While promoting ebooks or digital products is one of the first options that new marketers will choose to follow, especially if they’ve bought the same ebook themselves, it can be a fairly difficult tasks to compete against other new and experienced marketers who have the same idea.

Focusing on lead generation or CPA affiliate marketing (cost per action) can be an alternative to entering pay-per-sale affiliate marketing.

I’ve compiled a list of the CPA networks I’ve worked with in a new section “Affiliate Marketing Review” which I’ll be updating when necessary.

If you’ve other questions regarding CPA marketing, or affiliate marketing, you can post them in the comments below.

Check out: Affiliate Network Review

Market Leverage ranks as one of the networks which effectively uses its marketing and branding budget to devastating effect. By contrast, I work with several networks with great affiliates managers, and one corp comm/PR person who isn’t really empowered to do much and/or doesn’t have any real budget to work with.

As networks see affiliate acquisition as part of the affiliate management success formula, doubtless there’ll be more resources channeled towards building a quality affiliate base.

I appreciated Market Leverage’s Digital Media Relations specialist Debby Phillips arranging a discussion with Market Leverage’s founder and CEO Mike Jenkins.

Mike’s certainly savvier than the average network owner (who’s typically a successful affiliate marketer turned network owner). Conducting some research, I’ve found that Mike has been involved in the business management aspects for a number of pretty large listed firms too.

I especially like how he’s constructed a holistic business ecosystem under his PrecisionPlayMedia group – with 3 components – DigitalLeads (an in-house offer production/packaging subsidiary), Market Leverage (the CPA network arm) and InboxBeyond (an email publishing arm) – which is how the top tier CPA networks structure their business.

During the discussion, we also touched on, but haven’t fully resolved the issue of whether the community-building /relationship-building approaches of social marketing via blogs,video will eventually clash head-on with the current incarnation of affiliate marketing, with the mostly shorter emphasis on one-off lead acquisition payout.

It’ll also be interesting to track Market Leverage’s upcoming announcements in the next 2-3 months.

Check out the Friday Podcast below:

For sign up as an affiliate, visit:

–> Market Leverage

Market Leverage is taking the lead when it comes to relationship building and branding with measures like it’s care package campaign to the top affiliate bloggers, and initiatives like Market Leverage TV. Kudos to Mike and his team for getting on the radar with innovative social marketing strategies.

In the course of our discussion, I was wondering — Will affiliate marketing come to blows with social marketing and social media?

From my discussion with affiliate managers, it seems that the majority of affiliate marketers are only interested in the one-time pay-per-lead or pay-per-sale commission structures. Ask them about revenue share or continuity (eg: subscription/membership) type payouts and they aren’t as keen.

With some bizop offers paying out $100-120 per lead or sale, this could trigger the “quick cash” impulse among some affiliates.

On the other hand, savvy merchants and advertisers would’ve grasped the subtleties of lead generation, building up an leads database and reselling the data or marketing offers to that database, and in many scenarios employing both techniques.

In this case, rev share, especially for a CPA-based network will be a moot point.

This is the business model for “affiliate marketing 1.0” if you want to apply a label to it.

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With social marketing and its technologies like video, social networking, blogging, forums, etc, the emphasis is on building the relationship, forming a community, focusing on the long-term – pretty much a complete opposite to “affiliate marketing 1.0”.

Sure you could just take the tech aspects of social media – the viral marketing, the video and audio which massively increase conversions and leave the relationship benefits at the door. But does that strip social marketing of some of its inherent benefits? Do merely become an updated version of “social engineering” as practised by Kevin Mitnick and others?

It’ll be interesting to see how these initiatives pan out.

Tune in to the Friday Podcast tomorrow to check out the interview with Market Leverage founder Mike Jenkins.

I’d expand it to encompass taking on a network role in the merchant-affiliate equation too.

I don’t think any of the roles are necessarily “better”, because all the parts help to complete the system.

Trying to come to the conclusion that one is “better” than the other is like saying a car engine is more important than the tires. In that case, take off one of the tires and try driving off.

I’ve had the opportunity to take up roles in all 3 positions, and its been an educational experience.

I identify with the points several of the affiliates raised about not having to deal with customers, refunds, frustration, etc. At the same time too, once you have several products development cycles and product launches under your belt, and you create systems to deal with not only problems, but solutions at enhancing your business competitiveness, you bring your business to a new level.

I personally like being in the product owner/merchant role, because I like building things (probably partly due to my engineer roots), and having a brand is going to be one of the strongest unique selling propositions (USPs) as affiliate marketing, and the online marketing industry matures in general.

Part of being a successful merchant lies in having realistic expectations.

Here are a couple of my personal experiences:

• Refund rate: Expect a variable rate from 5% to 20%, depending on the quality of your product. The quality of the leads being generated play a part too.
• Customer service expectations: You can’t expect to provide a high ticket item, without providing some sort of customer service. Including starter guides, FAQs to go with your product somewhat mitigates the need for heavy duty customer service, but you will still need some element of support. If you’re being crushed by the weight of email support, why not use an online help desk, customer support ticketing system, or work with outsourcers like AgentsOfValue?
• Low Overall Margins: Jeremy brought up a good point that during the launch of PPC Classroom, unexpected developments pummelled the margins of the product. Having managed a company involved in offline manufacturing , I’d say that online product development is a fraction of what brick-and-mortar manufacturing costs. Just a mould can cost upwards of $20,000. But the advantage is once the prototyping and proof-of-concept capital expenses are incurred, the second and future manufacturing runs are vastly cheaper. In the case of a proven info product, I bet the second and third versions of an established product will be vastly more profitable.

