(potentially?) controversial topic - Sponsors vs Affiliates

[CorbinFisher_BD]

And when the day comes for you to kick out the stated 95% of your affiliates, what will become of their existing link codes that for various reasons aren't taken down? I certainly hope they go 404. It would look mighty strange to accept and profit off of affiliate traffic from the very affiliates you just shit all over.

After making the announcement at the Gay Phoenix Forum, quite openly posting about the upcoming changes on the boards, sending out numerous emails to all affiliates before the changes are made, and sending out press releases, all over the course of 4 months leading up to the point any affiliate's account is terminated...

... if someone is unaware of it all and pays so little attention to the point they still have our affiliate links up... they definitely weren't deserving of 50%. Not with that lack of attentiveness and activity behind whatever they were up to.

[Squirt]

After making the announcement at the Gay Phoenix Forum, quite openly posting about the upcoming changes on the boards, sending out numerous emails to all affiliates before the changes are made, and sending out press releases, all over the course of 4 months leading up to the point any affiliate's account is terminated...

... if someone is unaware of it all and pays so little attention to the point they still have our affiliate links up... they definitely weren't deserving of 50%. Not with that lack of attentiveness and activity behind whatever they were up to.

Right and I bet you feel that you deserve the traffic they send after you terminate their codes and they unknowingly keep sending traffic to you... you will say tough luck, even though you're doing no work to bring in the traffic and now getting 100% of the sale... but let me guess... you deserve it right :tubgirl:

[CorbinFisher_BD]

Right and I bet you feel that you deserve the traffic they send after you terminate their codes and they unknowingly keep sending traffic to you... you will say tough luck, even though you're doing no work to bring in the traffic and now getting 100% of the sale... but let me guess... you deserve it right :tubgirl:

We don't want the traffic. Just like we don't want traffic from affiliates terminated for other reasons (such has being password-sharing sites, sites promoting illegal sites, spammers, etc).

It's called "Suspend Without Redirect", and is a nifty little feature CCBill offers.

When a surfer clicks on a link belonging to a suspended affiliate account, they are not sent to the original sponsor site.

You'll have to ask CCBill where those folks are sent. Do you want em?

[gaystoryman]

An interesting thread for sure. It's even brought me out of lurker mode that I have been in lately around here.

I have a problem though with all this talk about affiliates, partners and the other quaint terms being bandied about. To begin with, I am not a partner to anyone here or any company I try to sell memberships for. I am an independent contractor at best, but I am my own boss. I run my own business, and as such it is my obligation to make ME money first, and not Lee or anyone else.

If by chance my selling their product enables them to make money, hey great. That's free enterprise and that is what it is all about. Individual business making money. I know that if I am looking for a new car, I will go to the dealership that offers me the best deal on price.

Odds are, those dealerships that time in and time again sell more cars from Ford or whoever, also get a better discount than the local corner car lot will get. Simply because they sell more.

That is what business is about. The more you sell, the better bargaining position you are in to get better prices from your suppliers. You aren't a partner to them, you are a seller.

A partner shares in the liabilities, the decision making process of any business. Even shareholders have more say in a company than some independent retailer does. They at least have a list of other shareholders, have a financial stake in the business and as such have greater input.

To assume that affiliates who sell memberships or whatever should be paid more or less is a company decision. To make a structure like any other business is not only reasonable, but economically viable. To continue to pay any tom dick and harry outrgeous oercentages is detrimental to the health of the business itself. To compete one has to make money. To not place a graduating scale is just poor business. What incentive is there for any contracter to do more if they can't obtain more?

Not sure how it works in the states but milk up here is a good example. All retailers pay the same price for their milk. Doesn't matter if they buy 10 gallons a day or 1000 gallons a day. What matters though is that they pay the same base price. Then depending on what they actually sell, they get rebates. Commissions. The more they sell the more the retailer makes. Simple and to the point.

Why we think that because we are selling porn business should be stood on its ear? If an affiliate sells 1 a day or 30 a day, the rate he receives is the same in todays model. I think what Corbinfisher and Lee are saying is that there should be a scale with reasonable levels of payment to the sellers. If the guy selling 1 a day gets X rate, then the guy selling 30 a day should get a better rate.

No different than banks. They give their best loan rates to those who have the assetts, who do the most business with them. The average daily deposit wage slave sure doesn't get that prime less 1 rate. So why should he just becase he is selling a porn membership?

This is a business last time I checked. While it is open to anyone, the suppliers in this industry should set an example. By giving outrageous payouts, they risk their own economic viability. When someone hires a contracter to do a job, and they don't perform they get fired. In our model today, we reward them with higher payouts.

