So MarcDe what went wrong and the old ARS sites as you had said became unprofitable and you removed them including the cheap trial payouts from the program? Currently there are like 100 sponsors doing the exactly same payouts, with much smaller volume and never run it to the same unprofitability problems, never reduce payouts, never tweak exits, upsales etc. Don't tell me they are more capable. Can someone just add 10-15 new sites and expect these variables to still work at the same rates?

For the record if there are some sponsors that fairly credit sales (no more than 5 in my mind now) ARS has to be one of them; but that's a very rare exception.

good question

Because of some decisions that were made in previous years, those sites were in chargeback trouble. The high level of chargebacks caused many issues with those sites ability to process, including the use of x sells. We felt that many changes would be FORCED upon this industry, unfortunately that never came to be. With the drastic change it allowed us to do some other things, including have a closer relationship with our content site operators. Storm Media is our new partner and my sister owns the company and that helps tremendously. It also allowed us to avoid the HUGE iBill problem that would have more than likely bankrupted our company (or been close). In the end, it was a VERY tough decision, but in the end it was most definitely the right decision. ARS still does great volume and still makes money and that will allow us to do the things we are working on doing!

In the next few months you will see an ARS that is bigger and MORE capable than any previous ARS and that will be in a large part due to our new relationship.

BTW, I appreciate your comment on our honesty. That is absolutely key for us! We know we'd be nowhere without our webmasters, therefore they are our most valuable asset and we take care of them! :)

You're assuming everyone makes 1.87 per sale on pop ups....my guess is alot of programs make way more than that.
It all depends on how aggressive your console chain is.

That was my guess, that the Global sites were in chargeback trouble and wouldn't be able to process.

BYOT was a great idea and made for great sales numbers...unfortunately it was just impossible for anyone to put together a back end to support it.

:2 cents:

Was part of this due to content? Not picking on the sites but i had heard they were not super strong on the content. Your sites now look a lot better on the tours and seem to have more content. Again just an observation from outside the sites.

When we ended the marketing relationship we had with another company that was running the affiliate program for Homegrown we had to start from zero. We decided the most fiscally responsible move for us was to wait and see how our own traffic numbers looked for a few months before we offered any sort of affiliate program.

Once we saw what was economically sound for us we decided on a pay per active signup. We paid $30 on a $34.95 monthly sign up from a $4.95 trial which was not a popular move with our prior program's affiliates that were once used to getting between $40 to $45 in the old program with pps on a free trial.

However, those that actually moved over found that they were making more money with the new program because suddenly there were far fewer chargebacks and credits.

Interesting to note, we didn't have any aggressive xsells going and we completely lost our mail list so we were mostly devoid of upsells other than our hard goods. For that reason, we had to look at the sustainability of launching a program based on our site sales / retention alone.

The most important number to look at is how much money do you earn, everything else is interesting for the sake of analysis to add predictability and improve averages but only that bottom line number tells you whether you are right or wrong.

Something to look forward to a couple times a year ;-)

Great thread :)

My program does $35 PPS/$20 per trial... In the early stages, I ran the numbers and the sites retained members long enough and converted trials at a rate where a profit would be had on the $35 PPS/$20 trial model. We did not offer PPS until we were sure that our sites had the trial conversion and retention rate to profit from PPS on the inital charges and rebills alone. We give the surfer what they want and what they are lead to expect from the tours (lots of fully downloadable high res videos). Therefore, chargebacks are nearly insignificant and rebills are there (its those damned returned checks that piss me off). On a side note, for those who don't know, I hear cc processors are easy on check acceptance becuase they profit from each returned check. Anyways, I feel its risky for a new program to come out with PPS until they have tested the site with revshare first. You would have to be extremely confident in your site(s) to offer PPs right off the bat. PPS is the way to go if you have lots of quality content, a solid plan to generate revenue from the members/ex-members/email addys in your system, and a history of good retention.

Marc De, thanks for the response

First of all, very nice thread.. loving it..

There is one thing I would like Marc to actually comment on, since I am unsure about that...

