How much is affiliate traffic REALLY worth?

[weekly]

Fifty per cent?
Twenty per cent?
or maybe ten per cent.

It seems that traffic is less valuable this year than it was five years ago. So what would be a good number? Programs are running out of gas and crashing. What can they actually afford?

[NickB.]

We pay 40-50$ PPS on trial joins

Loads of extremely valuable affiliates - great match

[Barefootsies]

A number of programs are moving their traffic generation in-house.

This reduces the importance of this industry's affiliate model and their position for the future. It also makes programs less dependent on paying the ransom traffic 'whales' are demanding, and have been, over the years.

Short answer,... it probably varies from program to program. Their importance is diminishing. Especially as more affiliates find it hard to make conversions and remain competitive in the 2009 market place.

[d-null]

a sale is a sale, if the affiliate hadn't sent that sale, then the percentage earned by the sponsor is zero percent, so there is nothing wrong with the 50% arrangement

[Smokieflame]

i dont have many but i offer my affiliates 50%, like he said 50% of 0 is a big fat 0, I would rather make $14.50 then nothing

[Ann-Angelcom]

Affiliate traffic is extremely important. Than you all who promote our sites. We appreciate your hard work!!!

[weekly]

Originally Posted by d-null

a sale is a sale, if the affiliate hadn't sent that sale, then the percentage earned by the sponsor is zero percent, so there is nothing wrong with the 50% arrangement

But what if programs move to generating their own traffic. Would that not be less expensive?

[Iron Fist]

I like revshare sponsors.... i've seen ALOT of programs who offer PPS crash and burn over the years, but they do it to themselves.... what do you expect paying $75 PPS of a $39.95 join which might chargeback in the end. No wonder some sponsors look negatively at affiliates...

Which is why I avoid "$200 PPS PROMO DAYS" and PPS in general... just smells to me like a program is on it's last legs and every sponsor that does PPS does cross sales... there is just no way to make PPS profitable without fucking over someone.

[kane]

Originally Posted by weekly

But what if programs move to generating their own traffic. Would that not be less expensive?

It all depends on how good they are at doing that. Say a program has 100 affiliates that are active and send a little traffic. Say these affiliates only send 2 sales per week to the program. That is 800 joins a month. Sure they could move that many joins in house. But what would be the cost of doing so. If they could hire a couple of people to work full time and generate that kind of traffic it is worth it. If they had to hire 30 people to do it, it isn't worth it.

Also, if you hire some people to generate that traffic, if they are good, you will have to pay a premium for them. If they can generate 300 sales a month they could be making 9-12K a month or more working on their own so I would assume you would have to pay them close to that to keep them.

[d-null]

Originally Posted by weekly

But what if programs move to generating their own traffic. Would that not be less expensive?

generating their own traffic, providing tools for affiliates to promote, hard to say what would be more expensive but any sale that an affiliate sends is still an extra sale, regardless of whether the sponsor has a shitload of their own traffic as well

[AmeliaG]

Originally Posted by weekly

Fifty per cent?
Twenty per cent?
or maybe ten per cent.

It seems that traffic is less valuable this year than it was five years ago. So what would be a good number? Programs are running out of gas and crashing. What can they actually afford?

Bandwidth is also cheaper than it was five years ago, so who cares if an affiliate uses up a bit more bw before making a sale. A sale is a sale and I love our affiliates. Just set your price point so you can afford to take care of the people who send you traffic.

[Thurbs]

Originally Posted by weekly

But what if programs move to generating their own traffic. Would that not be less expensive?

generating your own traffic and doing your adbuys is essentially just shifting the how you spend that same CPA in an effort to :

1. lower the average CPA paid when in comparison to affiliates CPA to acquire a join
2. be in control of the traffic, to allow you the time to develop products in a less complicated area ( Hard to tweak sites that 50% do well on and 50% doesn't , vs working on a site that you are the traffic pusher for aswell )
3. gain joins that you may not have had before, remember, even good sites may not always be a hit with the affiliate base, regardless of many reasons
4. reduce the overhead

remember a few things about traffic, nothing comes for free. alot of people say, oh they are making their own traffic, they don't need me. half the programs may be trying to, but not succeeding there either, its just as competitive to be the direct advertiser as the indirect or the publisher

prime example of this : pornhub sits on so much traffic inbound and outbound, they have 4 programs they can monetize all that traffic with. however, they know that dollar for dollar, they can't monetize it 100% all on their own, so they float some of that in to advertising you can buy, to round out the offering and increase their profit there to allow them to buy more traffic, start more projects.

