliate programs who shout in your face that they're paying $40 per $2.95 trial, or paying you $20-30 per $1 signup. It is reverse-engineering the 4free program, where they pay you $1 and have to convert 1 in 30 of their free members to upsells in order to break even. While MaxCash has 200,000 members to Kara's to offset any of your crappily-converting traffic, these new programs either have big bankroll, or sneaky billing/tracking practices to 'cover the spread' so to speak. Nothing in this business is too good to be true, it's all a numbers and marketing game. C.