A CPA Network’s Dirty Little Secret
CPA networks make a lot more money than you think. They make a lot more money than they would like affiliates to also think.
I didn’t realize this until I starting digging deeper with my affiliate managers when running campaigns years ago.
I once had an affiliate manager want me to run a campaign so bad that he offered to upload “overages” to my affiliate account ever night.
Huh? Overages?
I asked him what “overages” were and he told me that it was all the extra leads that the affiliate CPA network misses when the pixel doesn’t fire correctly on the thank you page.
I asked him how many leads that would be and he told me around the 8%-15% range.
I was like… “What?!”
The network statistics miss anywhere from 8%-15% of all the leads that are being registered for CPA offers?
Here is the sad reality.
No matter what, a pixel will never fire 100% correctly. There are a number of reasons why this may occur and it would take too long to describe it in this blog post.
I am just warning you that you will NEVER get paid for the 100% of the leads you really generate for a network.
I have verified that the “overages” are in fact a sad reality of life as a CPA marketer by having my own Direct Track platform.
Direct Track powers almost 80% of all the CPA networks online today. I have my own Direct Track platform so that I can work directly with a number of advertisers instead of having to go through a CPA network.
In every single case, with every single advertiser, the lead count in Direct Track was always less than the lead count recorded in the advertisers tracking stats.
Their stats are the most accurate because it can only count leads when an actual lead is created. CPA network software programs don’t count when leads are created, they count when a pixel is fired. There is a huge difference between the two.
On average, my advertisers report 10% more leads than I see on my Direct Track platform. And this is not limited to Direct Track as I have seen this across a number of other CPA networks who don’t even use Direct Track.
Just to give you an example of the impact that this may have on any CPA campaign you are running, here is an example with numbers.
300 leads x $3 payout = $900 affiliate commissions
If you paid $500 in traffic to generate the $900 in CPA commissions, than you have a gross margin of around 44%.
But if the network missed 15% of your leads, this means you really had generated 345 leads.
345 leads x $3 payout = $1035
Your real gross margin is around 52% and your pure profit jumps over 25%.
If you are ever doing a ridiculous amount of volume with a CPA network, it almost makes sense to buy your own tracking platform and work directly with the advertiser so that you are ensured all the commissions and overages from your efforts.
Some CPA networks are nice enough to spread out overages at the end of the month to their affiliates who were running that campaign. But in most cases, they keep these extra profits for themselves.
This is a CPA network’s dirty little secret.
Feel free to leave your comments with your thoughts.
Cheers
Gauher Chaudhry
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March 11, 2010
4:40 pm #comment-1
Hey Gauher
this is crazy… a little discouraging at best. My days of CPA have slowed down, hydra recently deactivated my account due to low volume. Wish I could get a hand holding to get back into it, but I’m out of capital, struggling to make ends meet. Good luck!
March 11, 2010
4:50 pm #comment-2
Shocking! Sometimes my stats go down for a week although I don’t change anything. Then I stop running the offer and then start again to let them know with another. and it’s just going on like this. It’s not that offers “rum out” it is not the same people watching it over and over again!
March 11, 2010
4:50 pm #comment-3
Very interesting Gauher. I just launched a CPA offer on Affiliate.com and I’m looking to start getting alot of volume real soon. Overages will definitely work in my favor if I’m getting leads and not having to pay for them. I’ll let you know what I find out on my end at the end of this month.
March 11, 2010
4:50 pm #comment-4
Hi Gauher I think it is a sad fackt but how to asvoide this is any kind of beter tracking software?
March 11, 2010
4:51 pm #comment-5
Hey Gauher,
Wow. Well I suppose we shouldn’t really see the CPA network as the “bad guy” here, as the pixels not firing is down to various technical reasons, not some under-handed tactics on their behalf.
So, as you say, if your volumes justify it, get your own platform, and look forward to higher cheques each month from the advertisers than your stats indicate! I can think of worse things than that! lol
How do you go about getting your own Direct Track platform set up? How much would it cost? And do you have to host it youself?
Thanks for the info, Gauher.
Joe T
March 11, 2010
4:51 pm #comment-6
Re:
“Some CPA networks are nice enough to spread out overages at the end of the month to their affiliates who were running that campaign. But in most cases, they keep these extra profits for themselves.”
Is this a question–do you spread your overages?– that one can–should–ask the affiliate manager?
Is there a way to find out which companies do and which don’t do this?
