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If you have been running a successful campaign for a good length of time, odds are you will start thinking about moving the campaign off the CPA network. Sometimes this is called whitelabeling, direct to merchant, or just plain direct affiliate marketing. Whatever you call it, this can be very profitable for you. It is terrible news for your affiliate managers, but in business you have to look out for yourself.
How do you move to these direct to merchant setups? Well, often you will be “recruited” by certain companies. Somehow word has a way of getting around when you are driving big volume to an offer. Also you can contact companies directly in your niche. You can use an approach like, “I am driving x signups a day your competitor. I can guarantee you at least that many.” Then the price negotiation begins. Obviously if you are cutting out the middleman of the affiliate network, you can earn a higher rate for your clicks and CPA actions. Sometimes you can get easier actions to convert, like page 1 instead of page 2. Sometimes you can be paid on a CPC basis for every click you send them. You like it because you make more money, the merchant likes it because they pay less. It’s really a win-win.
Of course finding these merchants takes work. It’s also a lot more like doing “real business” than some people in Internet businesses like. You have to contact people, arrange conference calls, sell yourself and services, set up billing agreements, work with their tech staff, and so on. Here are some positives and negative for each setup.
Positives:
Less rules and restrictions: When you work directly with a company, you usually work out your own agreement of how you will promote it. You can often use trademarked terms, and have access to the actual landing pages and confirmation pages.
More profit: No brainer here, no 3rd party taking a cut of your commissions.
No middleman: You speak directly with the merchant and become almost partners in their success. Unlike the sometimes adversarial relationship merchants have with affiliates, these relationships are more personal and cooperative.
Negatives:
Bad tracking: Affiliate networks have very sophisticated tracking systems, allowing sub-ids and real time tracking. Merchant systems often don’t have this level of tracking. Some dump all the traffic into one bin with no way to split it out based on source. You might have to wait a day for your stats, if you even get anything useful. This can make running PPC campaigns extremely difficult, and the reason its only really viable for a campaign you have extreme confidence in based on prior real world testing. (The tracking problems may be eliminated if the merchant allows you to host the offer yourself).
No middleman: Yes not having a middleman is both a plus and minus. If their is some kind of dispute, you are on your own to resolve it. Affiliate networks work as the middleman, giving you a certain level of protection if something happens like leads are lost. Sometimes they will pay you regardless of fault. You lose this insurance policy going direct and take on much more risk of lost PPC spends.
Hard to find: It takes a lot of effort on your part to find these deals, and set them up.
So the bottom line is, once you have proven you can convert traffic in a niche, start doing some homework and find a merchant to work with directly. It can be a huge boost to your bottom line as an affiliate. I can speak from experience as I am now doing my largest percentage of revenue this way. Good luck making the jump!
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Awesome informative breakdown.
Thanks so much for this post.Its really a challange you have thrown open for us. i think stepping up in everything one does its very vital for improvement.
Based on you your experience, how much can you boost your payout by going direct and cutting out the affiliate network? What % do you find was going to the network after doing these types of deals?
I’d say I average at least 50% more revenue after moving to a direct deal.
Wow… I was going to guess closer to 30%. 50% is amazing.
wow that is good
Does that 50% come from the higher commissions or do you suspect some leads were being shaved?
Also, do you ever do whitelabels with competing merchants where you bring in the software and sell them on doing an affiliate program altogether, or do you just work with companies who are already predisposed to pay for performance marketing?
You might try some of the exchanges like LeadPoint that give you the ability to white label or host/post your own stuff in.
The big problem with direct merchants is : “bad tracking” … some merchants have statistics inclueded, some no, and thy just send us a monthly report on how many clics and sales we made for them, that’s all.
Greta Article! This is exactly what we did with a campaign a few months ago. We ran a very successful CPL campaign with Viralytics Media (http://www.ViralyticsMedia.com). We found out a site on their network had a very high conversion rate from our account manager at Viralytics Media, then arranged to work directly with them. Viralytics was actually very open to the idea and let us out of our contract so we could work directly with the partner. I would suggest starting with a big network like them and then finding who and what sites work best for you and parsing down and montize from there.
~Jill
The first potential downside that occurred to me is getting ripped off.
Think about it. If you’re driving all kinds of traffic to a few offers on a network and one of the advertisers decides to not pay you for a month’s worth of leads for whatever reason, a good network will pay you out of their own pocked (unless you were doing something against the offer or network terms).
If you don’t have the network between you, they can shut you off at any point and you’ll need a lawyer to get your money out of them.
Yep, that was my “no middleman” point under negatives.