The Cons of CPA Marketing

Nato Guajardo · 08-10-2009, 08:52 AM

First of all I want to say that I believe that CPA marketing is probably the best and fastest way to make money online but I just want you to be aware of some of the cons. Actually I want to talk about the major con in my opinion.

What am I talking about? Lead shaving. All CPA networks shave off leads.

When you join a CPA network you trust the tracking system of the network you are working for is 100% efficient and credits you for all the leads that have been generated. Unfortunately, this is not the case.

Some networks do this intentionally and some don't even realize it because most of the CPA platforms include Direct Track which provides an aspect built in for shaving.

This is how it works. If the network sets it to 10% of a particular offer then the affiliate (You) will not get credited for every 10th lead. Isn't that some bull****?

Even with shaving CPA marketing can still be profitable. I just wanted to let you guys be aware that this is going on. Specially the new guys that want to get started using PPC or any other type of marketing that will cost money.

In my experience and I am not affiliated with any of these networks. These are some of the CPA networks that seem to shave less than the others:

HYDRA
CXDigital
Advaliant
CPAstorm
Market Leverage
Clickbooth
Revenueloop
Ads4dough

If you have others please let me know so that I can add it to my list.

Robyn8243 · 08-10-2009, 09:06 AM

Nato:

How can you tell when you are not getting credit for your leads?

How do you logistically track this?

Robyn

Nato Guajardo · 08-10-2009, 09:24 AM

The way I do it is I split test offers between networks using a rotator. If my conversion rate is significantly lower with one than the other then I know which one is shaving more.

Cost of doing business I guess.

p2y · 08-10-2009, 01:30 PM

Don't forget about the advertisers who shave, especially with email and zip submits. The best thing to do is find an offer, go to offervault and see what other networks are carrying it and then "load balance" it by rotating the URL's so if the advertisers starts shaving leads from one particular network you won't be totally screwed over.

Nato Guajardo · 08-10-2009, 01:38 PM

Quote:

Originally Posted by p2y

Don't forget about the advertisers who shave, especially with email and zip submits. The best thing to do is find an offer, go to offervault and see what other networks are carrying it and then "load balance" it by rotating the URL's so if the advertisers starts shaving leads from one particular network you won't be totally screwed over.

Good post. This is exactly what I do.

manicman1 · 08-10-2009, 02:03 PM

Guy's and Gal's thank you so much for the information your are sharing in this thread

dmayne · 08-10-2009, 09:26 PM

You know I could see if this was something free they were giving away. Some kind of product or IP but its not. Why do people think this is ok? They already get a cut. Get more people in network if you want to make more money. This is just greed.

I would like to see some numbers if you would be willing to share...

ChrisBa · 08-11-2009, 06:25 AM

Normally shaving and scrubbing happens at the merchant level and not network level

rodem · 02-11-2010, 02:45 AM

What is a good tracking software?

MrCruzin · 02-11-2010, 03:07 AM

First I do not understand why Copeac is not on your list.

Second shaving on email submits happens because of various reasons. Some are lead quality. If the email or ip or some variations of the user exist already in the database of the company or offer you are driving traffic to.

Third, this built in scrubbing you are referring DOES NOT exist in directtrack. ****ty as it is, I wish networks would move to customs it is not "built in" like you are saying.

Fourth, scrubbing sometimes is implemented on a lead quality basis. What this means is they use it to combat fraud. If you send a company 20 leads and out of those 20. You have 2 that are fraudulent they will implement a system to scrub 2 out of every 20 leads. It is imperfect and this is not done by the networks but more so done by the offers the networks have.

To blame the networks is such an easy COP OUT.

Flaura78 · 02-11-2010, 07:06 AM

Quote:

Originally Posted by Nato Guajardo

First of all I want to say that I believe that CPA marketing is probably the best and fastest way to make money online but I just want you to be aware of some of the cons. Actually I want to talk about the major con in my opinion.

What am I talking about? Lead shaving. All CPA networks shave off leads.

When you join a CPA network you trust the tracking system of the network you are working for is 100% efficient and credits you for all the leads that have been generated. Unfortunately, this is not the case.

Some networks do this intentionally and some don't even realize it because most of the CPA platforms include Direct Track which provides an aspect built in for shaving.

This is how it works. If the network sets it to 10% of a particular offer then the affiliate (You) will not get credited for every 10th lead. Isn't that some bull****?

