Dear Affiliate, Are You Made Out of Sheep?

Are you an expendable affiliate?

Or a great affiliate?

Only two steps separate you from the best, or the worst:

Step 1: Deliver more revenue than you take in commission.
Step 2: Generate this commission at a profit.

An affiliate offers no value if he neglects Step 1.

His business goes broke if he neglects Step 2.

Every day, hundreds of new affiliates conspire to cheat this founding principle of performance marketing.

And every day, they fail.

Like a herd of hopeless sheep.

If you want to become an indispensable affiliate, there’s one thing you need to understand.

The Value Chain

Affiliates who are capable of delivering paying customers, whilst sustaining their own margins, are a dying breed.

Seriously, newbies…

The numbers are against you.

The majority of affiliates fail to turn any profit on the leads they generate.

They lose money.

A small percentage go on to turn some profit — for themselves.

(Their paymasters are unable to translate those leads in to sales, so the affiliate is cast aside and banned from sending any more. Forever the bridesmaid.)

A tiny percentage of affiliates succeed in producing profit for both parties.

They are the affiliates who understand the Value Chain.

This post is to explain how you can become one of the lucky guys.

The Problem with Optimising For Leads

There are three main models you can use to make money.

PPL — Get paid per lead delivered.
PPS — Get paid per sale delivered.
Revshare — Get a percentage of the customer’s lifetime spend.

By far the most popular model is PPL (pay-per-lead).

Why?

It’s simple.

And easier to optimise.

Leads are faster and cheaper to attract than paying customers.

Breaking the long list of 0s from Conversions adds some signal to your data.

Unfortunately, this signal is what leads so many affiliates astray.

A lead is only ever worth $0.00 — unless it becomes a sale.

Optimising… for LOLs?

Log in to Voluum, or Thrive, or whatever tracker you use.

What do you see?

You see your total revenue generated for the day, and hopefully some profit.

If you are promoting PPL offers, this information is purely theoretical.

But that’s not how most of us treat it.

We treat conversion events as gospel.

They are not merely ‘leads’ to us.

They are hefty transactions where value was added, our methods were vindicated, and everybody got a little richer.

Except that’s rarely what happens.

And too often our leads are about as valuable as a fart in the Hadron Collider.

The truth is…

A business model focused on optimising for leads will only last as long as you can find new suckers to sell them to.

“But Finch! A birdie told me my lead quality is awesome! The advertiser wants more leads!”

Whilst this is great, uplifting news for any affiliate to hear — it shouldn’t be such a surprise.

It certainly shouldn’t be the Email of Reckoning that it is for so many.

You should know exactly how many sales you are delivering.

Because it should be the only campaign variable that makes a difference to every single decision you make.

You have to measure sales.

(I’m afraid this may appear comical advice to anybody but affiliate marketers and Silicon Valley.)

Sales has to be the primary metric that governs how you optimise your campaigns.

That banner with the insane CTR and twice as many leads as your next best creative?

It could be horse shit.

If it doesn’t lead to sales, it’s even worse.

That placement where you’re pausing after 24 hours at a -50% loss?

It could be gold.

A lead priced at $2 might actually be worth $XXX — if it produces a sale.

Most affiliates swear by their data, without asking:

HOW FUCKING USEFUL IS THE DATA?

If that data reveals thousands of conversions with a lifetime value of $0.00, and no way of tracking the sales, then you have to question what exactly you are truly ‘optimising’.

(Because it sounds like choosing whether you want to face left or right, whilst buried firmly in the recess of your own dark arsehole.)

Let me ask you:

  • Are you busy optimising your landing page for more leads — instead of better leads?
  • Are you obsessed with attracting a higher CTR to your banner — instead of more paying customers?
  • Do you cull placements because they have a higher cost-per-lead, regardless of any sales they might produce?

If you answered YES:

How will you ever know that your To Do list is actually worth doing?

Let’s go back to basics.

Step 1: Deliver more revenue than you take in commission.

You can’t measure an increase in revenue if your currency is the theoretical value of a lead.

I’m stating the obvious, but acting on this can have a profound effect on your bottom line.

If nothing else, you will escape the herd.

The irony is that Step 2 — Generate this commission at a profit — will become a lot clearer once you start measuring the correct data.

And so will the sense of control you have over your work.

RECOMMENDED THIS WEEK:

  • In case you missed it, my brand new 2015 edition of Premium Posts is available now. Need a recipe for affiliate success in 2015? You won’t find a single resource that covers as much ground as this. 375 pages of my very best tips and strategies.
  • The Premium Posts 2015 Edition is sponsored by Adsimilis. You know all about Adsims, right? They are one of the best CPA networks in the business. If you run any kind of mobile, dating or sweepstakes… then sign up an affiliate account, ca-ching.

P.S. You can read 40 pages of Premium Posts 2015 for FREE by opting in to my monthly newsletter below:

About the author

Finch
Finch

A 29 year old high school dropout (slash academic failure) who sold his soul to make money from the Internet. This blog follows the successes, fuck-ups and ball gags of my career in affiliate marketing.

2 Comments

Leave a comment
  • I just had exact the same problem with an advertiser, where I brought too many bad quality leads in so that he asked me to stop sending traffic. I would love to have that data to optimize for quality and not for leads, but I only see 2 ways to achieve this:
    1. Some kind of feed / postback about the lead quality in regard to each conversion ID which goes automatically into the tracking system (but the advertiser would have to build it)
    2. Poke the advertiser / AM every day asking for an evaluation and what I have to cut. But this also would demand to send him placement IDs and other data, so the campaigns would be imitable.

    So… What ways do you recommend to “start measuring the correct data”?

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Copyright © 2009-.