By Rich Gorman 21 Comments

It’s amazing how fast an industry can change when new regulations come down the pipeline and old regulations are enforced.

Just 3 years ago the Affiliate Summit was dominated by CPA Networks.  Azoogle, Copeac, CX Digital, and NeverBlue threw decadent revelries, boasting their unprecedented success.  Hubris born of success, these affiliate networks extended credit to shady advertisers, took on unprecedented risks, and went on with the same ole same ole…

Fast forward to today, the aforementioned networks are either out of business, going out of business, or doomed for worse.  At the 2012 NYC Affiliate Summit the few affiliate networks that were left over had changed the name of their business models from “CPA Network/Affiliate Network” to “performance marketing network.”   The usual suspects that exhibited  looked worried, suspicious, and overall uncomfortable.  Who can hardly blame them considering the zeitgeist of the times.  In fact, one of the well-known network owners (name confidential) told me in confidence that they’re in the process of folding up shop.  I don’t blame him, and am confident that his talent will take him far in life.  The end of an era….

There’s 3 reasons for the collapse of the CPA Networks:

1.  FTC civil actions against advertisers/affiliates/networks.

2.  Visa/MC tightened up their restrictions on merchant accounts, making it uber-difficult for small to medium sized advertisers to get approved for processing.

3.  Bad, non-diversified business models that were overwhelmingly dependent on free trial/biz-op advertisers.

The exciting news is that the wild-wild-west affiliate marketing days are over, making way for viable affiliate offers.  This year’s Affiliate Summit had a diversified group of vendors, traffic sources, and useful resources!!!  It was very exciting to see an industry focused on creating marketing programs that convert + add value to the consumer + pay heed to compliance.  That’s worth waking up to!!!

In the affiliate marketing world, free trial offers are all but dead.  The few that exist out there have low caps, scrub, or are off limits to 99.99% of affiliates.   The advertisers that still push trials are extremely well capitalized tier-1 brands, i.e.  Sensa, Force Factor, etc.   If you’re a run-of-the-mill affiliate there’s no way you’re gonna get your hands on these offers.

There’s still quite a few skin offers floating around as trials, notably because the trial/continuity model works well in that vertical.  Still though, it’s hard to get these offers up unless you are very well capitalized, and only a handful of seasoned affiliate have access to them.

While hard sales have been floating around the affiliate marketing world for years, they rarely gained traction.  The reason is that the offers with the highest return on affiliate’s traffic investment (free trials) will always gain yield.  It only makes sense for affiliates to run offers that will make them the most money.  That’s why free trials garnished nearly all of the sales on these channels.

With few trials in the market, traffic sources that historically didn’t back out hard sales are now backing out hard sales all day long!!!!  This is fantastic news because 1 hard sale is equivalent to 5 trial sales.  That’s right, hard sales are worth 5x that of trials.

Hard sales are working both domestically and internationally.  In fact, I was talking to Justin from At Cost Fulfillment last week about their distribution.  He noted that they’re manufacturing and shipping more CPS Green Coffee Bean Extract and Raspberry Keytone domestically than they had ever imagined.   Sure enough, I browsed around MSNBC.com, Weather.com, and other high volume media channels and quickly found a number of CPS advertisers with S I C K presale pages!!!

I am a HUGE fan of hard sales for the following reasons:

1.  When properly built, these offers are instantly profitable.  The average profit I’ve seen is around $18 per bottle BEFORE MONETIZATION, and with the right CPS traffic source, there’s thousands of orders available per day!!!  Do the math.

2.  I’ve seen as high as 9 partials for every sale.  With good monetization models in place, those 9 partials can turn into at least 3 or 4 orders, which is pretty much pure profit since you’re not paying out a CPS fee on your data.

3.  Unlimited processing from day one.  CPS offers pose very little processing risk, therefore almost any advertiser can get approved for a MID :)

4.  Less float time.  Free trial campaigns are a challenge because there’s a float time of up to 21 days.  That means that as an advertiser, you essentially become the bank for 21 days to your affiliates, manufacturer, fulfillment house, etc.  And more often than not your MIDs get frozen due to the extreme difficultly you’re faced with when mitigating chargeback exposure.  FORGET ABOUTTT ITTT!!!

If you’re looking to launch a CPS offer, you’re gonna have to create an extremely competitive offer in order to make it work.  You have to convert higher than everyone around you, meaning that there’s a lot of work that has to go under the hood of the offer.   If your tenacious it can be done, and it is definitely worth the wait :)

Cheers to the rise of the hard sale!!!