The Cons of CPA Marketing

22 replies
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.
#cons #cpa #marketing
  • Profile picture of the author Robyn8243
    Nato:

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

    How do you logistically track this?

    Robyn
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  • Profile picture of the author Nato Guajardo
    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.
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  • Profile picture of the author 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.
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    • Profile picture of the author Nato Guajardo
      Originally Posted by p2y View Post

      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.
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  • Profile picture of the author manicman1
    Guy's and Gal's thank you so much for the information your are sharing in this thread
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  • Profile picture of the author dmayne
    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...
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  • Profile picture of the author ChrisBa
    Normally shaving and scrubbing happens at the merchant level and not network level
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    • Profile picture of the author rodem
      What is a good tracking software?
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      • Profile picture of the author MrCruzin
        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.
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  • Profile picture of the author Flaura78
    Originally Posted by Nato Guajardo View Post

    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?
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  • Profile picture of the author Kenster
    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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  • Profile picture of the author 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.
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    • Profile picture of the author Flaura78
      Originally Posted by CPAmojo View Post

      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.... :rolleyes:
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  • Profile picture of the author 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"
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    • Profile picture of the author MikeMorgan
      Originally Posted by harro1 View Post

      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
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  • Profile picture of the author badboy_Nick
    Originally Posted by Nato Guajardo View Post

    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
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  • Profile picture of the author Kenster
    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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  • Profile picture of the author 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
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    • Profile picture of the author Steven Sauve
      Originally Posted by gavinthorne View Post

      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.
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      Steven Sauve
      steve at maxbounty.com / IM = maxbountysteve
      http://www.maxbounty.com
      MaxBounty ranked #1 CPA Network in the world: http://mthink.com/top-cpa-networks-2014/

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  • Profile picture of the author Chris Worner
    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
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  • Profile picture of the author Affiliatebuddy
    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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  • Profile picture of the author Kenster
    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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