[digitaldivas]

i don't list to DDO with under 50 percent anymore. And i pick all of my sponsors now.

[Paul Markham]

Originally Posted by weekly

But what if programs move to generating their own traffic. Would that not be less expensive?

IMO it depends on a few things, how good are you at generating traffic that does not cost as much as an affiliate, how well does your site convert and retain and more things.

If a site lost all traffic costs it could sell memberships at $10 a month no problem. The ratios would be better and the profit margin the same. I know this from the $5 sites you guys take the piss out of all the time. I can see why because if the business moved to this model it would be worse for you than Tubes. But the ratios are great on little traffic. Never pushed it because we never had the CMS to handle 200 sites which is what we planned.

The problem is directing traffic, buying ads and spots can cost as much affiliates. IMO sites like Paul Markham Teens need affiliates and we know from the traffic that types in or returns we could pay out more, might put up the rates soon for guys sending more than 10 hits a month.

Originally Posted by sharphead

I like revshare sponsors.... i've seen ALOT of programs who offer PPS crash and burn over the years, but they do it to themselves.... what do you expect paying $75 PPS of a $39.95 join which might chargeback in the end. No wonder some sponsors look negatively at affiliates...

Which is why I avoid "$200 PPS PROMO DAYS" and PPS in general... just smells to me like a program is on it's last legs and every sponsor that does PPS does cross sales... there is just no way to make PPS profitable without fucking over someone.

Rev Share is best for the industry. Normally PPS depends on the customer buying at least two memberships off the site to afford $39.95 at $75 even more and most of the time it's about selling more sites. Rev share depends customers staying as long as possible. One method is about up selling the other about retaining, guess which one is best in the long run? If a site does not satisfy the customer you should not be selling it, no matter what you get today. Because tomorrow he may decide not to buy anything and in a business that's totally about repeat sales customer satisfaction is essential.

Fucking over the customer is bad policy, but one many in porn don't care about.

[ParlourCash Karl]

We generate probably 95% of our own traffic, the other 5% comes from affiliates, obviously we wish affiliate traffic was more. We offer 50% and that is fair, it suprises me that many programs charge the affiliate for the processing fee or sometimes half.
We are even considering offering more to attract new affiliates. A lot of programes seem to forget that the good and honest affiliate need to earn money as well.

[FlexxAeon]

i never really got the whole "generating their own traffic" thing as being the ultimate out.

they'd have to compete for traffic the same way we do. they don't have some magic secret formula - they're gonna be posting galleries and blogging and link trading etc (or tubing but we've heard about those conversions). depending on how much they're paying a grunt, that wage has to get factored in, along with hosting, domain(s), and all the other ancillary costs that come with hiring someone to "generate traffic" and run sites. lord help them if they hire a guru - he's gonna want a serious salary

even if those costs balance out, seems like less of a headache to just manage nats and cut checks

[2012]

Are you a scumbag ?

Who's your affiliate ?

[2012]

as much as the sponsor wants to give the affiliate that month ~ about that much these days - what's your skim? stupid question

[Marialovesporn]

Originally Posted by AmeliaG

Bandwidth is also cheaper than it was five years ago, so who cares if an affiliate uses up a bit more bw before making a sale. A sale is a sale and I love our affiliates. Just set your price point so you can afford to take care of the people who send you traffic.

Hi Amelia, I tried to contact you on icq but I didnt work. Could you add me to icq please ? I am an affiliate and need some support

thanks,
icq: 260397194

by the way , sorry for hijacking the thread

[bdld]

i've noticed sponsors buying traffic/links more now than ever before.

[seeandsee]

Originally Posted by weekly

Fifty per cent?
Twenty per cent?
or maybe ten per cent.