From what I’ve seen, the vast majority of affiliate marketers continue to focus on generating leads and selling those leads to CPA and affiliate networks.

By focusing merely on the front end (or lead acquisition) side of things, you are essentially a traffic arbitrager – acquiring traffic at an inexpensive cost and reselling this traffic to the networks – pocketing the difference as your profit.

Only about 10% of affiliates (typically in the Super Affiliate category) are actively building their brand. The brand can be used to leverage and launch new verticals, or be sold to a larger company or even a venture capitalist or brought to the public markets if it achieves critical mass.

While it’s great to generate immediate profits, staying in the industry long term also requires making some long term plans.

(swiped from my browser tabs).

And here’s the logo for affiliate network, Market Leverage:

Which looks fairly similar.

I’ve seen companies fight it out in the courts when it comes to trademark similarity, and Microsoft certainly rigorously enforces it’s intellectual property.

Watch this space for updates…

If you’ve checked into an affiliate or CPA network control panel, you’ll typically see a “Super Affiliate” or “sub-affiliate recruitment” link with payouts ranging from about 1% to 2% of commissions generated and if you’re lucky, you’ll sometimes see 5% or 10%.

At those levels, is there any real incentive to go out and recruit affiliates/publishers for your network, aside from wanting to build goodwill and possibly a couple of bucks for a nice Friday night dinner?

I understand that margins can be pretty thin, especially since a number of CPA networks are the ultimate traffic arbitragers – they “buy” traffic from you at $1-$1.50 per zip/email submit lead, and attempt to upsell them into an affiliate offer or merchant-direct offer on the backend.

Granted, I haven’t seen the financials of one of these networks yet, but I’m wondering that if you are already relying on affiliates to generate your sales…why not go the extra mile and incentivize them to go out and recruit more affiliates for you? Especially with a decent payout. (we’re not even considering networks which pay you $3 or $5 to recruit an affiliate…).

By my estimations, one out of every 100 affiliates is a top performer (hence the term “top performer”), in this league, you’ll see guys like: Amit Mehta, Ralph “Ruck” Ruckman, Zac Johnson, Bobby “bluebobbo”, Jeremy Palmer, James Martell , Paul “Uber Affiliate” Bourque among others.

But I think the game of getting top affiliates is like going out on a fishing boat. You cast your nets and get a whole bunch of prospective affiliates, but you won’t know who’ll be a top performer until you haul in your catch and sort everyone out.

On that basis, the less-skilled affiliates will weed themselves out and a higher payout won’t matter anyway. On the other hand, a better performing affiliate will be motivated to go out and get results.

I think the bottomline is that in building a network with a long-term business focus, it’s inevitable that you’ll want to have your stakeholders – affiliates who are consciously producing for you, to go out there and evangelize for you too. And it’s going to take more than 1%, 2% or 3% to get them excited…

Oh and another thing, if sub-affiliate recruitment is a focus for any network, why aren’t sub-affiliate recruitment links included at the bottom of each mailing or offer update?

It’d seem like something easy to implement and would bump your recruitment efforts by an easy 5-10% with no additional marketing effort…

A case in point, I’d be promoting web services for a merchant through their in-house affiliate program. It paid about $60 per customer who signed up for their services.

And I discovered a couple of days ago that they’re running the same offer on one of the biggest affiliate networks and paying out $90 a customer.

Boy, I was fuming.

I can understand a $5-10 gap differential when the same offer is listed across various affiliate networks (the networks might be willing to cut out a chunk of their profits to give more to affiliates).

But when there’s a near 50% commission payout gap I feel it unconscionable.

There is an unspoken affiliate marketers’ code of conduct, but there isn’t a formal regulatory body which presides over affiliate networks and merchants.

In other words, who watches the watchmen?

Some might say that in a capitalist society, you are welcome to vote with your feet.

I tend to view business as a series of long term business relationships with real people.

I can only guess that:

• The various marketing/ad departments within the merchant or the network aren’t talking to each other, such that you have a 50% gap in affiliate payouts.
• The service provider faced some stiff competition and upped their payouts in real-time to remain competitive. But wouldn’t you be talking to your in-house team too?
• Affiliates? Who cares.

For the purpose of this post, I prefer not to name the merchant, nor the network, nor the type of service and focus on the core issue instead: Trust.

So does that mean affiliates are going to have to set up a multitude of Google News Alerts to keep track of offers, in addition to promotions, competitive offers and depending on your traffic source – search rankings or PPC campaigns?

Having to look behind my back one less time will certain help me focus more fully on what I want to do: affiliate marketing.

Although I wasn’t bringing in a huge amount of volume to the merchant, I think my contribution was fairly decent.

And now I have to decide if I’m going to bite the bullet and switch to the higher paying program, or choose some alternatives.

I know a number of affiliate network people and affiliates visit this blog, so I’m curious to hear your feedback in the comments.