Hydra Networks has announced that with immediate effect it has terminated the accounts of over 15,000 publishers. The news comes as part of a new push by Hydra to attract mainstream brand advertisers and set themselves apart from “ad networks peddling nutraceutical diet remedies, cash grant opportunities, tooth whiteners and other non-branded campaigns of low consumer value.”
This rush to quality on the part of one of the biggest networks around can be seen as a new stratification of the performance marketing industry. At the high end we are likely to see more big, invitation-only networks focusing on serving major brands. At the lower end we are going to see a bunch of CPA networks scrabbling to sell the slew of new make-money-online products from various online marketing gurus as publishers and networks look to make up for lost rebill income.
Rebill offers provided many with massive returns for little effort, but have been followed by a matching contraction in the marketplace as the credit card companies and the FTC have clamped down. It’s no secret that many of the CPA networks that sprang up in the last 12 months are now in trouble.
The offers they were running last year became commoditized with the result that the networks had to chase traffic volume via ever-increasing publisher payouts. Margins got squeezed, more networks entered the fray, and then the FTC came calling. For some, the last few months have been a great time to catch up on their tan in Costa Rica while waiting for the fuss to die down.
But Hydra is making a clear statement that they want to be seen as the leaders at the other end of the market. Our view is that this is the right approach for the industry. You may remember Jason Calacanis upsetting a few people at the Affiliate Summit a couple of years back with his statement that affiliate marketers needed to stop thinking small.
He’s been proved right. The industry made a few quick bucks, but many of those gains have been lost again.
Now though, as the economy recovers, big brands and their agencies – and their absolutely enormous budgets – will be looking for real ROI from their marketing. The performance marketing industry needs to grow up, put away the childish toys, and make some real money by delivering that ROI to them.