It seems that traffic is less valuable this year than it was five years ago. So what would be a good number? Programs are running out of gas and crashing. What can they actually afford?

zero per cent

[Lace]

Originally Posted by Danielles Parlour

We generate probably 95% of our own traffic, the other 5% comes from affiliates, obviously we wish affiliate traffic was more. We offer 50% and that is fair, it suprises me that many programs charge the affiliate for the processing fee or sometimes half.
We are even considering offering more to attract new affiliates. A lot of programes seem to forget that the good and honest affiliate need to earn money as well.

No offense but your site could use some work. If you need any help, feel free to hit me up and I'll give you some ideas

[weekly]

Originally Posted by Paul Markham

IMO it depends on a few things, how good are you at generating traffic that does not cost as much as an affiliate, how well does your site convert and retain and more things.

If a site lost all traffic costs it could sell memberships at $10 a month no problem. The ratios would be better and the profit margin the same. I know this from the $5 sites you guys take the piss out of all the time. I can see why because if the business moved to this model it would be worse for you than Tubes. But the ratios are great on little traffic. Never pushed it because we never had the CMS to handle 200 sites which is what we planned.

The problem is directing traffic, buying ads and spots can cost as much affiliates. IMO sites like Paul Markham Teens need affiliates and we know from the traffic that types in or returns we could pay out more, might put up the rates soon for guys sending more than 10 hits a month.



Rev Share is best for the industry. Normally PPS depends on the customer buying at least two memberships off the site to afford $39.95 at $75 even more and most of the time it's about selling more sites. Rev share depends customers staying as long as possible. One method is about up selling the other about retaining, guess which one is best in the long run? If a site does not satisfy the customer you should not be selling it, no matter what you get today. Because tomorrow he may decide not to buy anything and in a business that's totally about repeat sales customer satisfaction is essential.

Fucking over the customer is bad policy, but one many in porn don't care about.

If you charge less for your memberships with no affiliate costs, do you earn more in the end? It would seem that volume sales from affiliates at a higher price would be more profitable. Huge sign up bonuses seem like a recipe for problems down the road.

[EscortBiz]

the generating in house traffic is a stupid thing to say is a big option, sure if you can do that why not but you will never beat the traffic 100's if not 1000's of affiliates can send you

I mean so lets break this in house traffic down a minute so you can see how fucking stupid some of you sound, first lets list some top places for traffic

SE
Blogs etc
Other members areas
Link lists
Tubes (promos)
TGP's
MGP's
Email marketing

So yeah as a program owner you do some SE on your own but come on I dont care how good you are if you have a solid affiliate program youll get 100x more SE traffic from them then you can generate on your own

Blogs - I mean what are you gonna do take over every blog? Pay every blog? I mean just fucking stupid, so yeah maybe you have a few in house but again youll never be able to get on the amount of blogs aff's will put you

Figure out the rest

Any normal sane person will understand that there is nothing wrong with affiliates and they make or break mosts sites (obviously those who only need 15 joins a week for crack dont need affiliates).

So my advice is if someone has good traffic and wants you to make an exception on payouts a increase etc do it etc

Obviously know your numbers and dont go broke

[Fletch XXX]

now more than ever watch out for traffic leaks on tours, like to their blogs etc...

[Iron Fist]

Originally Posted by Danielles Parlour

We generate probably 95% of our own traffic, the other 5% comes from affiliates, obviously we wish affiliate traffic was more. We offer 50% and that is fair, it suprises me that many programs charge the affiliate for the processing fee or sometimes half.

Danielle, I've seen your content on GFY here and clicked your links.. no doubt, I would LOVE to send you traffic, but your in a a niche I just do not promote and all my time goes strictly to promoting teen models and solo girls (I do this part time over the last 5 years). I do pretty good with it and i'm sure if I spent time and built up a MILF/Humiliation network, then I could send you plenty of traffic as well, but this would take me way too much time and effort in a niche that honestly, doesn't turn me on that much...

In the end it's gotta get me excited before i'll even think about sending traffic. But once i'm hooked, i'm hooked for a long long time.

Now if you were to throw on some costumes and maybe the odd schoolgirl uniform... well you'll get traffic tomorrow....

[Iron Fist]

Originally Posted by Fletch XXX

now more than ever watch out for traffic leaks on tours, like to their blogs etc...