My own personal business model is slightly different. To me I use affiliates to round out my financial objectives. It is gravy for me. If I sell 1 or 1000 it is simply added revenue, something I put in as an after sale. Sort of like adding tums for sale next to the hot chili meal I offer.

[Squirt]

We don't want the traffic. Just like we don't want traffic from affiliates terminated for other reasons (such has being password-sharing sites, sites promoting illegal sites, spammers, etc).

It's called "Suspend Without Redirect", and is a nifty little feature CCBill offers.

When a surfer clicks on a link belonging to a suspended affiliate account, they are not sent to the original sponsor site.

You'll have to ask CCBill where those folks are sent. Do you want em?

I'm not interested in working with you at this point in time and I don't think that would be fair to those affiliate either :fool: But thank you for thinking of me... it makes me feels warm and fuzzy

[Xstr8guy]

I've been holding my tongue because I think there is at least a little merit in this discussion. But comparing every affiliate to JUB is absolutely INSANE! They are the exception... not the rule. Instead of pooping on the little guy, why not pay JUB 90% commission? It's the same logic.

[CorbinFisher_BD]

I've been holding my tongue because I think there is at least a little merit in this discussion. But comparing every affiliate to JUB is absolutely INSANE! They are the exception... not the rule. Instead of pooping on the little guy, why not pay JUB 90% commission? It's the same logic.

JUB is definitely the exception, I agree. But there are a number of affiliates out there just like them when it comes to the nature of traffic they refer (with regards to both quantity and quality) and the extent to which their own sites are developed. Certainly not everyone can be expected to be a JUB, or BananaGuide or Queerclick or the like.

You mentioned "Why not pay JUB 90% commission?" but that's kind of exactly what I'm getting at. Why should 50% be the base starting point, and then it all goes up from there?

Why not something like what Lee mentioned - start at 30% and slide up to 50% depending on performance? Why is 50% the base amount?

I think there are many affiliates worthy of more than 50%, just as I think there are money deserving of far less. But commissions only slide upwards due to sponsors competing with one another for the webmaster vote, as opposed to it being a reflection of real value delivered.

[deanb]

Why not something like what Lee mentioned - start at 30% and slide up to 50% depending on performance? Why is 50% the base amount?

or why not just tell those affiliates

We don't want the traffic.

[Squirt]

Why not something like what Lee mentioned - start at 30% and slide up to 50% depending on performance? Why is 50% the base amount?

This was already answered

If you start paying people less... to work harder.... and still get paid less... then out of desperation they will decimate the industry just to make enough sales just to maintain their current lifestyle. Chargebacks, credits, angry surfers.

The logic you and Lee use is flawed.

What would work is sites charging more for a membership and lowering the commission % so the affiliate is paid the same.... jeez I thought you guys would have worked that out already.

[CorbinFisher_BD]

or why not just tell those affiliates

In a sense, we don't.

With an unlimited number of affiliates, the ability to keep track of each one is nonexistent. Sponsors assume a great deal of liability through their affiliates.

- Is an affiliate promoting CP on the same site as your own?
- Is an affiliate spamming people to get them to your site or their other sponsors' sites?
- Is an affiliate violating copyrights?
- Is an affiliate misrepresenting your site, or misleading surfers in directing them to your site?
- Is an affiliate engaging in activity that might cause surfers to associate you, the sponsor, with negative things (such as popups, misleading links, spyware, adware, etc).

Granted, all of the above is a totally seperate issue from the issue of value and worth as a traffic source, but it's all the more reasons sponsors need be extremely aware of who is promoting them, as well as execute considerable control over access to their affiliate program.

In our particular case, we looked at a number of questions in gauging who we wanted to keep on as affiliates and who would go when we shrank it. Factors included:

- The manner in which an affiliate promotes us (for instance, an affiliate who puts great effort in to what they do, is highly regarded by their loyal surfers, and contributes to the positive image of our brand is highly valuable, even if the sum of sales they refer isn't that great. There are many affiliate webmasters here on GWW, for example, that aren't in our top 100 affiliates but that I still will keep on board because I know they are very good at what they do, have a great deal of potential, and are out there presenting us honestly and in a positive manner)
- The volume of sales referred
- Where those sales are coming from
- How such a change would affect remaining affiliates (primarily by redistributing the 5% of sales terminated affiliates were responsible for among them)
- Being able to invest greater time and energy in catering to the remaining affiliates and expand upon and even improve the effectiveness of affiliates who've shown themselves to already be highly effective
- Use funds no longer being paid out in affiliate commissions for direct-to-consumer marketing (advertising, promotional events, etc).

We're extremely excited about the change.

