While companies trim the fat off their marketing plans in attempts to survive the tough economy, one segment of their ad budget is increasing. Pay Per Performance marketing spend is up as big business is starting to understand how simple it is to leverage huge bases of skilled affiliate marketers.
The ROI driven mindset of the affiliate world is providing traditional media advertisers with a simple way to run and scale effective campaigns to the 36,000ft level.
As companies shift spend from “Branding” spend to “Performance Based Spend” they suddenly end up with a magical row of numbers at the bottom of their advertising spend report – Profit per Dollar Spent – return on ad spend in black and white. Finally something we can graph, optimize, and improve on.
Because advertisers only pay affiliates when a certain set of actions are completed by a surfer (submit contact form, place an order, etc), money is only spent when a sale or lead is generated, something most ad executives still can’t get their head around.
Publishers (websites, blogs, etc) stand to benefit as more advertisers shift into pay per action models. New ad networks for publishers that self optimize ads to your content based on profitability are on the way. Profits will drive progress in the technology. The difference between the have and have nots will start to become more clear as complex traffic management will be required to optimize earnings on the affiliate offers you’re promoting.
For Advertisers to properly leverage affiliate marketing, business owners need to determine their own internal cost per sale first. If you find it takes you $50.00 of combined effort and marketing spend to generate $100.00 of profit you should be happy to pay me $45.00 for every sale I can generate. If I can generate 10 times more sales than you because I’m a professional affiliate and you’re a professional widget maker, you can focus on your new clients widgets and I can focus on driving traffic and sales.
The key to scalability in your marketing plan is finding 5 – 10 – or 100 affiliates just like me who can provide the volume necessary to meet your revenue and profit goals.
The Affiliate Marketing world has taken control of almost every ad platform. Having an affiliate program is not just about scalability – if you aren’t using affiliates who are competing against each other to market your products, you’re effectively competing against the whole world alone, and you will not win. Take advantage of the competition between affiliate marketers and only spend money for profitable sales.
Related posts:
The blog of a nomadic internet marketer, web host owner, dating site owner and web developer.
Great post I am starting to think that pay per performance is the way to go these days.
Instead of getting a commission for an outright sale only. Getting a commission generated by a simple click through to a vendors site might be more profitable long term.
Cost per action is definitely something I will be trying to implement more of on my blog due to the higher rewards. Similar to the Google adsense business model.
Nice post!
Great post Jay! Debt offers and other loan offers may start building momentum
i signed up with the Amazon Omakaze affiliate program. i am not yet earning from this affiliate program because my blog is still very new. how long does it take to start making money with Amazon?
i have just signed up with the amazon affiliate program and i am still not earning a good deal of cash from them.
My profits are down and bizopps that would have perhaps done well a year ago are now not allowed on Google Adwords. What type of offers are working for you?
Amazon Affiliate program pays much better than other affiliate programs out there.