And to Twitter, YouTube, and god knows what else... oh and that's not limited to the tours either... i've seen that shit inside members areas as well - linking to blogs.

And what disturbs me the most? HEAVY HEAVY HEAVY cross sells in the members areas to other sites in their network without referral links. An AWFUL lot of sites are doing this now... so I can see why affiliates go for the quick cash and move out instead of promoting revshare.

[weekly]

But what about the original question? It wasn't so much about whether affiliates traffic is profitable, but what is affordable in today's market. Should prices as well as per centages drop to compete with all the free product out there.

[Barefootsies]

Some of you are completely missing the point of in-house traffic generation. I'll keep it short for your comprehension level.

More control. Less unpredictability (affiliates jumping from one program to the next month to month).

No more being held ransom on PPS, or paid in advance for the month.

Better cost control.

The end.

No offense.

[FlexxAeon]

Originally Posted by Barefootsies

Some of you are completely missing the point of in-house traffic generation. I'll keep it short for your comprehension level.

More control. Less unpredictability (affiliates jumping from one program to the next month to month).

No more being held ransom on PPS, or paid in advance for the month.

Better cost control.

The end.

No offense.

More overhead

More employees (who are just as unpredictable)

More time spent on generating traffic than improving content, conversions

there's two sides to those coins

[DonovanTrent]

Originally Posted by Paul Markham

If a site lost all traffic costs it could sell memberships at $10 a month no problem. The ratios would be better and the profit margin the same. I know this from the $5 sites you guys take the piss out of all the time. I can see why because if the business moved to this model it would be worse for you than Tubes. But the ratios are great on little traffic.

I have to say that Paul could easily be right about this. Let's use the music business as a parallel. We're going to see more and more artists (program owners) going independent from the studios (affiliates) because they can make so much more money per unit (membership) by selling a far fewer number of units that THEY get all the profit on. The Internet allows them to do this, they can now market on their own vs. relying on the studios to do the work.

For most artists, the money comes from live performances. Many even LOSE money on studio releases because of all the upfront advances and costs the artist is saddled with (PPS model?). But once they're established, by going independent, they can continue making that same live performance dollar AND make money off their CD and digital releases.

Ask Prince how much money he made from his big-selling studio releases vs. how much money he made from the weird 2 and 3 CD sets he sold cheaply under his own name while independent. Those things weren't chart blockbusters, but he CLEANED UP.

Risk vs. reward. Having affiliates lowers your risk but you have to share the reward. If you can take on the risk of generating your own traffic, you can keep that portion. It all depends on how much risk a site owner is willing to take on, so the answer to the original question is "it depends."

[Barefootsies]

Originally Posted by FlexxAeon

there's two sides to those coins

Agreed.

However, there is also more stability. I would concede there is probably going to be less traffic bringing it in house. But then you no longer need to build your business model around $75-150 PPS, pre paid money to whales, or the fear that next month they pull all your traffic and you go out of business.

Bringing it in house is more conservative, and a more stable business model.

[weekly]

Bringing it in house is more conservative, and a more stable business model.

Not sure about the in house, but I think you nailed it on the stable and conservative. When any industry matures it needs to become more stable and by nature conservative. Software is a good example.
The chaff will get dusted off and producers will ultimately survive. There is a lot of dead men walking at the moment and boredom or lack of income will cause them to move on. It feels like we are in the middle of the big shakedown.
Perhaps the future is fewer affiliates earning the same per centages and making more money.

[Barefootsies]

Originally Posted by weekly

Not sure about the in house, but I think you nailed it on the stable and conservative. When any industry matures it needs to become more stable and by nature conservative. Software is a good example.
The chaff will get dusted off and producers will ultimately survive. There is a lot of dead men walking at the moment and boredom or lack of income will cause them to move on. It feels like we are in the middle of the big shakedown.
Perhaps the future is fewer affiliates earning the same per centages and making more money.

Summed up nicely.

[burntfilm]

especially important for a new program. We wouldn't have gotten anything done without affiliates

[FlexxAeon]

Originally Posted by Barefootsies

Agreed.

