Geno Prussakov

“CPA Networks”: Defining the Terms

Contrary to how it may appear on the façade of things, CPA networks are not affiliate networks. The “CPA” part in their name is what is misleading many. Generally meaning cost-per-action, a widely-spread affiliate payment model, the abbreviation “CPA” is actually not the best way to describe “CPA networks”. The more appropriate name for them is sub-affiliate networks. Whereas a traditional affiliate network (e.g. CommissionJunction or LinkShare) is functioning as a mediator between merchants/advertisers and affiliates/publishers, CPA networks are working as yet another link in the chain between the merchant and the affiliate. I have put together the following diagram to illustrate the difference between a traditional network and a CPA network:

Affiliate Networks vs CPA Networks

If a merchant were running an in-house affiliate program, the sub-affiliate network will be a link between the merchant and the affiliate, receiving commissions from every sale that the affiliate sends. Be it with an in-house, or with an on-an-affiliate-network affiliate program, the affiliate becomes a sub-affiliate, while the “CPA network” is the affiliate that is paid a “preferred” or “private offer” (read: higher) commission (or per lead bounty, which is the preferred payment model for sub-affiliate networks), and can afford to pay their sub-affiliates a higher commission/bounty than the default commission/bounty that the affiliates would get if they went directly to the merchant. Why “preferred” commission? Because being an affiliate with a large volume of sub-affiliate traffic and sales, they are essentially perceived as power affiliates or “super affiliates”.

This raises several problems. I would like to touch upon the two main ones.

Conflict of Interest

Being an affiliate themselves, the “CPA network” is in direct competition with their sub-affiliates. The conflict of interest is there and no serious affiliate will disclose their techniques and methods to a competitor by working under them as a sub-affiliate. Hence, if a merchant decides to run their affiliate program on a “CPA network”, they should not expect any super-affiliates to join their program. Furthermore, they should be aware of the lower quality of leads they will receive through the CPA network, as opposed to a managed affiliate program on a traditional network.

Shady “Marketing” Practices

History testifies to the fact that it is not uncommon for “CPA networks” to tolerate (or even partake in) e-mail spam, adware, fraudulent “leads”, incentive websites (not the affiliate type you want to have in a program if you’re paying for leads), recruiting other sub-affiliate networks.

Much more can be written on the topic, and a simple search of online discussions on “CPA networks” will yield a plethora of enlightening blog posts and forum threads. To work, or not to work with sub-affiliate networks will ultimately be the affiliate’s and the merchant’s decision. One thing I hope they do is make an educated and well-weighted decision.

Additional Reading:
When Your Network Is An Affiliate And Adware Company.
Seriously considering advertise through a CPA Network.
We’re an “Affiliate Network”.
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Geno is the founder and CEO of AM Navigator, an outsourced affiliate program management company, and he was voted the “Best OPM of the Year” for two years in a row (2006 and 2007) by the largest online affiliate marketing community, ABestWeb.com.

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