March 11, 2010
4:51 pm #comment-7
Gauher, thanks for sharing this. It seems every day I hear of some other way that we are being ripped off. I’m just getting into CPA, PPV and the like and am about ready to start both of your courses that I have. Love reading your blog.
March 11, 2010
4:52 pm #comment-8
This is exactly right. I actually though it was more. Specifically because lets say you use Google their conversion pixel only get’s it right 60% of the time in my experience.
I assumed about the same from DT and the others. I’m actually happy to hear that at worst it’s only missing 15%.
The trick is if your aff network is smart enough to be getting paid for the leads they generate and aren’t billing off their own server.
March 11, 2010
4:52 pm #comment-9
Gauher, as always, excellent information.
What you say makes sense and it’s nice to hear this (important info) from somebody that is working in the trenches.
Nice post and good info. This is a gold nugget.
Sean
March 11, 2010
4:53 pm #comment-10
Wow. This does not suprise me at all. I do email marketing for CPA companies and take it on the chin everyday. What can you do.
Alan
March 11, 2010
4:53 pm #comment-11
Gauher,
Thank you very much for this post.
This is something I heard about but this is the first time I hear someone speaking out about it.
Can you give some tips on finding and contacting advertisers directly?
Usually websites that have offers have privacy protection on them.
With appreciation,
Lana
March 11, 2010
4:55 pm #comment-12
I agree with you 100% So I ask you, what direct tracking program do you recommend?
March 11, 2010
4:57 pm #comment-13
So how does one snag a few of these advertisers directly mate?
March 11, 2010
4:57 pm #comment-14
Yeah I have been well aware of this fact over the years because I would track myself and see all kinds of leads I generated not giving me “credit”. I would always question if the CPA Networks were being honest with me or if it was just error.
Thanks for letting me know the honest truth behind the scenes. I still do really well with CPA but I’m going to talk to my affiliate manager about throwing me some “overage”.
I wonder if all the Networks split up the Overage with all the staff just as an extra incentive to work with us more?
Anyways… great post as usual Gauher!
- Bob Beckett
http://www.ModernMarketingOnline.com
March 11, 2010
4:57 pm #comment-15
Hi Ollie,
Not quite. You will still have to pay the CPA network for the leads that they generate. They just don’t have to pay their affiliates if it doesn’t show up in the reporting.
March 11, 2010
4:57 pm #comment-16
I’d like to know what the name of the platform you are using presently. Please forward us some information. Thanks
March 11, 2010
4:58 pm #comment-17
Hi Don,
Go to the bottom page of any CPA offer you are promoting and you will always find contact information that should link back to the real advertiser. Some times it may take a bit of work, but you will find them if you try hard enough.
March 11, 2010
4:59 pm #comment-18
Hey Gauher
That is phenomenal information – thank you. I am an advertiser, in the biz op niche, and am also dissatisfied with some aspects of the CPA networks.
I would happily offer log-in access to my stats to any publishers who wanted to run my banners directly. Have you thought of running a service putting advertisers and publishers together yourself?
If not, why don’t you!
John
March 11, 2010
5:00 pm #comment-19
Interesting and fascinating fact that some of us never knew before. Thanks for sharing Gauher!
Really wish Good Luck to everyone trying on that!!!
It would be interesting to hear what other marketers have comments on this!!
March 11, 2010
5:04 pm #comment-20
Wow Gauher, What a bummer to real that news. Is there any way we can protect ourselves from that?
March 11, 2010
5:06 pm #comment-21
Hey Gauher
Why don’t you start your own CPA Network and allow us to be your advertisers? We all trust you. You can give us 50% of ‘overage’ and keep other 50%. We both benefit from this.
Deepak Vasa
New Zealand
March 11, 2010
5:09 pm #comment-22
Thanks Gauher…
I don’t use the networks pixel code. I use Affiliate Prophet Pro tracking software, and it generates a “Thank You Page” link/pixel. I have my Affiliate Manager place it for me. So, unless it is also unreliable, the only way it wouldn’t fire, is if the advertiser purposely concealed a sale!
Any thoughts on this Gauher?
Mike Steinberg
March 11, 2010
5:09 pm #comment-23
What do you know!
Many reasons the pixels don’t fire at the thank you page, say it didn’t load completely because of a slow connection, a windows system crashed before loading, or the user just closed the browser early. But the lead has already opted in.
The qeustion is: why would the advertisers report the extra leads to the network, unless they are super honest in an industry that considers honesty an insult!
I was thinking of starting my own aff network. You only used Direct Track … any idea about other platforms like hasoffer?
