There is a bit of confusion and sometimes a negative connotation placed on CPA networks, and their role in affiliate marketing.
Is a CPA network an affiliate, a network, a super affiliate, a sub-ID affiliate, a 2-tier affiliate. It’s enough to make your head spin.
Here’s my take on the whole situation: like any type of affiliate, there are good and bad players, so you’ve got to do your due diligence.
And here is how it all pans out. They are a network AND an affiliate that uses sub-IDs. So they join affiliate programs as an affiliate and then make the offers (from the affiliate programs they’ve joined) available to their network of affiliates.
Some people have mistakenly labeled this as a two-tier arrangement. But the distinction between a sub-ID affiliate and a two-tier affiliate is that the sub-ID affiliate is paid by the main affiliate (CPA network), while a two-tier affiliate is paid directly by the merchant.
And a merchant does not have a relationship with the sub-ID affiliate, but they do interact directly with the two-tier affiliate.
This leads to one of the risks of CPA networks: you don’t know who is promoting you, and the CPA network is not going to tell you, because you’d cut them out of the deal if they did.
That’s why you’ve got to be careful in choosing which networks will be in your affiliate program.
On the upside, everybody is always trying to recruit new affiliates that produce, and when you bring on a CPA network as an affiliate, you’ve got a whole new bunch of affiliates that can move the needle for you.
Since the CPA networks need to be able to pay the same base commission as the merchant in order to effectively recruit, it’s necessary to pay them a bit more than the standard affiliate commission.
This seems to rankle Jeff Molander, as his recent blog posting points to CPA networks as being an unnecessary cost of doing business.
After all, Molander laments, these affiliates would be working for the “street CPA” if not for their promoting the offer through the CPA network.
But I think what’s lost on Jeff is that some affiliates prefer working through the CPA networks for varying reasons, not the least of which is the ability to get paid every 7 days by some CPA networks.
So, while it seems like removing the CPA network layer would make things easier and cheaper, it’s not strictly true.
In the end, an affiliate manager must work out their numbers and what maximum CPA is within their budget. If the economics work when dealing with CPA networks, what’s the problem?