As a growing content website developer I hear it from advertisers all the time. “We don’t want to buy ads from you, but we’d love to have you in our affiliate network”. But is it really a good idea to be an affiliate? Does it really work as good for you as it should? And why are so many companies pushing their affiliate networks? Lets try to answer some of these questions.
Before I get into detail I want to make a bold proclamation. CPA advertising is BAD for web publishers by and large and is an absolute waste of advertising space. If you agree or disagree keep reading on to see why I think that.
During the 2002 Superbowl, one of the most watched in history, ABC Sold a 30 second ad spot for $2.2 million. The event was watched by 88,637,000 people, so that breaks down to about $0.02 per viewer per advertisement. Let’s assume they sold a total of 3 minutes for each block with 4 ad blocks in each quarter. Not even counting the halftime advertisements that gives us 96 ads at $2.2 million each for a grand total of $211.2 million or $2.38 per viewer. Not a bad haul for an event that last only a few hours. Why am I mentioning one of the grandest sporting events of all times? Because many of the same advertisers you see buying these super expensive ads are the same ones who are being cheap with internet advertisements.
Your average website might get between 20,000-30,000 viewers a month and bring in maybe $3,000 or less. But if they made $2.38 per unique viewer they would haul in $71,400 a month that’s quite a difference in the way advertising works.
Now let’s be realistic. Your blog about your family isn’t the superbowl and isn’t a general audience grabber with influence on lucrative demographics. But still there are plenty of websites that make far less than what they should due to two major problems, the first of which is related to CPA advertising. Now that I have the obscene crazy advertising out of the way let’s go back to the topic at hand, why CPA is bad for most websites.
It’s something webmasters and developers are not very familiar with. It’s the concept of ‘the awareness set’. It’s a marketing phrase that basically means all the brands a consumer is aware of. Inside the set there are three subsets. The ‘evoked set’ the ‘inert set’ and the ‘inept set’. In order they mean like, neutral, dislike of the brand in question. When a consumer realizes they need something or want to purchase something internally they consult their awareness set to find a suitable solution (it’s a lengthy process I won’t go into here). Companies spend millions on network T.V. ads, Radio ads, billboards, newspapers and magazine advertisements; sometimes at 10’s of thousands of dollars per ad, to get their brand into the ‘awareness set’ or to transcend from one of the subsets to the evoked set.
Now let’s assume you have a Pulitzer worthy blog that covers entertainment so you get approached by numerous companies to join their ‘affiliate’ networks. They promise you high commissions on qualified sales, banners to run and the ability to associate your blog with their well known brand name. You might be thinking ‘wow this is freaking great’ that is clear up until you realize they are making you buy the cow and getting the milk for free. You see MOST affiliate ad programs ARE NOT designed to make you, the affiliate, money. Sure they have no problem with giving you a cut when someone comes to their site from your link, but the main purpose of the ads is FREE EXPOSURE. Keeping their brand in peoples minds is a huge benefit to companies. Lets look at brands like ‘GameDuell’ a casual gaming website. I recently joined their affiliate network through ‘Linkshare.com’ after the brand approached me about a website. In the past 1.5 weeks I have sent 105 clicks their way with a CTR of 2% those clicks would have cost them $50-$100 on any contextual ad network or a larger site that refuses to join CPA programs. Ok, now here’s where it gets interesting, guess how much I made? $0.00! That’s right. GameDuell got 105 new visitors, 105 chances to impress a potential new customer while simultaneously exposing their brand to 4,900 other people and they got it all for absolutely nothing in cost to them. Now if that website were the superbowl minus halftime ad sales I would have raked in $11,900 over the course that the ad was ran and reported. That’s quite the savings when you look at it from an opportunity cost stand point.
Let’s think critically for a moment. When you’re watching a T.V. ad do you immediately touch the ad and buy the product? When you see a billboard do you telepathically tell the advertiser you want to buy their product and it appears in your car? When you are reading your favorite magazine do you swipe your credit card on the spine and order the product immediately? NO!
Internet developers have been conditioned since the late 90’s to believe that affiliate ad programs are the pinnacle of internet revenue generation for content websites. That is simply JUST NOT TRUE. Advertisers get far more for their advertising dollars (or lack thereof) using a CPA system even with minimal effort. Now that isn’t to say all affiliate programs are worthless. There has been story after story of a successful internet entrepreneur who got rich using CPA ads, but that’s just about as convincing as Carlton Sheets on late night T.V. in a recession economy telling me to buy a home with no money.
CPA benefits mostly and heavily the company that is advertising, while content driven websites that actually push traffic through the internet survive on less than a tenth of what other forms of media get. Advertisers need to start respecting internet websites as a major media source. When was the last time a newspaper ad gave you real-time feedback? When was the last time you were able to track every single sale from a T.V. ad campaign? the answer is NEVER. The internet offers far more to potential advertisers than any other medium and grows in usage each day. CPA advertising has gotten so powerful it has effectively turned most mid-level websites into Avon-like salesmen scraping at the bottom of the barrel trying to generate revenue while larger companies get wealthy off of their efforts and their sites stay mid-level or even whither and die.
The next time a potential advertiser tries to sell you on an affiliate program and says your website ‘offers no benefits for advertising’ you tell them that your website offers a lot more benefits than any other form of advertising and at competitive rates to all other major media sources. If they don’t buy your ad spaces, then walkaway - you don’t need them. If enough web developers do this we can recondition the market to be more fair in our favor and not cater so heavily to the immediate sales of products.
sources:
superbowl ad rates at msnbc
