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.
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.