However, there is also more stability. I would concede there is probably going to be less traffic bringing it in house. But then you no longer need to build your business model around $75-150 PPS, pre paid money to whales, or the fear that next month they pull all your traffic and you go out of business.

Bringing it in house is more conservative, and a more stable business model.

i'll buy that but i'd attribute the flaw to the high PPS business model rather than the affiliate model as a whole

i'd rather that every program switched to revshare and focused more on making their members so orgasmically happy that they rebill forever, than to have to attribute a chunk of their resources to generating traffic

[weekly]

Originally Posted by FlexxAeon

i'll buy that but i'd attribute the flaw to the high PPS business model rather than the affiliate model as a whole

i'd rather that every program switched to revshare and focused more on making their members so orgasmically happy that they rebill forever, than to have to attribute a chunk of their resources to generating traffic

Then why don't you choose to promote only those programs? If more were to do that, perhaps things would change. Maybe that is the future. Like any other business, customer satisfaction wins.

[Agent 488]

as long as revenue generated by affiliates exceeds that of the costs of maintaining affiliates the model will survive.

[Juilan]

If you have a strong and well thought out brand, it's hard to calculate and quantify webmaster impact since affiliates can do more than simply bring in sales leads directly via there links.

[weekly]

Originally Posted by budsbabes

as long as revenue generated by affiliates exceeds that of the costs of maintaining affiliates the model will survive.

But is that becoming an issue at the moment? There are a lot of late payments, non payments and companies sinking like a sunset. The question is why. Is the affiliate model in its current state, broken?

[Agent 488]

Originally Posted by weekly

But is that becoming an issue at the moment? There are a lot of late payments, non payments and companies sinking like a sunset. The question is why. Is the affiliate model in its current state, broken?

once companies stop providing affiliate support you will know that it is not feasible for them to do so any more.

the issues you bring up have nothing to do with affiliates. you might want to look at an economy which has been shedding half a million plus jobs per month with foreclosure rates going up ten percent every month for some insight into their failure.

[fuzebox]

Originally Posted by FlexxAeon

i'll buy that but i'd attribute the flaw to the high PPS business model rather than the affiliate model as a whole

i'd rather that every program switched to revshare and focused more on making their members so orgasmically happy that they rebill forever, than to have to attribute a chunk of their resources to generating traffic

You know I read this a lot on GFY, but most the affiliates that are interested in promoting my sites contact me requesting PPS on trials. I'm going to have to implement it to be competitive.

[Webmaster Advertising]

Originally Posted by burntfilm

especially important for a new program. We wouldn't have gotten anything done without affiliates

Then you shouldnt have opened a program

To many programs are opening up without the owners being able to subsidize their own traffic/sales thinking that they can just throw a tour and a members area together and affiliates will make the money for them.

If you cant generate sales to your own sites then dont open a program because you are basically screwing your affiliates over for your own ends and in the process diluting the profits of the rest of the industry, there is a reason traffic is down at many of the largest programs that have been around for years, that reason is it became far to easy for people to launch thier own program with no knowledge of how to generate traffic or sales of their own.

[weekly]

Originally Posted by Webmaster Advertising

Then you shouldnt have opened a program

To many programs are opening up without the owners being able to subsidize their own traffic/sales thinking that they can just throw a tour and a members area together and affiliates will make the money for them.

If you cant generate sales to your own sites then dont open a program because you are basically screwing your affiliates over for your own ends and in the process diluting the profits of the rest of the industry, there is a reason traffic is down at many of the largest programs that have been around for years, that reason is it became far to easy for people to launch thier own program with no knowledge of how to generate traffic or sales of their own.

Pure affiliate marketing without self generation is certainly too expensive. I agree, if you can't market a high percentage of your own sales, you are not going to be profitable. Food for thought:

Percentage of gross sales/revenue:

This is probably the simplest method. Most experts recommend somewhere in the range of 2-8% of gross sales. McKinsey & Company is often quoted at 5%.

Most small businesses (less than $5 million gross revenue) should shoot for at least 7-8%.