Even with shaving CPA marketing can still be profitable. I just wanted to let you guys be aware that this is going on. Specially the new guys that want to get started using PPC or any other type of marketing that will cost money.

In my experience and I am not affiliated with any of these networks. These are some of the CPA networks that seem to shave less than the others:

HYDRA
CXDigital
Advaliant
CPAstorm
Market Leverage
Clickbooth
Revenueloop
Ads4dough

If you have others please let me know so that I can add it to my list.

I never noticed Maxbounty or Nevrblue doing it, but had some disappointments with other networks (really big disappointments I mean) .

It's basically that you start a PPC campaign, set up your cheap keywords, your cost per click is about 25-30 % of the CPA.
You make money day 1.
You make the same amount of money day 2.
You trim your campaign and make even more money on day 3.
You make nothing afterwards.
Not even a penny.
With the same campaign, keywords and ad.
It just stops.
You track your links, check your geo targeting, it's all set up OK.
Then you try another offer and it happens again.
So basically something goes wrong AFTER you start making money.

Anyone's got any tips?
Anyone had any similar experience?

Kenster · 02-11-2010, 07:31 AM

Shaving happens, its a part of life, just like many other not completely fair things in business and life. You build this into your business and expect it to a certain degree and then move on with your business. Certain offers are worse than others.

And then of course you set your business up to prevent it as much as possible. Do your own tracking, do cross network split-testing, and just deal with a shave every now and again.

No business is going to be 100% efficient and especially with a lot of the fraud and false leads that permeate the CPA industry, this industry wont be any different.

So, I dont think its a secret or that shocking and I dont really see it as a con of our business, its just a part of it.

my 2 cents

CPAmojo · 02-11-2010, 07:52 AM

Shaving should be illegal. How is it any different than stealing? The affiliate is paying for the traffic and the network is definitely getting paid for the leads, so the affiliates need to get paid for their hard work.

CPAmojo never shaves or steals any leads! I can only speak for myself though as I'm sure every advertiser shaves. I'm thinking of having a layer create a biding contract to send to the advertisers so this doesn't happen to my affiliates.

Flaura78 · 02-11-2010, 12:50 PM

Quote:

Originally Posted by CPAmojo

Shaving should be illegal. How is it any different than stealing? The affiliate is paying for the traffic and the network is definitely getting paid for the leads, so the affiliates need to get paid for their hard work.

CPAmojo never shaves or steals any leads! I can only speak for myself though as I'm sure every advertiser shaves. I'm thinking of having a layer create a biding contract to send to the advertisers so this doesn't happen to my affiliates.

That's a great idea, wish all networks were thinking the same way... I mean you guys only make money if affiliates work for you and don't leave....

harro1 · 07-06-2010, 02:22 AM

cpa is dead
imagine you gave 100 leads to cpa networks and it is only showing 3-4 leads in your account, what you get in the end? "loss of time and money"

badboy_Nick · 07-06-2010, 02:43 AM

Quote:

Originally Posted by Nato Guajardo

Some networks do this intentionally and some don't even realize it because most of the CPA platforms include Direct Track which provides an aspect built in for shaving.

This is how it works. If the network sets it to 10% of a particular offer then the affiliate (You) will not get credited for every 10th lead. Isn't that some bull****?

Yep, shaving is common practice among affiliate networks ... a GREAT way of building a solid relationship with your partners/afiliates by robbing them.

That's why I always circumvent the network and do a direct deal with the merchant ... how do you think I been making so much money the last few years

Go direct, demand upfront payment and ALWAYS negotiate a rejection guarantee of like 20% max.

Any questions just let me know,
Nick

Mike Morgan. · 07-06-2010, 02:57 AM

Quote:

Originally Posted by harro1

cpa is dead
imagine you gave 100 leads to cpa networks and it is only showing 3-4 leads in your account, what you get in the end? "loss of time and money"

If you use the wrong CPA network , you should definitely expect so .

That is why it is always recommended to focus on the good once.

Mike

Kenster · 07-06-2010, 07:27 AM

First I think we should be clear that normally shaving is a small percent of your leads, its not like they are shaving 90%. Secondly, lets do some math to show that shaving isn't the end fo the world and that CPA is not dead. Its just part of the business.