You talk about www sales which help boost profits. What EXACTLY do you count in those? Sales that are coming from people seeing an affiliate banner and typing in the url? Or sales that simply come from non-affiliates? Meaning traffic you generate yourself?

If it is the later, which I bet it is since I see no way of meassuring the first, then is it not lieing to yourself if you include those in your calculations?

Of course, SOME of those sales will be sales from people checking banners, but most of them will be totally non-referrered, no?

I know that your model shows that you can make enough using your own cross sells and mailing already (of course with $4.95 trials and $39.95 rebills, thats almost 20% more than Alex's spreadsheet's numbers), but I have heard many people say in this and another board's thread about the same subject that people seem to count a lot on those "www sales"...

So, to come to my point finally ;) ... If you depend on www sales to break even on pay per signup, why even bother opening a program? You would make more with just your www sales in the first place...

Things are not what they used to be back in the Wild Wild West. I was at the Webmaster Access watching the "State of the Industry" panel (a very esteemed panel I might add - Lensman, Tony Morgan, Mike Price, Paycom, and CCBill) and they all echoed the same thing. Payouts will lower - nobody wants to do it because they will look like the odd man out, but it's just a matter of time before everyone has to.

Come on...think about it...$40 on a $2.95 join?

What's funny is sponsor can shave the fuck ot of you and nobody will bitch, but if they are honest and lower payouts - you get two pages of fuckers on GFY talking out of their ass.

If you run a good revshare program (like we do) the webmasters will make the same amount of money over time. Bangbros or Meatcash are perfect examples of this.

Programs having to beat the surfers to death to be able to keep up that $35 payout is bad for the business IMO. The times are changing - people don't sign up and stay for 3 months like they used to.

There will be changes with the current PPS system and webmasters are going to have to live with it.

Personally, I would rather see everything go to good clean revshare rather than having programs shave or fudge numbers to keep up with the Joneses.

This thread is REALLY good, thanks Marc De for your input and thanks to J And A for opening the discussion up..

I think many of the big programs had to look toward internal traffic generation rather than external webmaster support once the suddenly huge amount of programs created so much choice for webmasters.

I have been reluctant to offer revshare for a number of reasons but the only reason we are considering offering it in the near future is because the quality and integrity of the traffic/webmaster seems higher. (Less people working for the quick buck and more willing to build an annuity...)

We listen to our surfers first and foremost. If we listened to the webmasters we would be paying 200% initial and 110% recurring for life... and I mean the life of the surfer not just the life of his membership.

Per your last paragraph. I always thought that PPS didn't take chargebacks/refunds out of the affiliate's pocket. As soon as the signup occurs they get their credit...whether that members charges back or not is something that the program has to deal with (eat the cost). Is this not how most PPS runs?

most don't

Very good questions Nathan

Many sponsors complain and stuff, but they leave money on the table. I have signed up with many sponsor sites that never mail current or canceled members, what better traffic is there then surfers that have purchased a membership before

this thread is dying for a bump.

I don't know the ratio but I do know that not all PPS eat those costs.

What have I learned thus far?

PPS is possible but very difficult. If done honestly, it absolutely requires certain variables to remain relatively constant and absolutely requires a lot of initial capital investment, as you have to be prepared to take a loss at least in the first month until the rebills kick in. And that doesn't include any overhead such as content, maintenance, chargebacks/refunds (for every refund, you have to make about 3 new sales to cover it and regain profit - affiliate gets paid, user gets his money back, chargeback fee gets covered), staff (if you have even one staff member making $30k per year, that's a lot of sales you're going to need to cover just that one staff member. If you have 5-10 staff members, you're going to need a whole lot more). If one was to map this into a graph the numbers would be staggering.

Variables that must stay constant include the ratio of trial to full joins, the ratio of cross sells to full join, the rebill rate, and the low chargeback/refunds (theoretically cbs/refunds should not be a factor because the number should be so small compared to overall sales).

Now the example given was $4.95 trial, $39.99 full subscription. Is this the norm? Are most sites charging $40 for 1 month of access these days? I was thinking around $29.99 or mid 30's at most. Changing the cost of the subscription will also dramatically affect the ability to do PPS. Charging $39.99 and paying out $35 on the $4.95 trial seems like it can work, though it would be effortful. Then can $40-$50 be paid on $4.95 trials that recur at say $29.99 or less?

