Re: The CPA debate vs. Affiliate Programs

From: Paolo Vanossi <info_at_paolovanossi.com>
Date: Tue 12 Feb 2002 15:38:33 -0600

Very interesting thread as usual. I'll try to express
my opinion but first of all let me tell you I work for
the leading european affiliate marketing provider, so
my opinion is definitely not objective. Anyway... I
think that while Pesach's remarks are largely
judicious, we should precise some points:


1. an affiliate relationship consists of two parts, the
publisher and the merchant. While obvious, this
consideration also implies that we should distinguish
pros and cons of this kind of relationship for both of
them. Actually it's true that the merchant has the grip
on it, 'cause most of the time its offer cannot be
negotiated and for that reason is always in its
favour.

First conclusion: I think there shouldn't be any doubt
that affiliate marketing is effective for merchants,
'cause it almost always implies higher ROI and convertion
rates. According to Jupiter Communications it will
represent 25% of total online sales by the end of the
current year. That's serious money I think...

2. all Pesach's criticism then is related to publisher's
acceptance of affiliate marketing offers. He says: "no
one is making any serious money from affiliate programs...
affiliate programs are not for professional marketers, or
serious websites. No real expert in the industry markets
CPA programs."

Well, this is simply not true. Let's look at Forrester's
figures: during 2001 an hybrid model (CPM+CPA) was already
predominant. By 2005 it will represent almost 3/4 of the
whole market share. I can't believe this means 3/4 of all
marketers are not "serious". And then I can assure you that
there are lots of publishers who are making big money.
While major portals who use affiliations at various levels
(they probably won't tell you of course) are not always
aware of all the implications (I agree that accepting CPA
deals can definitely make it difficult to propose CPM
advertising but only if you are not able to find an
effective balance between those two components), there are
many medium/large sites with very hight convertion rates
who find CPA even more profitable than CPM. I know for
instance a well known gaming site who has a steady 45% or
higher CTR. It's because of their business model. I don't
think they would agree with you... But perhaps I can ask
them... Anyway even if you have a normal CTR you can get
great results if you are able to choose the right
advertisers and the deals which better suit your audience's
needs.

In the end I think any serious marketer and advertiser
should face reality instead of having its head stuck in
the sand...

best

@(-_-)@ - Paolo Vanossi

http://suckmybrand.com ...new theory and practice:
web marketing, design, arts, sounds and visions...





Received on Tue Feb 12 2002 - 15:38:33 CST