In this post I am going to talk about CPA affiliate networks and how they fit into performance marketing along with some pros and cons of working with them vs working direct with merchants.
What are CPA Affiliate Networks?
CPA affiliate networks, are also known as “Cost Per Acquisition or Cost Per Action Networks. A CPA Affiliate network is the company or entity between an affiliate and the product owner or merchant, or advertiser. Affiliate join CPA affiliate networks to get access to a network of affiliate offers.
Let’s first talk about what a CPA affiliate network is and how they fit into performance marketing. Basically, we have the merchant (or the advertiser) and they own the products and services that are being sold online, they’re also the company that pay for leads that are generated by affiliates like you for their company.
Once money is exchanged, the advertiser is the one who receives the money. They then pay the network who will then pay all the affiliates responsible for making sales. What a network will do is they’ll take offers or services from advertisers and put them onto a list so that affiliates can get access to those offers. In doing this the network basically becomes the middle-man between the advertiser and the affiliate.
The reason why people work with affiliate networks is the benefits that come with that.
Let’s first talk about the pros of working with an affiliate network. The pros of affiliate networks is that you get access to multiple offers available from different advertisers. The network does all the work and gets the advertisers from around the world into their group so that you as an affiliate can just join the network and have access to hundreds, sometimes thousands of offers to choose from.
A second advantage of being on a network is often getting an affiliate manager. These affiliate managers can be helpful at times but sometimes they’re not very helpful at all. You have to make sure that when you find a good affiliate manager you build a good relationship with them and work with them to find new ideas for your campaigns as you’re actually marketing online.
Another advantage of being on an affiliate network is that they’re supposed to protect you from not getting paid. They typically have a pool of cash or a large cash flow so that they are able to pay affiliates when the advertisers don’t pay, in this industry there are advertisers that definitely do not pay and sometimes this happens when payment processors get frozen or they just kind of jump ship and don’t pay the network’s.
The networks are supposed to protect you from that stuff and they’re supposed to have the cash flow so no matter what, you as an affiliate on their network get paid. Just keep in mind that this isn’t always the case with every network.
Yet another advantage… exclusive offers. Many CPA affiliate networks have exclusive offers that you can get access to and these are offers that are only available if you work through a network, you can’t actually work direct with advertisers in this case because they have a contract in place where the offer is only available through the network. When you’re on a network this is an advantage and sometimes a big one, it all depends on the exclusive offer.
Lastly one of the other advantages of being on a CPA affiliate network is that you’re now part of a community and you receive newsletters and information about the industry (if you’re on a good network). Many networks will send updates and new offers that are available, they’ll keep you posted on what’s happening in the industry too. If you were to work directly with an advertiser, most times you’re not going to see everything that’s happening inside the performance marketing industry because they will only be sending information related directly to their products.
These are some very good examples of what makes a CPA affiliate network good. Now let’s talk about some of the bad sides of CPA affiliate networks and why sometimes bigger affiliates just go direct.
Let’s talk about cons one of the cons of the CPA network is of course that they are the middleman between you and the advertiser, they are always going to get a commission. If you are a large affiliate and you’re spending tons of money every single day and you’re getting thousands of conversions then why would you bother giving 10% or 20% of that to the network when you could just literally go direct to the advertiser? This is something that happens a lot in the industry with bigger affiliates. They’ll just go direct to the advertiser and cut a deal because they have the ability to pull tons of traffic to back it up.
This is one of the big cons of it all, is that once you’re actually focused on one niche the network needs to really step up their game if they’re going to keep you around and going through their network.
Another con is that they do see what everyone else is doing behind the scenes. Some networks and their affiliate managers will actually share what you’re doing with other affiliates. If you find a really sweet traffic source, something that’s really working well then it is possible that your affiliate manager could actually find that out and share it with others in their network. This is unfortunately something that just happens, sometimes on a very regular basis. It helps the network out by giving other affiliates access to successful sources of traffic and such, but it hurts those affiliates who did all the hard work figuring it out. It’s a bit of give and take like that.
Those are a couple of the major risk factors of working with a network. They sometimes just introduce an extra component of risk opposed to an actual safety net. You need to really consider when you’re setting up your affiliate Network account if you’re working with a trusted CPA network or not, someone that has been in the industry for a long time. They should be a network that’s represented at all of the affiliate events, you can see them there yourself meaning they’re not scared to show themselves. They should be on Facebook and and all that stuff.
Let’s first talk about things you should watch out for inside your CPA network. The first risk factor is as soon as you see a network is late on one of your payments that’s a red flag. There’s something going on that you need to find out about by talking to your affiliate manager. Ask them why it’s happening and understand what to expect. If it’s just because your payment method wasn’t updated in the system and all that kind of stuff which is normal then you know what you’re waiting for.
Another risk factor is when they will not budge on a net-30 pay structure or a monthly payment if you’re generating really high amounts of good quality traffic. If they’re not willing to budge to a weekly payment or even sooner sometimes then you are on a network that again is probably experiencing some cash flow problems and you need to look for another network that is willing to accommodate faster payments for you.
Some of the bigger advertisers will only pay net 30 and that is why this is an advantage. To work with a cpa network network that will front you the cash while they’re waiting for the advertiser to pay them is a great thing.
Something else to look for in your network is if there’s constant tracking issues as this means they are sloppy. If they are setting up offers but not properly setting up tracking and testing for each offer before they give them to affiliates then they’re sloppy and the tracking is not working which could also mean they might be “shaving” or “throttling”. Sometimes you’ll notice that conversions you get might not match the tracking figured. It’s possible that sometimes a network may shave, even the advertisers have the ability to do this but there’s really no advantage to either of them to do this which means it’s not likely the case. This is typically a big conspiracy by affiliates thinking that they’re getting shaved but most of the time they’re not really getting shaved at all. It usually comes down to a tracking issue.
When looking for your network what you want to do is go online and look for networks that are truly willing to help you, they rely on affiliates just as much as you rely on them. If you’re a new affiliate and you have an affiliate manager that you like then there’s no reason for you to leave unless the network as a whole is starting to show signs of weakness. There’s tons of extremely popular networks out there and there’s many of them that you can trust, just go online and hunt for them. Look on Facebook, search around and you’ll see these networks for yourself. Many of the major groups on Facebook with active members will be a great way to get started as it’s community driven and more trustworthy.
Hopefully this has helped you in understanding how cpa affiliate networks fit into the grand scheme between the advertiser and the affiliate. There are good things and bad things about a network, I work with many cpa affiliate networks toda and there’s absolutely nothing wrong with working on a network. You just have to know when it’s time to continue on with a network and when it’s time to go direct to an advertiser and work something out with them.