Industry-specific:

Many industries have their own standard. For example:

* Consumer package goods: Up to 50% of projected net sales to launch a new product
* Industrial B-to-B: 1% of gross sales
* Retail: 4-10% of net revenues
* Banks/Credit Unions: 2-5% of assets
* Law firms: 1-4% of gross revenues
* Pharmaceuticals: Up to 20% of net sales
* Hospitals: 1% of net revenues

[Barefootsies]

Originally Posted by fuzebox

You know I read this a lot on GFY, but most the affiliates that are interested in promoting my sites contact me requesting PPS on trials. I'm going to have to implement it to be competitive.

[wargames]

Originally Posted by Thurbs

generating your own traffic and doing your adbuys is essentially just shifting the how you spend that same CPA in an effort to :

1. lower the average CPA paid when in comparison to affiliates CPA to acquire a join
2. be in control of the traffic, to allow you the time to develop products in a less complicated area ( Hard to tweak sites that 50% do well on and 50% doesn't , vs working on a site that you are the traffic pusher for aswell )
3. gain joins that you may not have had before, remember, even good sites may not always be a hit with the affiliate base, regardless of many reasons
4. reduce the overhead

remember a few things about traffic, nothing comes for free. alot of people say, oh they are making their own traffic, they don't need me. half the programs may be trying to, but not succeeding there either, its just as competitive to be the direct advertiser as the indirect or the publisher

prime example of this : pornhub sits on so much traffic inbound and outbound, they have 4 programs they can monetize all that traffic with. however, they know that dollar for dollar, they can't monetize it 100% all on their own, so they float some of that in to advertising you can buy, to round out the offering and increase their profit there to allow them to buy more traffic, start more projects.

Thurbs 100% on the money

[FlexxAeon]

Originally Posted by weekly

Then why don't you choose to promote only those programs? If more were to do that, perhaps things would change. Maybe that is the future. Like any other business, customer satisfaction wins.

Originally Posted by fuzebox

You know I read this a lot on GFY, but most the affiliates that are interested in promoting my sites contact me requesting PPS on trials. I'm going to have to implement it to be competitive.

well i am just one affiliate so speaking for myself. i'm taken what i'm given. i don't gravitate towards any program based on PPS vs. revshare. for me it's all about the content & niche. so i have a mix of revshares and PPS.

if a company offers PPS most times i take it so that I can feel out the initial conversion ratio without having to lose a lot of $/click on sites that don't retain. if it converts, and offers revshare, i will go rev for a least a short period of time so that i can see what their retention is like. there's quite a few programs that are ONLY pps and ONLY revshare. and i'm not the kind of whale that could/would call up a program that was rev only, demanding PPS.

again there are two sides to the story. assuming that most / all programs would prefer to be all rev share... how do i know that they're going to retain? the only way i'm going to know if it does is when i start throwing traffic at it, and it'll be months before i get an idea of a sites' retention rate. every program swears they convert and retain up the wazoo and that you'll make the most money with them and on and on. so while i'm not that webmaster that's gonna ask for crazy PPS numbers, the ones that are might have reason to want PPS for "trying you out". but again, this is not me.

if every program went revshare tomorrow you'd hear me crying the least of all people. but if a company wants to be revshare only then the primary focus should be on keeping members for as long as possible, not generating insane traffic numbers.

literally cuz i know quite little on running a program. just my observation. correct me where wrong

[IllTestYourGirls]

Has anyone said anything about how affiliates help with branding?

[weekly]

Originally Posted by IllTestYourGirls

Has anyone said anything about how affiliates help with branding?

Interesting point. How do they help? Branding is a decision made by the program owners I would think.

[Barefootsies]

Originally Posted by weekly

Interesting point. How do they help? Branding is a decision made by the program owners I would think.

Exactly right.

This is a business. It would be nice to see more business minded folk in this thread. The facts are the facts in 2009 and it is clear in the trades, and on the boards....

Programs can't keep afford to pay these affiliate ransoms for PPS. Period.

They are gouging their content budgets for traffic and crossing their toes for sales. It is not working. No new content. Rotating the old. Not rebilling for shit. Over reliance on cross sales and other tactics. Programs are teetering on collapse. Any good business owner would find a more reliable, stable, way of controlling costs and remaining in business especially in an ever competitive market place.

The time has come for change, and many of the affiliates are being squeezed out. It should be interesting to see who is left in this industry come Vegas show in January.