Wow, lively debate. Let me chime in on the side of a company that sells traffic. If you guys aren't familiar with our site, check out the traffic generating site of
ConsumptionJunction.com . We're a strange breed of adult-shock-humor that's incredibly difficult to categorize. Our traffic doesn't come to CJ to jerk off, but the still convert really well on quality sites. We average 1/250 conversions (based on our numbers, not theirs) with TrafficCashGold, Topbucks, TrueCash, and PlatinumBucks.
We send about 50% of our traffic to the affiliate programs and I retail the other 50%. You've got to understand, we're a ridiculously high-traffic site. We serve around 4,000,000,000 ads month. Why not just send traffic to the affiliate programs? Wouldn't it be less work? We split our traffic for stability and variety for our fans. We've got a very high percentage of visitors that come to CJ daily. As many sites as these programs run, it's tough to get enough variety when we're dealing with this volume of ads. It's not the money-in-hand issue because all the programs pre-pay us for joins anyway. Also, it's always better to have diversity in your income streams. It also minimizes our risk. We know that with $40 to $45 payout and 1/250 conversion; we make $0.16 to $0.18 cents per click. We take all our ad placements, figure out how many clicks they did the month prior, multiply by $0.17 and that's how much we retail them for.
The key to our "retailing" of our traffic is that we don't gouge anyone. We charge what we could make off of it. If the customer's site is quality and converts in the 1/250 to 1/500 range, they'll make a profit because they keep the recurring revenue. Happy customers make repeat customers which is always more profitable for a business. Another key is that we turn sites away if we don't feel they'll convert. One great thing about this industry is that reputation still matters. If you screw someone, word will get out.
Others have mentioned that if you have quality traffic, why not build your own sites and profit from them. Great idea. We'll be launching our program (CJBucks) with 10 sites this month. But we've been in business for three and a half years. Why didn't we do this sooner? Initial investment and resources. We're a free site that does 200 mb/s in bandwidth. It takes money to start a program the right way (quality processing, quality sites, quality affiliate software).
Also, the ease of just sending the traffic off and getting paid is tough to overcome. I've heard the argument of shaving and trusting their stats and it doesn't make sense to me why that's an issue. DON'T USE THEIR STATS! Just look at how much you get paid vs how many impressions you gave them and figure out your revenue per thousand impressions (RPM). Compare programs that way. It puts everyone on even footing. So what if they're shaving? If you're making 10 cents more per 1000 impression, does it matter? Yes, this method requires you to keep on top of your stats and track everything very closely. We set up separate accounts with each program for every one of our placements. Thus, we know that with TrafficCashGold we average 1/270 on our 180x150 banner position vs 1/230 on our 120x240 position. Crunch Numbers! This is all a numbers game. The better hold you have on where your traffic is going and how much you're making, the more you'll make.
CJ is a unique site with insane traffic. I'm sure we've got more experience with every program out there than just about anyone else. I 100% understand how you can make good money by only sending your traffic to affiliate programs. You just have to watch the numbers. Of course, we're also hoping that we can make even better money by running our own program (insert CJBUCKS plug).
Finally, let me address the pay/join vs rev-share model. For the longest time, I really thought the only way these programs could offer $40 to $45 per join (trial join even) was to shave the hell out of the webmaster. I've come to realize, that if you're doing a very high volume of joins, you don't have to shave. You can pay that because you're making money on the backend: not paying on exits, not paying on dialer/international traffic, grabbing email addresses and sending mailings. Don't get me wrong, I know the temptation of making more $ by shaving the numbers happens. It's sad, but I believe true. Human's by nature are greedy bastards. When we launch CJBucks, we're initially only going to offer rev-share. We simply won't have the volume of traffic when we launch to offer pay/join. Eventually, when we're making enough off the pops, emails, and dialers, we'll start offering it.
From the sending traffic side, we used to only do pay/join. We avoided rev-share like the plague. We didn't trust anyone and wanted the cash up front. We have no control over what the retention rate will be for someone else?s site, so we have no idea what we'd make off a rev-share. Then Bangbus came along. Here we had an original site with good content and regular updates. We were confident enough that the retention rate would be there so we did a rev-share and it worked. We made more than $40 per join. Since then, we've selectively started doing rev-shares. Only with fresh sites that have custom content. Sites like CollegeFuckFest.com and HerFirstGangBang.com. These are the sites that have a strong enough retention rate to warrant a rev-share. So, our formula is now to do pay/join with the major programs and rev-share with smaller sites that have great content.
Sorry for the long post, just hoping our experience will help someone. In a nutshell, buying traffic can work well for you, just buy from reputable companies and cover your bases. Always ask for references and actually contact them. Don't ever buy traffic without a contract. There are companies out there like us that have good reasons to sell their traffic and won't screw you over. BUT, beware that it's the exception, not the norm.