I was talking to Josh Todd earlier today and was asking him about the practice of networks asking their affiliates to set up a 2nd affiliate account and bypass the affiliate who referred them. It was probably one of the inspirations for his post “Are your referral commissions being shaved?”
Having been an affiliate manager in Josh’s TriFoxMedia CPA network for a time as well as having helped a couple of CPA networks refine their affiliate recruitment and development strategies over the years, I have some insight into how network works, the margins they work on, the cash floats (the difference between what they pay out to you and what they are owed by the advertiser) and some of the dirty stuff that goes down.
Still, it’s one thing to be aware of this, and another thing to have an affiliate manager be all friendly and appear to be a buddy, then know that behind your back they’re asking the affiliates you’ve referred in to set up a 2nd account and go direct with the network.
I get the point that some networks are working on a 5-10% margin and the 1-2% payout they’re making to you can make a difference in the bumps they’re able to give.
At the same time too, I’m investing my time to talk to my buddies who’re already doing big volume with their existing network and are happy. So getting them to add your offer to their rotation takes some convincing. If you’re undermining my time and effort within days of me referring them to you, my questions to you are:
- Do you think my buddies wouldn’t tell me what’s going on?
- Do you think you can get away with this?
- Do you think I will ever send you another referral?
The answers aren’t that hard to figure out.
Here’s another “funny” incident. Another buddy was generating $1,000 to $1,500 per day off a particular rebill offer. In the last couple of weeks his earnings have dropped to $100-$200 per day. He probably shouldn’t have been relying on this one campaign for 90% of his income. So now with a family he’s got to tighten his belt quite tightly.
If anything he’s boosted his marketing budget, optimized his landing pages, added more pop-ups, just everything short of throwing the kitchen sink at the campaign.
Yet another story. An AM I’ve known for about 2 years and talk with regularly was pulling offer sheets, bumping payouts for me last week and asking if I’d be at ASE because it’d be a good chance to meet up. I get an email that she’s decided to go back to school and I have a new AM assigned. “Go back to school”? Is that affiliate marketing code for something else?
In short, I think CPA marketing is exciting because you get a bunch of curveballs thrown at you every which way. Being able to adapt to changes is part of the game.
At the same time, if you’re not setting up your own business or offers and shifting some of the control back to yourself, some of the changes can hurt. A lot.