In five year’s time, will the [CPS or CPA] side of the performance marketing industry be bigger in the USA than it is now? If so, what will drive that growth?
As the entire online acquisition channel develops, the performance marketing side will grow at least at the same pace if not even faster due to its focus on ROI and measurability. Both CPS and CPA will be around; CPS will become the standard for the ultimate conversion goals and will be based on the data gathered from the customer journey – multiple attribution may become mainstream in 5 years’ time.
In parallel, CPA will continue to be specific for certain verticals among which the most interesting may be the B2B one whose transition from offline to online customer acquisition could determine an increased demand in lead generation publishers. In this context, as we’ve already seen, for mature companies with a proven performance marketing channel, CPS is replacing CPA or, at least, becomes the main goal.
How can an advertiser tell the difference between a good network and a poor one?
From a platform point of view, a good network should meet the advertiser’s current and medium term needs – affiliates management tools, communication tools, reporting, etc. In terms of the business perspective, it should certainly have the niche affiliates that can drive revenue for the advertiser (I’m talking here about the specialized content affiliates in particular), offer recruitment possibilities for the advertiser and also be able to deliver quality support and services – e.g. managed affiliate services. Plus, the advertiser should check which of their competitors are using the network in question.
Are affiliates right to worry about their commissions being affected by shaving and scrubbing? If so, what should they do about it?
As long as the advertisers have clear T&Cs for their affiliate program, affiliates shouldn’t be worried about scrubbing – after all, they are the ones generating that traffic (and its quality) and it’s their choice where they send their traffic. To avoid being affected by scrubbing, affiliates should better qualify the traffic they send to the advertisers’ pages.
With shaving it’s another story – most networks & advertisers will not admit they’re doing that, so affiliates should definitely split test the promotion of offers and be in touch with other affiliates working the same verticals.
What do you see as the key differentiators between the leading CPS networks?
When you look at the top 5 CPS networks from the type of products / services being promoted, you can see that 80% of affiliates work with networks that approach all sort of products and services and 20% are specialized on one niche (in this case – digital goods). If you look at the business model, we have 60% “classic” affiliate networks and 40% marketplace-based affiliate networks. Clearly each of the leading CPS networks have a strong community & ecosystem behind them. So, as key differentiators, I would name the addressable products / services range and the business model.
Is it possible for the performance marketing industry to police itself in any meaningful way?
Since there isn’t any globally accepted authority that oversees the compliance in performance marketing, any “classic” way of policing / regulating is not possible. But I think the performance marketing industry is in an ongoing process of policing itself or at least separating the “good” from the “bad” (in terms of compliance) and making sure that the majority of the players comply with the generally accepted rules. Organizations such as the Performance Marketing Association help with that endeavor.