NETWORK 1

Payout on offer X is $10
You pay for 100 clicks at an average $.50 per click = $50 ad spend
You get a conversion rate of 8% so you get 8 leads out of the 100 clicks
Your commisison should be $80 (8x10)
The network shaves 20% of your commission = $16
Your real commission is thus $64 (80-16)

Net profit is therefore $14 which is a 28% return

NETWORK 2

Payout on offer X is $8
You pay for 100 clicks at an average $.50 per click = $50 ad spend
You get a conversion rate of 8% so you get 8 leads out of the 100 clicks
Your commisison should be $64 (8x8)
The network doesnt shave anything here
Your real commission is thus $64

Net profit is therefore $14 which is a 28% return

In BOTH of the above scenarios, we as the affiliate walk away with the same profit and same return. The only difference is that the first network had a higher street payout on the offer, but shaved to make up for the higher payout they had to give. The second network had a lower payout and therefore didnt need to shave at all.

So, is the first network stealing money from us? Are they stealing our leads? Some would argue yes, but I would argue who gives a rats butt. At the end of the day, you need to look at the larger picture, your net profit and your return. I would look at the first network and seond network here equally.

Just make shaving a real variable in your business projections. Its a part of life, either deal with it or go cry and stop doign CPA. I would personally rather you do the second so theres less competition for me, hehe. Just playin

gavinthorne · 07-06-2010, 08:52 AM

Hi Nato

Just wanted to add that I am finding the total reverse with MaxBounty, I am getting credited for traffic and banners I have no idea about - ssshhh don't tell them I am about to get my first $1,000 bonus.

cheers
Gavin

Chris Worner · 07-06-2010, 09:00 AM

You should spread your risk accross multiple networks anyway so that if something goes pear shaped with the network, you havn't lost your entire income stream.

Chris

Steven Sauve · 07-06-2010, 11:29 AM

Quote:

Originally Posted by gavinthorne

Hi Nato

Just wanted to add that I am finding the total reverse with MaxBounty, I am getting credited for traffic and banners I have no idea about - ssshhh don't tell them I am about to get my first $1,000 bonus.

cheers
Gavin

Hi Gavin,

If you are talking about getting clicks/leads on campaigns you aren't running, take a close look at them. If they are for non-US countries, this is because our geo-filtering. If a click to a US campaign comes from somewhere else in the world, we redirect the click to a campaign that does allow that country.

That way, you don't lose the chance to monetize the click you might have paid for.

Thank you.

Affiliatebuddy · 07-06-2010, 01:50 PM

I dont think everybody is shaving around.. Probably yes if you are doing email/zip only. And keep rotating networks.. you will find the same offer at 5 places so it does not matter much.

Always do test leads...everyday.. find a way.. keep yourself safe ( networks will not agree, but how can we ensure we are safe).

Thanks
AB

Kenster · 07-06-2010, 11:41 PM

And again, lets emphasize that you should be much more interested in your profit and ROI than the amount of shaving.

Of course pay attention to shaving, particularly if the same offer is on other networks, but dont waste your time worrying about shaving. Efforts and attention should be focused on profit!

08-10-2009, 08:52 AM	#1
Nato Guajardo HyperActive Warrior War Room Member Join Date: Oct 2006 Location: TX Posts: 353 Thanks: 5 Thanked 16 Times in 14 Posts Contact Info	The Cons of CPA Marketing First of all I want to say that I believe that CPA marketing is probably the best and fastest way to make money online but I just want you to be aware of some of the cons. Actually I want to talk about the major con in my opinion. What am I talking about? Lead shaving. All CPA networks shave off leads. When you join a CPA network you trust the tracking system of the network you are working for is 100% efficient and credits you for all the leads that have been generated. Unfortunately, this is not the case. Some networks do this intentionally and some don't even realize it because most of the CPA platforms include Direct Track which provides an aspect built in for shaving. This is how it works. If the network sets it to 10% of a particular offer then the affiliate (You) will not get credited for every 10th lead. Isn't that some bull****? Even with shaving CPA marketing can still be profitable. I just wanted to let you guys be aware that this is going on. Specially the new guys that want to get started using PPC or any other type of marketing that will cost money. In my experience and I am not affiliated with any of these networks. These are some of the CPA networks that seem to shave less than the others: HYDRA CXDigital Advaliant CPAstorm Market Leverage Clickbooth Revenueloop Ads4dough If you have others please let me know so that I can add it to my list.

