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Ask Shawn Collins: The Story Behind CPA Networks

April 21, 2005 by Shawn Collins

Q: With minimal research, I found 10 firms who offer to promote my site to thousands of publishers on a cost per sale basis. So what am I missing? It seems like they can deliver this new merchant to paradise. What gives?

Shawn CollinsA: Those are CPA networks, and while some have the potential to drive a large volume of leads or sales for you, they also require a higher commission for their efforts.

The reason for this is that they want to be able to pay their affiliates the same as you are paying your affiliates, so you’ve got to pay the standard commission for each transaction they refer, which is passed on to one of their affiliates, plus a vig to them for facilitating the transaction.

One bit of functionality you will need to work with the CPA networks is sub-ID tracking. The reason for this is that they need to be able to identify which of their affiliates referred a transaction, so they can compensate that affiliate.

So for some extra money per transaction, you magically have legions of affiliates running your offer, and you don’t have to hassle with recruiting and managing affiliates.

Not so fast – there is a catch here. While it’s helpful to have somebody else take care of the recruitment and management of the people that promote you, it also puts you in a position where you don’t know who is promoting you and how they are doing it.

So these affiliates never agree to your terms, and it’s wishful thinking to assume they will adhere to your terms. Some CPA networks police the activity of their affiliates, and some do not.

And since you can’t spot check the affiliates in this relationship, since you are not privy to their identities, they may be writing poor, or worse yet, deceitful copy about your offer.

If you forbid trademark bidding, adware, email, etc., it’s a lot more difficult to monitor when you don’t know whom to look after.

It’s got definite benefits and risks – caveat emptor.

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