But at the core of the decision was sitting back and taking a look at all of our affiliates and saying "OK... are all of these webmasters worthy of 50% of each sale they refer? Do they contribute in a manner proportional to that?"

Obviously the conclusion led to the ultimate decision to shrink our affiliate program and retain a select few affiliates.

[CorbinFisher_BD]

If you start paying people less... to work harder.... and still get paid less... then out of desperation they will decimate the industry just to make enough sales just to maintain their current lifestyle. Chargebacks, credits, angry surfers.

Oh I absolutely agree, which is why I think changes to the affiliate/sponsor model can't go the route of decreasing commissions and starting from there. It's too late for that to work. Because the 50%+/HugePPS model has already taken root, it'd be impossible to revert to anything different. Which is unfortunate, I feel. I think it's unfortunate things ever got to the point that 50% was the base. Because that cornered the industry in to a bad position.

What would work is sites charging more for a membership and lowering the commission % so the affiliate is paid the same.... jeez I thought you guys would have worked that out already.

But see that's another case of catering to affiliates at the expense of surfers, when surfers should be with whom ultimate loyalties lay. It's their money that both sponsors and affiliates are getting. It works in everyone's favor to treat them right.

Paying massive PPS for a surfer's signup, then subjecting that surfer to popups, exits, upsells, etc etc etc and god knows what else need be in place to enable a sponsor to pay out a massive PPS sum isn't a good thing.

[HotMaleVideos]

Well, this is a bit of a cluster.

It's reasonable to want to purge unprofitable relationships. All else being equal, dropping dead weight in itself is not a problem, as long as it's really dead weight and they cost more to maintain than they earn. I would stay out of the business of judging the "quality" of an affiliate as long as they are performing ethically/legally, and stick to whether they are making red or black ink.

A system of rewarding the best affiliates is fine also, but wouldn't take the position that 50% is a reward. 50/50 is a statement that your success is tied together, and that one party isn't there just to make the other party rich. If the latter notion was attractive, those here working for themselves would have regular 9-5 jobs instead.

There are sponsors handing out (a paltry) 20%. One time, a rep mentioned wanting more traffic from me. Heh. As if the thousands they earn every month from their 80% weren’t enough, they wanted even more. My earnings from them are only in the hundreds. I have expenses too, and investing more would mean diminishing returns, if not outright lower returns, so it's no dice at 20%. The request was insulting. But I digress. They limit their success by being that tight. Not because I expect more, but because it's plain math and I'm not interested in someone else so blatantly profitting more from my investment than I am. That's an ethical stance, not one of entitlement.

My point is that there is also a line to draw as far as expectations from affiliates go. Just make sure you're on the right side of it and not pinching pennies too tightly.

Xstr8guy beat me to it, but I was also going to say that JUB is very exceptional, not a rule. So I certainly hope they're not anybody's measuring stick of what constitutes a 50%-caliber performer. If they are, man, that person is really cheap.

How would new webmasters make any ground if the entire field turned this exclusionary on the whole? Seems like once "exclusive" profits start to fall, the requirements would just eventually drop again to get more people in. Rinse and repeat... can't put toothpaste back in the tube, so it's mostly a rhetorical debate anyway.

[Becky]

BD said it perfectly when he referenced that this is an affiliate pressured market and not a customer pressured market. The history of the industry has been to cater to affiliates while fucking over customers. And it will come back to haunt all of us. Falling member values, distrust from potential customers, immediate cancellations before even viewing the members areas, all of these things have and will continue to affect the industry. Surprisingly, payouts only go up when the overall value of traffic continues to decline.

[Squirt]

BD said it perfectly when he referenced that this is an affiliate pressured market and not a customer pressured market. The history of the industry has been to cater to affiliates while fucking over customers. And it will come back to haunt all of us. Falling member values, distrust from potential customers, immediate cancellations before even viewing the members areas, all of these things have and will continue to affect the industry. Surprisingly, payouts only go up when the overall value of traffic continues to decline.

This is why it's important for sites to diversify their traffic portfolio.

Any site who relies only on, dare I say even predominately, affiliates for traffic, should rethink their market strategy.

The big program history of the industry has been to cater to affiliates while shaving them and over promising to the customer :baa:

[Becky]

Any site who relies only on, dare I say even predominately, affiliates for traffic, should rethink their market strategy.

I absolutely agree. That is a position that ARS has been in since inception, almost 100% affiliate traffic. Now that I've taken over ownership, I am working on changing that marketing strategy. I can't continue to ride the attrition wave of affiliates and feel good about the long term successes of ARS. Internal traffic generation has become very important to me. It's been years since I worked on the affiliate side of the industry, hopefully things haven't changed too much. At least I keep up with traffic generation methods so I don't have to re-learn everything