Pros And Cons Of Running Offers Directly
As an affiliate who also works as a consultant for a couple of advertisers, you're definitely right in recommending that…
Your ability to assess risks could make or break your future in this industry.
We all love to play down the risk attached to what we do. We naively expect to be paid for our leads and sales, whatever the circumstances, no matter what goes wrong further up the food chain.
Most affiliates only give a damn about risk assessment when it progresses to the stage of damage limitation. And that’s when you’ll start reading blog posts and threads about it.
Nobody wants to read about the steps you can take to keep your Facebook Ads account in tact. But everybody wants to read posts like “My Facebook Account Just Got Banned” or “This little bell-end won’t pay me“. Some affiliates are quite happy to pump thousands of leads in to small-time networks, without waiting for the first payment to turn black. It’s not cool to consider pausing a profitable campaign, right?
Well let me tell you, it’s even less cool when you invest everything you have only to get burnt by a bunch of scumbags who’ll find any reason not to pay you. Thankfully this hasn’t happened to me yet. But if you’re not careful, it could easily happen to you.
For those who worry about not getting paid, joining an affiliate network is often touted as the smart thing to do. Affiliate networks earn their slice of your revenue by taking on that extra risk. There’s the fear that by running an offer directly through the merchant, you open yourself up to the increased likelihood of getting stiffed.
As somebody who runs traffic both directly and via networks, I thought I’d throw in my two cents for the hell of it.
Running an offer directly is always going to be more lucrative at face value. The margin is all yours, and you should find yourself losing more leads in the shuffle. Less brokering means less tracking and in a picturesque world with little unicorns running free…less scrubbing. That’s more money to line your wallet with.
But only at face value.
You’re going to find it challenging to convince many of the big merchants out there to start paying you weekly off the bat. As most tuned-in affiliates know, cashflow is king. It’s better to be running solidly for 30 days a month than to find something that works then have to put the breaks on because you rinsed your wife’s entire savings one fine afternoon.
It can actually be more lucrative to run consistent traffic at a lower ROI, if you know that you’re getting paid every 7 days.
And even if a merchant DOES promise you weekly payments, from my experience, this is only as good as being told you have an invitation to send more invoices to their accounting department. Whether they get paid on time or not is a different ball game altogether.
Make sure you don’t make my schoolboy error of issuing an invoice with the standard payment terms of 28 days. Weeklies, my arse! No self respecting accountant is going to file your payment any sooner than they have to.
The most important advice I can give to anybody who plans to run traffic directly is to stay as transparent as you can possibly be. Once you have an account manager, you need to build a relationship with them and make sure your campaigns are squeaky clean from top to toe.
This isn’t purely for the sake of being a good little boy, but also because you can actually learn a lot about the shit you’re promoting. I run directly with a few dating companies and speaking to their internal people is like reading an entire private catalogue of OKCupid posts.
As helpful as affiliate managers can be, they have to spread their knowledge over hundreds of different offers. Much of the time, they’re basing their “what’s hot” recommendations on EPCs and revenue. By speaking directly to merchants, you can cut the crap and find out what’s actually in demand.
So…
Are the payouts significantly higher by running directly? You better believe they are. I know of one dating offer that fetches $5/lead through CPA networks. But by running it directly, I’ve seen payouts as high as $11/lead with an additional bonus for every registration that converts to a sale. When you’re delivering quality traffic, that adds up to the kind of EPCs that you simply don’t get on affiliate networks.
Ultimately, it’s only worth going direct if you have the two attributes that matter most; cashflow and quality traffic. The kind of traffic that backs out for the merchant and has them begging for more. It’s definitely worth exploring your options if you have sales under your belt.
Whether you’re working directly with a company or through an affiliate network, apply some common sense in your efforts to scale. No merchant likes being sent thousands of leads without first having the chance to weigh up how the traffic is converting.
Staying transparent and regularly asking for performance updates is probably the best way to stay on top of your campaigns and avoid getting burnt.
It all comes down to assessing your risks. There’s nothing to fear about running an offer directly, and there’s a lot more money to be made. But do you prefer the convenience of letting a network handle the drama? Or do you have the balls to place some faith in your work? There’s not really a wrong answer.
Recommended This Week:
If you’re not already registered on PPV Playbook, you are missing a beat sunshine. Easily the BEST place to learn from marketers who are actually making money. It has some awesome case studies. The catch is that you will need to pay some of your hard earned pesos to access it. I swear from the bottom of my black heart, joining is worth every penny
If you’re working in the dating market, check out Adsimilis. Definitely one of the better networks with a wide range of dating offers, all on high payouts, including lots of stuff in Europe and South America. I think you’ll like them.
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Good advice! I’ve found that some networks have higher payouts than direct! Usually being because they are running more traffic and got the higher payouts, so higher margins aren’t always the case!
Excellent info Finch. Any general rule (though there may not be one) about how much traffic you should be able to generate before an advertiser — specifically in the dating vertical — would give you the opportunity to go direct? Also, I have some really great relationships with a few networks and I was worried that making attempts to go direct might get back to them and sour the good will I had developed; what’s your thoughts on that?
I think most affiliate networks should be happy to accept that their affiliates have to do what’s right for their own businesses. Otherwise, these are probably networks you should be working with in the first place. I don’t think that’s an issue.
As for the volume of traffic, I think the ratio of sales to leads is more important. If your quality score is high, they’re going to be able to offer you better payouts that may help you naturally send more volume.
Personally though, I don’t normally look to go direct with a merchant until I know I can send them around $1000/day in rev. It may be higher or lower depending on who you run with, but that’s just my preference.
Nice post Finch. I’ve found that consistently sending a couple hundred leads that back out for the site owner will usually justify going direct.
Not only will it be enough to start the relationship, it is the amount you will need to get the payout high enough to justify not going through a network. Under a certain amount, it’s almost always better to go through a network.
[…] “Pros And Cons Of Running Offers Directly“ – Running offers directly means bigger margins, but is it worth the risk? There may not be a right answer. […]
How do one find these merchants who are ready to buy your leads?
can you please cover it in your next post?
Well, it’s normally pretty easy to find them. If you’re registered with a network like CJ, they give you direct lines in to each company. Usually with the contacts responsible for handling affiliate operations.
As an affiliate who also works as a consultant for a couple of advertisers, you’re definitely right in recommending that people run through a reliable network in most situations. The number of cases in which it’s better to go direct is extremely small, and a lot of advertisers (like the ones I work with) aren’t interested in going direct anyway. It’s a pain in the butt to keep track of that many affiliates, and you end up drowning in a sea of “How I make link????” and “Did I make sales yet?” questions to the point that you hardly have any time left over for real affiliates.
That said…if you’re serious about an offer, you’d be silly not to contact the advertiser just to “touch base”, as the network folks like to say. If the advertiser has an affiliate manager/coordinator around, you can get all kinds of juicy details about what’s working, what kind of promotions back out best, etc. If you let them know your affiliate ID/network, they can also see how your quality compares to others and possibly even convince them to hook you up with private banners or LPs.
I’ve also witnessed a couple of cases where the network told the advertiser they wouldn’t cancel leads from a certain affiliate, then they told the affiliate that his leads sucked and he wouldn’t get paid…which would have worked out for them if not for the fact that the affiliate contacted the advertiser and the 2 pieced things together.