One question for Marc. Were payouts such as $50-$75 PPS ever reasonable or were such high payouts simply off the chart and not possible to do in your opinion? We used to see many programs with those numbers 2 years ago. They're almost non-existent today.

Any program owner with a brain at all should have a solid spreadsheet to go by.

It's not like anybody is likely to get caught shaving. We all saw PIBCash's admin panel, yet they were doing fine before we all got a firsthand view at the shaving.

Is there any merit to Lensman's comment/challenge in the original thread where he stated Adult.com was going to use NAT's where he said something to the effect "Let's see how many other PPS programs paying what we do use NATS"?

Great thread indeed everybody.
And thumbs up to Marc De for his business acumen, and I'm not talking about his numbers only :)

Actually, just noticed that marc did say that his www sales only seem to be sales from people seeing a banner but not clicking it and going there now. I have no idea how he meassures this though, kinda weird to me.

Also no idea how he meassures that his program does correctly track 99% of the clicked referrals. I do not really understand how he knows that. There are always issues with that kind of stuff of course.

I second that :)

he most likely mean sales when the surfer dont sign-up instantly but days or weeks later, or even months, he knows the URL already, when the site has a good easy to remeber domain. Or the same surfer recommends the site to his friend, etc...

Read again.

many of the programs that were paying more then $50 a join were doing their own billing you can draw your own conclusions from that

$50-70+ pps is recruiting affiliates / generating hype (probably short-term), shaving and/or bad business.

Nothing wrong either with doing your own billing but the problem is those that were doing their own billing and being deceptive were in for the quick buck and are also the ones that have contributed to the stain that this industry is labled for with regards to processing.

Nathan, www sales are sales tracked from the type in of a domain. ie - the warning page has an account number on it that is an internal account number (not paid on) and you can track the productivity of that traffic.

Traffic generated from internal sources should NOT be used in determining the profitability of a PPS program. The reason www sales are calculated is because of the high visibility of the sites from being in a program, you get return customers and SE indexes from a lot of links that is in essence 'free'. www sales calculate a portion of the additional income category which include:

www sales
exit consoles
members upsells
mailing
other advertising avenues

I hope that helps :)

Why? Very few people are paying $40 om 2.95 trial .You picked an extreme that almost no one does to provide propaganda. Read the thread. Lots of us are making 30-35 per join with Lightspeed on his revshare and he keeps xsales and other stuff to himself. A PPS just pays us sooner to keep the webmasters happy.

Far-L, if you are referring to CeCash they have not paid $40 on a free trial for years. It is $25 for a free trial signup.

$35 PPS keeps the program honest in that they have to give the surfer what they were looking for. They need retention. 50% revshare with ccBill is for the mom and pop. Sometimes the site is good and you can pull close to $35 but 90% of the time after fees you are in the 20-25 range (persoanlly $23 for the year).
Webmasters use stats tools and those programs that give an accurate unique count and a high payout just get more traffic. Name the top three programs and look at how they got there.

Unfortunately these people were charging the surfer over $100 on the initial sign up with MULTIPLE cross sales. This really put a hurt on this business but that didn't stop people from cashing in on the $50 payouts... That is not about longevity at all.

We've used $75-100 payouts in the past as loss leaders to get people to look at our program. As you can see its become a staple of affiliate program marketing now, just like skinning boards and rewards points ;)

The reason we can track program accuracy is because we use referral links for EVERYTHING, including our own traffic. As I stated before, if you go to the www of any of the sites in the ARS program you'll see the warning page. When you click the 'ENTER' link it is a referral link with an internal account number. Its very easy to track these types of things.

like the great people of stiffycash :)

You'd be surprised how many program operators you just insulted hehe :)

That is what I like to refer to as the gravy or is it a 36 in plasma or 42 in plasma this week....LOL

even if you don't do that... every sale that is not bought in by a webmaster who gets no credit on a sale is a "www sale"...
not even need to track those.. :)

pps makes loads, if you know how to work the traffic