March 11, 2010
5:13 pm #comment-24
This has been the case with all affiliate programs since day 1. The best advice I’ve received about this problem is quite simply to quit whining about it and accept the reality
March 11, 2010
5:17 pm #comment-25
Hey Gauher,
I can remember you telling us in one of your videos that your brother-in-law actually worked for a Network as an AM a couple of years ago.
The issue mentioned in your great article might have been noticed by him years ago and I wonder if he had not shared this with you in past times already?
Always the Best,
Marc.
March 11, 2010
5:17 pm #comment-26
Thanks for sharing this. This is a reality and so some affiliates are offering to have the direct track method which is encouraging. This is what has been offered by Moss Affiliate, which gives you the added advantage of building up your own list and marketing to them.
The game changes every day for sure but it becomes tougher.
Thanks.
March 11, 2010
5:19 pm #comment-27
Guess thats why we’re seeing so many CPA networks crop up daily. sounds highly profitable for the CPA companies. This makes it even more important to work with CPA companies that have been in the business for a longer time and built some reputation.
March 11, 2010
5:20 pm #comment-28
Good to know about CPA .Currently there are many companies,but i do not understand which one will work in the current recession .
Look forward to hear.
March 11, 2010
5:23 pm #comment-29
If you’re interested in a robust CPA/offer tracking platform, and don’t have the budget to afford a license at LinkTrust or DirectTrack, take a look at HasOffers.com.
They have a free version that allows for 10k monthly clicks, and then paid versions for more traffic/offers/advertisers.
Enjoy
Jeff
FirebirdSEO.com
March 11, 2010
5:23 pm #comment-30
Thanks for confirming what I always knew, I often have tests run to see if pixels fire, and they almost always do, even though I have good friends with clean computers test some banners if I run 100 clicks and hadn’t any sales, I always try to get a buddy to test it for me, and even they complete the submit, many many times I don’t get paid.
I wonder if one day there will be a federal regulatory agency that will oversee and audit the cpa networks…like the SEC does for the stock brokers…many moons ago the stock brokers were free to do as they pleased too and investors were cheated…sound familiar doesn’t it?
March 11, 2010
5:24 pm #comment-31
Gauher,
Good stuff – I would suggest if you are doing some good volume with your affiliate network to work with your affilate manager to see what incentives they can work out with you. They don’t want to lose good affiliates or vendors. To go the route of Direct Track -http://www.directtrack.com/index.html
you gotta be doing some serious traffic and conversions to make it worth your while.Also, you should make sure you have a legit company LCC, INC or dBA w/ a real email addr and domain not gmail to addres vendors direct. Thus letting them know you mean business and are prepared to offer them a direct monthly revenue quota that you plan on delevering.
Chris J – Boston -
March 11, 2010
5:25 pm #comment-32
Thanks for the heads up. All I can say multiple steams of income are a must.
Thanks again Gauher
March 11, 2010
5:26 pm #comment-33
Hey Gauhar,
Its really shocking. It happens with me a lot of times that one day the EPC is 0.95 but other day its 0.15.
But what tracking platforms are available in the market?
Does advertisers interested to talk to affiliates directly? To avoid this dealing they are paying to CPA networks.
March 11, 2010
5:31 pm #comment-34
Hello Gauher,
Thank you very much for sharing your precious observations.As usual,your conclusions are very sensible and helpful.
Plamen
March 11, 2010
5:33 pm #comment-35
How do you go about working directly with the advertiser and when you do, do you get the same rate or do you get paid what the network would get paid?
March 11, 2010
5:35 pm #comment-36
Hi Gauher
Thanks for sharing.
Why don’t you create your own Cpa net as many kids did.
And if, how can you assure you can be different.
J.
March 11, 2010
5:35 pm #comment-37
Very timely post. Last weekend, I spent the better part of a day trying to set up and test subid tracking with a CPA network that uses DirectTrack. When I ran some test links, the numbers weren’t anywhere in the ballpark. Easily missed 50% of the subids I passed and
even more of the clicks. I tested with Prosper 202 and Hypertracker with similar results. Of course, we’re just talking clicks in my case, not conversions. I contacted the network to ask them about it. They didn’t have an explanation but said they’d talk to DirectTrack support about it. Still waiting. I wondered at the time if maybe some of the missed clicks could be attributed to some type of click-fraud controls. I read-up a lot on DirectTrack and pixels\postback-URLs as well. Not very encouraging. For the benefit of your readers, here are a couple of detailed posts discussing the different tracking options that are out there:
http://www.hasoffers.com/documentation/conversion-tracking
http://www.hasoffers.com/blog/2010/02/affiliate-tracking-client-based-tracking-and-server-response-tracking
FYI, I have affiliation with HasOffers (a competitor of DirectTrack). I’m just a regular Joe trying to wrap my brain around it like most mortals. It’s just the most comprehensive explanation I’ve seen so far.
