From Affiliate to Affiliate Network

Today is the first guest post I’ve ever had on ZJ blog, and I wanted to make sure it was a good one, so I got in contact with my good friend Ruck from Convert2Media. When I was talking with Ruck, I wanted to see if he would like to share his advice and walk us through his journey from being an affiliate, to running his own affiliate network. I’m seeing some really great things over at Convert2Media and appreciate that Ruck took the time to write up this post. Enjoy!

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Convert2Media was officially launched in May 2008. Our network was initially created out of two things, frustration and each member wanting something more on the actual business side of things rather than just being a marketer. Our frustration actually stemmed from treatments we received as affiliates. It wasn’t because that we felt we were being treated unfairly but it was the fact that when we wanted help (real help) about an offer, we couldn’t get it. Looking around the industry all I could see was big money companies hiring whatever they could to keep up with the growth.

I noticed a fraction of a weakness in all this. What I saw was that the majority of cpa marketers were not actually being helped in reaching their full potentials and maximizing their returns on investments. In a nutshell, the large cpa networks that are online today make the growth of our network happen even faster by not hiring knowledgeable marketers. They hire people, train them as Affiliate Managers and that’s that.

With Convert2Media we went knowing that our knowledge as marketers make actually make the difference in success or failure. Luckily for us, our instincts were right. To give you a general example of what I really mean:

Affiliates become even more paranoid each day that a network is screwing them by shaving, scrubbing or flat out stealing their campaigns. One thing we had going for us and a part of the market share of publishers that we wanted to attack were the ones that actually were NOT working online full time. This may sound weird to some but for our publishers, they know that we have been there every step of the way for them. A day does not go by where I dont view at least a couple of dozen landing pages. It’s as simple as that. With 99% of the networks out there you have affiliates hiding their traffic sources. With us, you have affiliates asking us, showing us and ultimately trusting us that we are going to help you. We are not successful unless our publishers are successful.

Mistakes along the way:

By far the largest mistake we have made was not initially gagging the amount of fraud there is. Having come from a blackhat seo and incentive marketing background, I also put myself out there in moderating a few of the blackhat forums over the years. Unfortunately along the way, I must have attracted the wrong element. In our initial launch months we thought we were going great in the dating niche. We could not be any further from the truth. At the end of the month when payday came we found that a ton of leads had been incentivized. It was so bad that we actually got canned from a very well known network that we had been partnering with. It was at this time we sat down and took a real hard look at what happened and how to prevent it. We designed a plan that if we actually wanted to compete as a CPA Affiliate Network then we had to do everything better than anyone else. I immediately turned to people I knew in the industry and we put everything learned into practice. Other than the occasional reversal of leads we have not suffered any major issues since then. One thing is because we gauge an application HEAVILY. If it looks like crap and you make 50K a day, we deny. If you follow up on a denial then we start the review and approval process but for the most part, we are extremely tough on pending applications.

Money Management:

This is actually a large headache. As an affiliate you may not know the amount of money that is exchanged behind the scenes. Most high volume publishers demand weekly payments. With just being a few months old we have had to adjust what offers to go after, aggressively seek the best terms and ultimately gauge and monitor the traffic being sent by publishers. At times it can be extremely chaotic especially with offers that just blow up. In the end though we did not come into this business without all of us being educated in money management. We actually have just hired another accountant to help with the books while we put our strengths in campaign development and managing into overdrive.

Non-Payment:

Probably the biggest risk in the business is not getting paid so you can pay. There are so many aspects to look at and so many problems that can arise. A lot of advertisers in the cpa industry were one time affiliates who have expanded into creating their own offers. Sometimes this is a problem when they try sneaking on you. Non payment, companies go belly-up overnight. In a blink of an eye, any one of these issues can happen and it does. With us we take a really hard stance approach. Even though we utilize Direct Track (moving software soon) we do not cross publish offers. You wont see 500 offers in our network ever. If you do it’s because we grew big enough that publishers are running them. In managing our publishers we dont want to waste their time by pushing the latest and greatest offer onto them until we know it is in fact doing well. You will never see us go get offer we heard is doing well with us putting a promotional plan of action into place. With all the managing and support we provide in tweaking our publishers campaigns, we dont have time to go seek out crap. Staying away from crap offers is a just another way of keeping yourself out of a position of NOT being paid.

Margins:

This is not tough at all for us. We don’t have 45 people in our company with names like Business Development Manager, Senior Managing Consultant and things like that. Nothing against that but it is really lame when all it comes down to is taking a publisher from zero to hero. With us being a smaller and more publisher development focused network we don’t have to take 15 or 20 percent. Hell, when we make 8-10% we jump with joy but at 5-6% we are happy. That may sound odd too when you consider that we payout a 5% referral commission on anyone you refer and is accepted. At 6% we make a 1% margin which would probably make most of the larger networks pass out. We can operate that way though because we know everyone that is coming in, everyone that was referred, what they are making and this helps to operate around it.

If it was not for affiliates then this business model would not exist. Being a high volume publisher on a number of networks over the last couple of years I am completely happy taking a 1% margin over affiliates of whom I helped get the campaign profitable in the first place. A year ago I was managing my own campaigns and now we are managing almost 300 active ones.  Publishers make you successful and the least you could do is offer them the most money possible.

Day To Day Operations:

Being initially based in Utah we are now in the middle of developing our offices in Florida. We’ve learned to take our books and everything regarding our business on the road with the many events and shows we attend. With having a central office in Florida we will be able to be better focused at the same time with all aspects of the business. For the most part our business is mainly helping publishers each day. Since we like to talk, it kind of works out. Publishers simply say my campaign sucks and we go right into helping them optimizing it. Not many networks have people trained to do that.

The Future:

Convert2Media aims to grow as fast as the markets allow us. We are not out there to blow up as some large corporation. We are perfectly happy where we are at. Some things in development are live conferencing for publishers as well as an IRC chat room where affiliates can bounce ideas of one another. As a matter of fact, I know some of our publishers who have already created partnerships with one another. We will continue to refine ourselves as a network. One thing that we do is a critique each other every day. No matter what, not a day goes by where one of us does not critique another about something they may have missed or performed poorly on. With the continuation of refining ourselves we can only hope to grow as a company and an affiliate network.

We try to attend an event every month. I can tell you personally that in 2009 I am already scheduled for at least one event or conference per month. This allows us to network with publishers, advertisers, agencies and other networks. A year ago I would have never attended a conference as an affiliate marketer. It was just something I was not interested in. This year I am scheduled already for 12. Times change in this industry and I can say that networking has been one of the biggest catalysts in allowing our network to grow and us to pick up on new things as network owners.

I fully encourage anyone that wants to start an affiliate network to study and talk to as many people as you can before doing so. Make sure you have a passion (and I do mean passion) for helping others. A network is a ton of work no matter how big or small. It consumes you. It works out pretty well though when all you want to do is build a bigger business. Dont ever forget that it is the people WITHIN your business that make that possible.

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Want to start making more money and work with Ruck directly? You can join his affiliate network at Convert2Media.