12 Comments

Ms. X Talks CPA vs. Affiliate Networks, Deep Throat Style

Nov 15, 2006
by

Sam pulls his best deep throat expose impression at costpernews.com by enlisting Jeff “The pope of the podcast” Molander to interview an veteran affiliate manager in disguise to lay the smack down on traditional affiliate networks.

In this special edition podcast, Jeff interviews Ms. X, a veteran affiliate manager who suggests that traditional affiliate networks are under fire by “CPA (cost per action) networks” that are more nimble, flexible and offer what advertisers really want – leads or sales without the work. Jeff decided to protect her identity due to her current work situation and place within the industry. It would be preferable to have someone able to speak without the voice mod or hidden identity, but in this situation, the content more than makes up for the identity protection. Plus, the insights she provides is worth the protection.

In effect, the main question addressed is: “Are affiliate networks like Linkshare and Valueclick’s Commission Junction worth their salt?”

I don’t know who Ms. X is, but I’m pretty sure it’s not Beth Kirsch. :0

Hidden voices aside, this is a good listen. I’ll just ask this one question.

Why hide your voice? I think, if you can’t say it openly, why say it at all? It means so much more when it’s attached to something, neh?

Filed under: Affiliate Marketing
  • Jonathan (Trust)

    I've never really understood this whole CPA network vs. traditional networks since they rarely run the same type of offers. I would say there is an extremely low percentage of overlap. CPA networks usually run lead type stuff where tradional networks run more cost per sale type offers. And traditional networks for the most part have different merchants on each network whereas CPA networks usually have the same offers just with different payouts and different levels of service.

    CPA networks are no threat to traditional networks.

  • http://www.thoughtshapers.com Jeff Molander

    CPA networks were built on the backs of traditional affiliate networks. I watched it happen. We all did.

  • Jonathan (Trust)

    And your point? Like I said they're not competition because they don't deal with the same type of offers/merchants. What CPA network has an Office Depot, JCPenney, SportsAuthority, Ebags etc.?

  • Jonathan (Trust)

    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.

  • James

    Well actually I remember way back when a CPA/CPL first started it was on the traditional networks like CJ and Linkshare. at least three years ago becuase I had created a CPL in addition to a CPS campaign for 1 800 Wheelchairs on Linkshare. Following suite with other merchants at the time.

  • Eddie Wilson

    > And your point? Like I said they’re not
    > competition because they don’t deal with the
    > same type of offers/merchants. What CPA
    > network has an Office Depot, JCPenney,
    > SportsAuthority, Ebags etc.?

    What you’re missing is that they’re poaching the best stuff. The multi-product mechants are hard to sell in a lot of merchants.

    The names that actually make money – Netflix, Vonage, etc. – have been poached by the CPA networks.

    My best performing programs in BeFree/CJ/Linkshare always ended up in Adteractive, etc. They know where the money is.

    If there was money in ebags, you’d find that in the networks, too.

    And, I’ve had the heads of more than one big network say that the CPA networks are taking tremendous pieces of their business.

  • Jonathan (Trust)

    “The names that actually make money – Netflix, Vonage, etc. – have been poached by the CPA networks.”

    They’re still at the major networks too. So those programs open up at various CPA networks, not a biggie. Good for affiliates.

    The rev share merchants still go to the traditional networks.

  • Eddie Wilson

    > They’re still at the major networks too. So
    > those programs open up at various CPA
    > networks, not a biggie. Good for affiliates.

    Given that the whole point of this is the CPA networks eating the ASPs alive, OF COURSE thats a biggie.

    When the CPA networks are cannibalizing 90% of the affiliate sales from the networks, how can you pretend it doesn’t matter.

    The big programs, above a relatively small access fee, pay per transaction. So, to them, its no big deal that Linkshare and CJ and getting the tiny bits from the 3 sales a month affiliates.

    But, when the big boys are sending all their traffic to the CPA networks, only the folks who just don’t get it can pretend everything is “fine”.

    The rev share merchants still go to the traditional networks.

  • Jonathan (Trust)

    “When the CPA networks are cannibalizing 90% of the affiliate sales from the networks, how can you pretend it doesn’t matter.”

    What? Where did you come up with that 90% figure and what do you mean by cannibalizing.

  • http://www.cumbrowski.com Carsten Cumbrowski

    Sorry, one of my "blog comment turns blog post" thingies again ;)

    See the post

  • Beth Kirsch

    And you can do rev share in a CPA network. I’m surprised people have been insisting you can’t. You work with the network to figure an effective CPA rate to back into and can even make it a performance CPC hybrid if you’re creative enough.

    Yep, very true. 1800flowers did this for a while until LinkShare enforced their contract.

    I think the bigger issue is that those brands don’t trust the CPA networks to protect them. The right one can, you just need to be careful who you partner with.

    Beth

  • Beth Kirsch

    “The names that actually make money – Netflix, Vonage, etc. – have been poached by the CPA networks.”

    The Adteractive-NetFlix deal goes waaaay, way back, but are you sure the other networks are not pulling the offer from LinkShare and leveraging a VIP payout they are passing along? In this case LinkShare would be getting a piece of the action.

    I whole heartly agree that CPA networks have cherry picked some of the best offers from the affilate networks, but I also think that the affilaite networks understand what happened and are fighting back. Look at what CJ did by stealing Citicards from Metareward. LinkShare has clearly learned too with Discover Card.

    To me the question is, is it too little too late? I’d bet on Steve Denton and his iron clad contract any day of the week to figure out how to punch back hard.

    Beth