There is a big divide in the performance marketing industry between the CPA networks and those that focus on cost-per-sale as a business model.
CPA networks are in a daily dog fight, with a couple of dozen long-standing, stable networks competing with hundreds of pop-up generics with not much experience or capital. On the cost-per-sale side, life is different. CPS networks face a situation in which the levels of service required to support small retailers, and the scale needed to handle huge ones, work in combination to erect significant barriers to entry by new networks. Thus we find a few behemoths dominating the sector, with niche and specialist networks filling in the gaps.
But the question then becomes, how to differentiate when the big networks all appear to do everything, and the niche networks are so focused? What are the key factors that advertisers and publishers should examine when choosing a new CPS network partner?
We asked the members of our Blue Ribbon Panel for their thoughts on this critical issue. We are particularly pleased to welcome Linda Woods of Madrivo onto the Panel, together with Clickbooth’s Erin Cigich, Melissa Feemster of Rakuten Affiliate Network, co-founder of W4 Jason Durant Walker, Cristian Miculi of Avangate and Matt Frary of SmarterChaos.
mThink: So, CPS networks. They all seem quite competent and professional compared to some of the CPA networks. So what are the important differentiators to which potential partners should pay attention?
Linda Woods: In one word, attribution. There is a strong dividing line between older legacy networks that don’t offer this key differentiator and newer, innovative networks that do. Retailers want increasingly granular looks at the consumer’s path to the buy button. They want to be able to both track that path accurately and to pay for the traffic in a commensurate way. It’s not a simple proposition with today’s buying habits. Imagine a typical customer who jumps from a blog to a coupon site whttp://mthink.com/wp-admin/post.php?post=10005&action=edit#wpseo_generalhile browsing her phone at lunch. Then she hits another review site and an additional coupon site on her tablet during the train ride home. Finally, she opens her laptop and goes direct to the retailer’s site where an affiliate toolbar pops up with a code and the purchase was then completed. Was the customer journey tracked on all devices? Who gets credit for influencing the consumer to buy? More importantly, how much is a fair commission to the influencer (or influencers) for that customer’s purchase? The jury is still out on exactly how to answer that question and there is no “one size fits all,” but without cross channel/cross device tracking attribution statistics, you can’t even start the conversation.
Melissa Feemster: I agree that technology investment and a focus on innovation are critical, and in order to maintain those investments in the long term, a network also needs scale and availability of capital. Those are the main factors that separate the leading CPS networks in the space today.
Erin Cigich: Better attribution leads to a proper focus on the quality of traffic. The days of paying one rate to all partners (even within a network) and expecting the same results are over. The marketplace is evolving to a smarter marketplace and a disruption of the norm is being demanded. As performance marketers we’re sitting in the middle of billions of data points that go unused every day. Real time, value based pricing has to be our new standard. The single biggest differentiator for a network is quality.
Linda Woods: It’s not good enough anymore to simply “believe” that coupons are not driving valuable traffic, or that blogs don’t play a part in the purchase stream. Without good attribution stats, there’s no way to understand the customer’s journey or which referrer played a role in the purchase process or even which marketing channel to credit. Networks that can facilitate this kind of advanced, cross-platform tracking are leading the pack right now – even as they continue to refine the technical process and decode a strategy for how to use all of the data they now have access to. In addition of course, a good affiliate manager or outsourced program manager (OPM) can really help you figure out what’s best for your company.
Matt Frary: For me the key differentiator between the leading CPS networks is primarily their level of service, their willingness to assign a contact to you, and how much they add value to your business. If a network doesn’t add value, then why not just work with the advertiser directly?
Cristian Miculi: 80% of affiliates work with huge networks that handle all sorts of products and services, while 20% specialize in a particular niche, with digital goods being an especially vibrant sector. Each of the leading CPS networks has a strong community & ecosystem supporting them so focusing on which addressable product/service sectors they specialize is a big first step.
Jason Durant Walker: As is true of any marketing media decision, you need to consider the audience you need to reach, the capabilities required, and your budget in order to determine which CPS network is the best fit. Are you a big brand and want to unleash a major campaign on a CPS network that offers the greatest scale and for which money is no object? Or, are you more interested in targeting specific affiliates and have a more limited budget? While the main players are all relatively comparable, there are differences—in fees, availability of help from a dedicated account rep, tracking and affiliate base. For example, one is seen as offering the most accurate tracking while another is more flexible in passing through external ad tracking tags. You need to identify your needs and then match them to the right network.
mThink: As we stated at the beginning of this piece, CPA netowrks are competing in a different way to their CPA brethren. Cost-per-sale is inherently more complicated, and with the huge e-commerce companies now using the big CPS platforms from networks such as Rakuten Affiliate Network and CJ, the challenge of attribution in a multi-platform, multi-channel world is going to demand even higher levels of investment and capitalization. In the performance marketing industry, the CPS networks are breaking new ground.