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

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.

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.

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

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...

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

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?

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

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.

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"

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

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

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

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

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

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!