Affiliate Marketing as a CPA Sales Channel

According to a certain research CPA and CPS, models are the third most popular advertising methods of monetizing the site: 34% of webmasters use them. The CPA scheme makes possible working directly both with advertisers and networks of affiliate programs.

Affiliate marketing is a strategy for promoting Internet business that presupposes that the advertiser (seller) delegates part of the work on attracting customers to the affiliate. Affiliate marketing operates on the CPA/CPS models (Cost per action/Cost per sale). It means the affiliate receives a reward for the target actions of the clients attracted. Such actions include form filling, registration, purchase, subscription, an appointment of test-driving, file download, etc.

When choosing the form of cooperation, it should be taken into account that large advertisers mainly offer affiliate programs of highly specialized subjects and prefer to work with large suppliers of traffic. Such partnership is profitable only for the owners of sites designed for a specific audience and theme. Affiliate networks, on the contrary, offer programs on a variety of topics for any target audience, and also have a wide range of tools for automation of the working process and analysis of statistics.

There are a lot of various affiliate program aggregators. Over the last years, their popularity among webmasters has considerably grown.

Traffic Arbitrage is the most flexible approach to generate revenue from affiliate programs. Arbitrage agencies purchase traffic and redirect it to the advertiser's website for its further conversion. In this model, the webmaster is free to choose promotion platforms and tools that will help to achieve a high level of attendance of a site by the target audience. Unlike arbitrage specialists, the owners of the ready-made websites depend heavily on their target audience. Thus, among the main reasons for abandoning the CPA model, 26.6% of webmasters call “the lack of suitable advertising for the audience of the site”.

Webmaster that already has a website to generate the maximum revenue from the affiliate program should pay attention to the following key points:

Focus not on high-interest rates, but on the compliance of the product or service to the theme of the site, when choosing an affiliate program;

B2B products are poorly sold through affiliate programs; this model of online marketing "likes" simple products demanded by a retail buyer. The most active advertisers who use affiliate programs are: banks, e-commerce, FMCG, education, construction, forex, tourism, insurance, cosmetics, weight loss, employment, automobile industry;

Advertising of mass products (discounts, coupons, games, products) is best suited for the portals with high attendance and general thematic content;

It is preferable to start the acquaintance with the affiliate programs of the CPA model. In the CPS model (cost per sale) webmaster heavily depends on the marketing strategy of the company-advertiser as well as on the smooth operation of his or her website;

At each stage of arbitration it is necessary to test different offers, different audience sources, dozens of banners and teasers, landing page designs and with the help of tracking systems to monitor the effectiveness of the elements using;

The best traffic is the target traffic that goes to the partner's website from the page of search results upon specific search query or upon clicking on a link of contextual advertising in the advertising block. That is why the webmaster has to do SEO promotion of the site in search results.

Partners use the same tools as most direct online sellers. They are search engine optimization, email marketing, cash back, context, banner and Popup advertising. The effectiveness of each method of attracting visitors to the site depends heavily on the experience and ingenuity of the site owner.

Once there was a survey on the most profitable methods to make a profit from the CPA models. Webmasters call the following ones: Search optimization of thematic websites - 31%; context advertising and e-mail marketing - 20%. Promising sources of traffic are affiliate showcases and "micro-niche" sites that are focused on a narrow range of low-frequency queries, as well as cash-back sites, returning some part of the purchase amount to the buyer.

In addition, webmasters should pay attention to the following tools to effectively use the CPA model:

Deep link;

Banner rotator, including Smart Changer, is an intelligent rotator that automatically selects the most effective banners;

XML feeds: they allow uploading lists of products from several online stores according to the specified filters;

Analysis of traffic conversion and keyword statistics.

When choosing an affiliate program, you should carefully study the user agreement to assess all possible benefits and risks of cooperation.

Here are examples of favorable conditions that some affiliate programs offer:

Revenue Share scheme, which is often used by online gaming services, online casinos, poker rooms, forex companies. Here, the Affiliate's commission is formed as a percentage of the funds spent by the client on the service. Thus, even one attracted client brings regular income to the partner;

Referral program: its member may attract not only customers, but also lower-level partners, and receive remuneration for their work;

Payment of commissions not only for online but also for offline orders, for example, if the client has used the coupon received from the partner.

There is a number of difficulties that the site owner may face when participating in a particular affiliate program:

It is very difficult to predict income from affiliate program; the cycle of realization of benefits from investments made into the affiliate program can reach two months;

Last-Cookies-Win Rule: for example, the client went to the site with the help of webmaster's creative ingenuity, but he or she made the target action in the subsequent visit by clicking on the contextual advertising. Such a client does not count towards the partner, although he "warmed up" the client to purchase. There are also cases of intentional overwriting of Cookies when restoring the password to the client's personal account, which some marketers call "optimization". Unfortunately, the affiliate network cannot fight this. Affiliate network only decides to work with such advertisers or not. At the same time, to make a purchase one will have to register. After that, the user receives a letter with the news of the store. As soon as the user clicks on the creative from the mailing list - Cookies are deleted;

Delayed payments. Payment delays occur for various reasons, but usually due to delays in payment of the invoice by the advertiser. In this case, the network decides whether to pay or not itself. There were cases when advertisers acted with the affiliate network in bad faith, then if the network wants to save its blushes, it must pay. As to a large extent, this is a network's problem, not a webmaster's;

Penalties. Penalties are usually imposed if the affiliate violates the agreements between the affiliate network and the advertiser, in particular, the traffic conditions. In this case the webmaster may lose payments; moreover, his or her account may be blocked - it is a common practice;

Some advertisers impose restrictions on traffic, for example, the prohibition for contextual advertising on the brand. The stricter the restrictions, the harder it is for the webmaster to achieve high conversion.

It is also worth noting that about 33% of Internet entrepreneurs called "unpredictable and unstable income" the main reason not to use affiliate programs. But, as experts say the market of affiliate marketing and that of the lead generation finally got its shape and now continues to grow. The total annual turnover increases every year and is expected to be really great in 2018. It means webmasters have excellent opportunities to use affiliate programs to make a stable profit and to provide growth of income from the website.