Gauher, I have two questions:
1. Do you know if any of this behavior (missing clicks & subids) could be at least partly attributed to click-fraud controls?
2. How can CPA affiliates best protect their commissions with a DirectTrack network, short of buying DirectTrack? (which is in the low 5-figure range, I’ve read)
March 11, 2010
5:38 pm #comment-38
Whoops! I meant I have NO affiliation with HasOffers. Sorry for the confusion.
March 11, 2010
5:40 pm #comment-39
Great info Gauher. I have known about this too after talking to people who do tracking software. Coming from the trading world it amazes me to see a ‘tech glitch’ that would be a major lawsuit in the that industry (can you imagine your broker losing 15%-25% every time you placed an order) be part and parcel of our industry.
On the flip side is the horror stories of working with publishers/offers directly and NOT getting paid. How do you propose people handle that ‘hassle’
I agree tracking direct is the way to go AND how to handle the relations so you get paid too.
Thanks for all your great info,
Phoenix
March 11, 2010
5:52 pm #comment-40
Yeah Gauher,
This revelation is fantastic. this is an act of dishonesty on the part of the CPA network involved. And the big question is, how do we prevent this from happening ? and to get all what is due to the Affiliates ?
Kadri Egbeyemi
March 11, 2010
6:03 pm #comment-41
Great information for everyone who is in CPA market.
Thank you.
March 11, 2010
6:54 pm #comment-42
I suspect a release of a new program coming soon?….Are you starting your own cpa network?…Thanks for the info….
March 11, 2010
6:55 pm #comment-43
Great article which addresses the fears on most of our minds of being ripped off by the CPA Networks.
Basically, we are being charge a 15% minimum surcharge by the CPA Networks. Image going to buy gas or groceries and upon paying, they say (or in the case of CPA Networks, they don’t say), ‘that will be another 15%’.
How do some of the networks like ClickBank get away with not even having pixel support?
CPA Network accounting: 1 for you 3 for me…
As a suggestion, maybe a group of us could set up some independent testing of some CPA Networks and post the results in a blog or at lease distribute the information among us.
March 11, 2010
7:10 pm #comment-44
Hi Gauher,
I was also suspicious after doing a little tracking detective work. I found a 15%-20% discrepancy. Talked to my aff. mgr but nothing came of it. I will post this thread also to my list as they are all PPC CPA guys.
Nitin
March 11, 2010
7:16 pm #comment-45
Hey Gauher,
So how does this CPA stats compare to those of Clickbank and PPC? Probably still alot better or would you disagree?
March 11, 2010
7:18 pm #comment-46
Excellent info Gauher!
If the Government is sooooo interested in making sure that people are not getting scammed, why don’t they do the same for affiliates? We are people too…
Thanks for letting me spout off,
Jay
March 11, 2010
8:06 pm #comment-47
This discussion has seemed to only be including CPA networks …Would the same error
rate apply to networks like CJ, LS, SAS,
GAN, Pj, etc. that are PayPerSale ?
March 11, 2010
8:07 pm #comment-48
I have a question….somebody know what happen.
I have a cpa campaign and i have 400 signups
in the cpa campaign……but i have not signups
in my autoresponder i have nothing….
what is matter………..
March 11, 2010
8:14 pm #comment-49
Gauher,
Is this the reason an identical offer can have substantially different conversion rates on different CPA Networks?
March 11, 2010
8:26 pm #comment-50
Thanks for the enlightening post, as always Gauher, but I think we need to be mindful of the inference that all networks indulge in these practises, or that there’s something inherently wrong with Direct Track.
We run a Direct Track network and I can tell you, yes, there are issues from time to time with pixel tracking and this can have any number of technical causes, but this is the first time I’ve heard about the concept of overages – at least in this context. We pay our affiliates what’s recorded – our advertisers pay us on the same stats and believe me they would know if there was a discrepancy.
I can concur with you that we have experienced some suspect stats from some of the larger networks where, if you ask me, the level of rebranding of the same old offers makes me wonder how on earth these business actually survive without some kind of throttling. But don’t infer that we’re all doing it.
Cheers
Damian
Cogentads.com