Why don’t publishers cut CPA companies out of the deal?

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charles1

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Here’s a question I have directly for an affiliate.

 Why don’t affiliates simply go directly to advertisers instead of the CPA networks and cut deals with them for sending them traffic? Or, do they do this already?

 Here’s the reason I ask. I have an acquaintance who has worked inside of 2 of the largest CPA companies. He has told me that there is a well known term called the Scrub. Basically, this is a term used to describe the profits that CPA companies essentially steal from their publishers. He told me that all CPA companies will take more than their agreed share of the profits, and it is always the affiliate that loses, not the CPA company, and not the advertiser.

 I have not verified what he has told me…but….he had no reason to lie to me. Ya know…nothing to gain from it.

 Anyway, I figure, even if a CPA company does not steal profits from their publishers, they still cut into the profits of both the advertiser and the affiliate. Nobody can argue with this.

 I realize there must be many obvious reasons why Top Super affiliates like Rosalind & Zac Johnson would still go to the CPA networks, I just would like to fully understand why?

 I figure they could cut much better deals for themselves if they went straight to the advertisers.

Currently I’m working on a project that I hope and predict will attract the super affiliates. I believe this will be the case, simply because it looks like I’ll be able to offer them a higher payout for their efforts than anywhere else I have seen.

 All replies are welcome.

Thx kindly
 Gary Roblin
 
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charles1 said:
Here’s a question I have directly for an affiliate.

 Why don’t affiliates simply go directly to advertisers instead of the CPA networks and cut deals with them for sending them traffic? Or, do they do this already?

 Here’s the reason I ask. I have an acquaintance who has worked inside of 2 of the largest CPA companies. He has told me that there is a well known term called the Scrub. Basically, this is a term used to describe the profits that CPA companies essentially steal from their publishers. He told me that all CPA companies will take more than their agreed share of the profits, and it is always the affiliate that loses, not the CPA company, and not the advertiser.

 I have not verified what he has told me…but….he had no reason to lie to me. Ya know…nothing to gain from it.

 Anyway, I figure, even if a CPA company does not steal profits from their publishers, they still cut into the profits of both the advertiser and the affiliate. Nobody can argue with this.

 I realize there must be many obvious reasons why Top Super affiliates like Rosalind & Zac Johnson would still go to the CPA networks, I just would like to fully understand why?

 I figure they could cut much better deals for themselves if they went straight to the advertisers.

Currently I’m working on a project that I hope and predict will attract the super affiliates. I believe this will be the case, simply because it looks like I’ll be able to offer them a higher payout for their efforts than anywhere else I have seen.

 All replies are welcome.

Thx kindly
 Gary Roblin
Click to expand...

  1. Rosalind and Zac Johnson are NOT top affiliates.
  2. The term super affiliate is a buzz word and should never be used in serious context.
  3. Yes scrubbing exists. Sometimes by the merchant because the leads don't back out, sometimes by the network because they want a higher margin.
  4. As much as I(and many others) distrust networks, I distrust merchants even more. I know personally I've been fucked over by far more merchants than networks. And I'm not going to take a merchant with no reputation in the community and nothing to lose by running away with my money at his word. Maybe if I have their first born or something.
  5. Individual merchants are a pain in the ass to deal with. And get paid by.
  6. Networks *in theory* provide some form of protection to affiliates if the merchant runs away/whines because they overestimated their own conversions. They don't anymore(most of the time), but at least in theory...
 
I think the top one for both sides is:

"Individual merchants are a pain in the ass to deal with. And get paid by."

and on the advertiser side

"Individual affiliates are a pain in the ass to deal with. And pay."

Honestly managing, tracking, paying affiliates is a full time job. And if they're doing that they're not focusing on the core competencies. Which in my opinion is making their offers better. Advertisers have to go recruit affiliates where networks come to the table with a group of guys they have relationships with. Some advertisers pay delayed up to 30 days out. Big affiliates running paid traffic need to be paid on a weekly basis because they run high debt amounts to buy traffic and generate the sales. Some times affiliate networks can help them bridge this gap for a piece of the pie. I can go on and on. It's a great question and the more you learn about the business the more you will now begin to realize the roles of all the players.

On top of all that most advertisers want an arms length relationship with affiliates. Some of the bigger players are starting to run their own affiliate side of things. But even at that maybe your traffic quality for leads wouldn't be ok direct but it would be blended into a network.

As you know Just my 3 cents
 
Shady and Smaxor nailed it. I have chosen to go through a network sometimes even when the advertiser offered me the same payout they are giving the network to go direct because of exactly what they both stated above.
 
Chasing down asshole merchants who never pay on time is not a pleasant thing to do monthly. Plus most affiliates have no clue that networks paying weekly are paying out of their own pockets in hopes of attracting more affiliates and in hopes of actually getting paid someday by the merchant. Also, most individual affiliates do not have enough volume to justify going direct.
 
Why is your name Gary and your username Charles?

Edit: I can't take your question seriously if you consider Rosalind and Zac to be top affiliates
 
Easy Actually,

Scrub is so called "shaving" in adult terms ;)

BUT it depends on your size, if you are a HUGE affiliate there is always a reason to cut out the CPA company, since you can get huge number of leads and cut out anyway in the way and do it directly with the "end company"

if you are small dude (lead converting wise) most chances you wont get same deal as you get paid by the CPA company, since they are the brokers in the middle and they bring 1000`s of leads per day that's why the ability to get higher payout and so on.
 
wick3d said:
Easy Actually,

Scrub is so called "shaving" in adult terms ;)

BUT it depends on your size, if you are a HUGE affiliate there is always a reason to cut out the CPA company, since you can get huge number of leads and cut out anyway in the way and do it directly with the "end company"

if you are small dude (lead converting wise) most chances you wont get same deal as you get paid by the CPA company, since they are the brokers in the middle and they bring 1000`s of leads per day that's why the ability to get higher payout and so on.
Click to expand...


Uhm... no

Shaving and Scrubbing are two different things.

Nice try though, and thanks for playing

:music06:
 
quite simple really- it's an opportunity cost that would negatively impact my margins if I had to deal with the housekeeping myself.

I'm more than happy to pay for that, as well as someone else floating massive amounts of dollars.
 
If you're doing enough volume with a few merchants, on a consistent basis, it may pay to explore direct opportunities, and run them direct, or create your own mini-network from their offers. I know of one affiliate who ended up doing that, and has negotiated some great deals due to his volume and quality.
 
$20-30 from a network or $100+ from a merchant w/ just a little more hassle. tough decision there!
 
We know Azoogle very well, and it would be a pretty crazy deal if they were taking that big of margins.

Our experience with them and other good networks is that they make pretty skinny margins and need to make it up in volume. They may make larger margins on more niche offers that have low volume.
 
jbartinla said:
We know Azoogle very well, and it would be a pretty crazy deal if they were taking that big of margins.

Our experience with them and other good networks is that they make pretty skinny margins and need to make it up in volume. They may make larger margins on more niche offers that have low volume.
Click to expand...
I'm not saying those margins exist within all niches - I've only noticed the disparity in one (high volume), but when there's one there's others. I'm not saying Azoogle is taking taking that much either. Maybe their merchant is shorting them. :)
 
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