08-10-2009, 09:06 AM	#2
Robyn8243 HyperActive Warrior War Room Member Join Date: Aug 2007 Location: New Jersey Posts: 355 Thanks: 77 Thanked 77 Times in 47 Posts	Re: The Cons of CPA Marketing Nato: How can you tell when you are not getting credit for your leads? How do you logistically track this? Robyn

08-10-2009, 09:24 AM	#3
Nato Guajardo HyperActive Warrior War Room Member Join Date: Oct 2006 Location: TX Posts: 353 Thanks: 5 Thanked 16 Times in 14 Posts Contact Info	Re: The Cons of CPA Marketing The way I do it is I split test offers between networks using a rotator. If my conversion rate is significantly lower with one than the other then I know which one is shaving more. Cost of doing business I guess.

08-10-2009, 01:30 PM	#4
p2y Advanced Warrior War Room Member Join Date: Feb 2007 Posts: 508 Thanks: 9 Thanked 188 Times in 57 Posts	Re: The Cons of CPA Marketing Don't forget about the advertisers who shave, especially with email and zip submits. The best thing to do is find an offer, go to offervault and see what other networks are carrying it and then "load balance" it by rotating the URL's so if the advertisers starts shaving leads from one particular network you won't be totally screwed over.
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08-10-2009, 02:03 PM	#6
manicman1 HyperActive Warrior War Room Member Join Date: Dec 2008 Posts: 116 Thanks: 2 Thanked 11 Times in 11 Posts	Re: The Cons of CPA Marketing Guy's and Gal's thank you so much for the information your are sharing in this thread

08-10-2009, 09:26 PM	#7
dmayne Active Warrior Join Date: Aug 2008 Location: Texas, USA Posts: 85 Thanks: 3 Thanked 5 Times in 3 Posts	Re: The Cons of CPA Marketing You know I could see if this was something free they were giving away. Some kind of product or IP but its not. Why do people think this is ok? They already get a cut. Get more people in network if you want to make more money. This is just greed. I would like to see some numbers if you would be willing to share...

08-11-2009, 06:25 AM	#8
ChrisBa Senior Warrior Member Join Date: Jun 2008 Posts: 4,124 Thanks: 10 Thanked 508 Times in 402 Posts Social Networking	Re: The Cons of CPA Marketing Normally shaving and scrubbing happens at the merchant level and not network level
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02-11-2010, 02:45 AM	#9
rodem Warrior Member War Room Member Join Date: Aug 2009 Posts: 8 Thanks: 0 Thanked 1 Time in 1 Post	Re: The Cons of CPA Marketing What is a good tracking software?

02-11-2010, 03:07 AM	#10
MrCruzin Like to cruzzzzz!!! War Room Member Join Date: Jun 2009 Posts: 91 Thanks: 4 Thanked 3 Times in 3 Posts Contact Info	Re: The Cons of CPA Marketing First I do not understand why Copeac is not on your list. Second shaving on email submits happens because of various reasons. Some are lead quality. If the email or ip or some variations of the user exist already in the database of the company or offer you are driving traffic to. Third, this built in scrubbing you are referring DOES NOT exist in directtrack. ****ty as it is, I wish networks would move to customs it is not "built in" like you are saying. Fourth, scrubbing sometimes is implemented on a lead quality basis. What this means is they use it to combat fraud. If you send a company 20 leads and out of those 20. You have 2 that are fraudulent they will implement a system to scrub 2 out of every 20 leads. It is imperfect and this is not done by the networks but more so done by the offers the networks have. To blame the networks is such an easy COP OUT.

02-11-2010, 07:31 AM	#12
Kenster Krazy Kenster War Room Member Join Date: Jan 2009 Posts: 5,111 Blog Entries: 11 Thanks: 672 Thanked 2,009 Times in 885 Posts	Re: The Cons of CPA Marketing Shaving happens, its a part of life, just like many other not completely fair things in business and life. You build this into your business and expect it to a certain degree and then move on with your business. Certain offers are worse than others. And then of course you set your business up to prevent it as much as possible. Do your own tracking, do cross network split-testing, and just deal with a shave every now and again. No business is going to be 100% efficient and especially with a lot of the fraud and false leads that permeate the CPA industry, this industry wont be any different. So, I dont think its a secret or that shocking and I dont really see it as a con of our business, its just a part of it. my 2 cents
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02-11-2010, 07:52 AM	#13
CPAmojo Warrior CPA Network Join Date: Feb 2010 Location: Florida Posts: 72 Thanks: 1 Thanked 4 Times in 4 Posts Social Networking Contact Info	Re: The Cons of CPA Marketing Shaving should be illegal. How is it any different than stealing? The affiliate is paying for the traffic and the network is definitely getting paid for the leads, so the affiliates need to get paid for their hard work. CPAmojo never shaves or steals any leads! I can only speak for myself though as I'm sure every advertiser shaves. I'm thinking of having a layer create a biding contract to send to the advertisers so this doesn't happen to my affiliates.
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07-06-2010, 02:22 AM	#15
harro1 Advanced Warrior War Room Member Join Date: May 2010 Posts: 736 Thanks: 9 Thanked 38 Times in 37 Posts	Re: The Cons of CPA Marketing cpa is dead imagine you gave 100 leads to cpa networks and it is only showing 3-4 leads in your account, what you get in the end? "loss of time and money"

