Affiliates Networks Battle for Your Business
It’s no surprise that business within the affiliate networks industry is cut throat and if you don’t have all areas covered, you could be wiped out over night. It’s a continuing battle for networks to offer the best payouts, while keeping their margins and beating the competition. Today we are going to take a look at how an extremely popular weight loss offer is making affiliates several thousands of dollars daily, and smaller margins for the networks themselves.
The offer we will be talking about it, “Easy Weight Loss Tea”. If you haven’t run or seen this offer in the past several months, then you have been missing out big time and must not pay attention to what is going on in the industry. For those of you that don’t know.. the Easy Weight Loss Tea offer is one of the most advertised weight loss programs out there, and only costs a small $4.95 shipping fee from the consumer for the affiliate to then earn a high $36+ commission on each lead.
Since the payout on the offer is so high, it leaves a lot of potential for how it can be promoted, while still posting a profit. We will leave talking about promotion of Easy Weight Loss Tea, Acai and other weight loss offers for another time. Instead, let’s focus on the different networks hosting this offer and what they are paying out.
CX Digital $36.00
Motive Interactive $33.75
As you can see, there is only a $4 difference between the low and high public rates offered by these different networks. What I’m hearing, is that most networks are getting around $42-$44 direct on this offer… meaning if they are paying out $38 on the lead, they would make a $6 profit (if they are getting $44). While these are only the public rates, and can probably get an increase with volume… it’s still a big effect on your overall campaign if you are sending 100 leads (at public rate) to Convert2Media vs. CX Digital… roughly a $400 difference.
When I was at AdTech NY a couple weeks ago, I met up with Ruck from Convert2Media… then a few days later, I got an email from his network saying they had added “Easy Weight Loss Tea” and paying $40 a lead. This was the highest public rate I had seen on the offer yet. I thought it was really cool that they would cut their margins so tightly, so they could accommodate to their affiliates and offer more than any other network. The same applies with Ads4Dough at the $39 rate.
Everyone knows NeverBlue, ClickBooth and CX Digital are huge established companies… but the smaller networks are realizing the potential in offering affiliates higher commissions and more personal services to make them succeed. While it may only seem like a $1 or $2 difference in payout… look at it in the huge scheme of a network. If network A is paying out $40 per lead and getting $42, and network B is paying out $36 and getting the same $42 for every lead pushed through their network… that is a 5% profit margin for network A… and a 15% profit margin for B. Network A is risking a lot more and profiting less by offering their affiliates the higher payout than network B. What I’m getting at is… these networks are pushing thousands of leads day and if they pay out $500,000 a month in commissions to affiliates, they may only be making $25,000 profit.
How do you feel when you see networks promoting the same exact offers at higher and lower payouts? Also, are you taking to the time to signup for these smaller networks, over the bigger names? You may be missing out!
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19 Replies to “Affiliates Networks Battle for Your Business”
Don't forget that even if they have a higher payout they might scrub enough leads to make up for the lower margin. This happens every day.
Being pretty new to affiliate marketing I feel the ones that have proven they can track and reward purchases in the past are the ones I want to work with next. Also if an affiliate starts and then cancels campaigns quickly that makes it very difficult to build sites and make money on campaigns. Pepperjam is my favorite at this time.
who do you use for your large volume zac?
I think to choice is obvious – why NOT go for the higher paying network, even if theyre smaller, as long as they deliver the goods (money) then I will be going where the money is, unless the larger established network offers a good reason for me to give them an extra 4 dollars of the commission, I'm sticking with the little guy
For sure – I just hope that it doesn't turn into a case of everyones undercutting everyone to get the business, and then the service they offer starts to suffer because they aren't making enough money to cover their costs
I came here to say this.
Always split test your offers people. Always.
I think you just nailed a big shift that is coming. The smaller guys with less overhead could potentiall dominate the larger networks due to higher payouts.
I find smaller networks are being more honest and open about what they are getting paid, they’re answering emails & calls on the weekend, they’re offering drastically higher payouts and most of them are affiliates so they are knowledgeable on the subject, unlike the clueless AMs at the big dogs.
The only problem that exists for smaller networks is their ability to cover large weekly wires. One of the networks you listed has the high payouts due to low overhead and small size, but due to that small size they cannot cover six-figure weekly wires which is what I need. If a smaller network can pay those large weekly wires, I am going with them. (Ads4Dough for example)
For the big networks it’s wake up call time. The days of CX digital being able to offer a $36 payout on an offer they’re getting $44 on are over. It just doesn’t make sense for the affiliate anymore.
Street payout is meaningless. But embarassing for cx nonetheless
Payouts in general are meaningless. Test all 6 and see where you get the highest EPC. If you are picking offers based on payout alone, you are making a huge mistake. After your test you may find that the one with the lowest payout gets the highest EPC, you never know.
For me though, service is more important and having educated affiliate managers.Nothing worse then calling your AM and they have no clue about what your asking them when you ask them a tracking question. Affiliate networks need to realize that there are more and more people jumping on the affiliate marketing band wagon and if they new the in's and outs on how to actually make money money doing what we do they could make a lot more money simply by helping to educate new affiliates.
Like for example, why not have tutorial videos on how there set up works.
Affiliate networks should also have basic tutorials on how to make money promoting offers and different ways to do it. It would really increase there bottom lines. I would be willing to be that out of 100 affiliate that's join a network, maybe 10 know what there doing, and out of that 10 maybe one is uber good at it.
Lets say Zac that neverblue ads hires you to build a teaching program of some sort for them covering the different ways to build affiliate marketing campaigns. They can turn there numbers around alot faster and increase there payouts to affiliates simple because there volume increased and attract more affiliate to there network.
What do you think about that?
Another great article Zach!
<a class="replyTo" href="#comment-92094" rel="nofollow">@Collin – Affiliate Marketing:
Colin, definitely. I'm seeing some of the smaller networks provide a lot more information and even their own blogs to help affiliates grow in size. It's a shame more networks aren't doing this. It would only help everyone out.
Maybe one day someone will read this article of yours and these comments and act on this. I would love to see more people succeed in affiliate marketing and that information should come from the networks (and blogs like yours 🙂
I can’t wait to have your post about how to promote these weight loss offers, Zac.
When can I expect it?
Hey Zac, How do you find out about good affiliate offers that are circulating?
Hey Peter, I signed up for your network to check you guys out. Look forward to possibly working with you guys.
I agree with the term 'uber affiliate' 🙂
BTW; Your top commentator list is not working?
Yes.. it is a bit revolutionary. We see the margins continuing to be squeezed further and further perhaps to the point of shaking out some players. The network business is becoming quickly commoditized. We also see more vertical specialization among the networks – for example, ours does only dating.
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