07-06-2010, 07:27 AM	#18
Kenster Krazy Kenster War Room Member Join Date: Jan 2009 Posts: 5,111 Blog Entries: 11 Thanks: 672 Thanked 2,009 Times in 885 Posts	Re: The Cons of CPA Marketing First I think we should be clear that normally shaving is a small percent of your leads, its not like they are shaving 90%. Secondly, lets do some math to show that shaving isn't the end fo the world and that CPA is not dead. Its just part of the business. NETWORK 1 Payout on offer X is $10 You pay for 100 clicks at an average $.50 per click = $50 ad spend You get a conversion rate of 8% so you get 8 leads out of the 100 clicks Your commisison should be $80 (8x10) The network shaves 20% of your commission = $16 Your real commission is thus $64 (80-16) Net profit is therefore $14 which is a 28% return NETWORK 2 Payout on offer X is $8 You pay for 100 clicks at an average $.50 per click = $50 ad spend You get a conversion rate of 8% so you get 8 leads out of the 100 clicks Your commisison should be $64 (8x8) The network doesnt shave anything here Your real commission is thus $64 Net profit is therefore $14 which is a 28% return In BOTH of the above scenarios, we as the affiliate walk away with the same profit and same return. The only difference is that the first network had a higher street payout on the offer, but shaved to make up for the higher payout they had to give. The second network had a lower payout and therefore didnt need to shave at all. So, is the first network stealing money from us? Are they stealing our leads? Some would argue yes, but I would argue who gives a rats butt. At the end of the day, you need to look at the larger picture, your net profit and your return. I would look at the first network and seond network here equally. Just make shaving a real variable in your business projections. Its a part of life, either deal with it or go cry and stop doign CPA. I would personally rather you do the second so theres less competition for me, hehe. Just playin
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07-06-2010, 08:52 AM	#19
gavinthorne Making Money the Easy Way War Room Member Join Date: Oct 2009 Location: London, UK Posts: 5 Thanks: 0 Thanked 1 Time in 1 Post Social Networking Contact Info	Re: The Cons of CPA Marketing Hi Nato Just wanted to add that I am finding the total reverse with MaxBounty, I am getting credited for traffic and banners I have no idea about - ssshhh don't tell them I am about to get my first $1,000 bonus. cheers Gavin
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07-06-2010, 09:00 AM	#20
Chris Worner Senior Warrior Member War Room Member Join Date: Oct 2009 Location: Melbourne Posts: 1,332 Thanks: 1,908 Thanked 652 Times in 344 Posts Contact Info	Re: The Cons of CPA Marketing You should spread your risk accross multiple networks anyway so that if something goes pear shaped with the network, you havn't lost your entire income stream. Chris

07-06-2010, 01:50 PM	#22
Affiliatebuddy HyperActive Warrior War Room Member Join Date: Aug 2009 Posts: 190 Thanks: 4 Thanked 7 Times in 7 Posts	Re: The Cons of CPA Marketing I dont think everybody is shaving around.. Probably yes if you are doing email/zip only. And keep rotating networks.. you will find the same offer at 5 places so it does not matter much. Always do test leads...everyday.. find a way.. keep yourself safe ( networks will not agree, but how can we ensure we are safe). Thanks AB
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07-06-2010, 11:41 PM	#23
Kenster Krazy Kenster War Room Member Join Date: Jan 2009 Posts: 5,111 Blog Entries: 11 Thanks: 672 Thanked 2,009 Times in 885 Posts	Re: The Cons of CPA Marketing And again, lets emphasize that you should be much more interested in your profit and ROI than the amount of shaving. Of course pay attention to shaving, particularly if the same offer is on other networks, but dont waste your time worrying about shaving. Efforts and attention should be focused on profit!
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