Chris Trayhorn wrote an interesting CPA Survivor article for mThink, in which he looks at the landscape of CPA networks and the number of failing networks and those that are "refinancing, merging or crouching in a defensive posture" and questions which ones will survive.
Chris believes that BRAND is the key to survival in the CPA network space. While I think having a good brand is important for standing out from the crowd, I believe that in this space brand is but one small piece of the puzzle and won't be the key to survival and it's hard to create a real brand without differentiation!
For too long the CPA networks that have been popping up have been focusing on "offers" and pushing the same offers that can be found in almost all of the other networks. In fact a lot of the platforms are specifically setup to be able to share these offers from one network to the other. This has lead to the commoditization of the networks.
Traditional affiliate networks have always stood out by 3 main factors:
- The Quality of the Companies (Advertisers) on their Network.
- The Quality & Quantity of Affiliates (Publishers) on their Network.
- The Confidence in their Tracking and Payment Technologies.
Of course there are other factors, but these are the 3 key points.
So how does a CPA network make the transition and secure their place along the sides of Commission Junction, Linkshare and the likes?
Here is what I would do to change the game:
Exclusive Distribution Partners
For a long time networks have focused on bringing in the top advertisers, and affiliates have come to those networks in order to be able to promote them. Now that the industry has matured, these top Advertisers are finding that 5% of their affiliate partners are driving 95% of their sales. The network that controls these 5% of top affiliates writes the rules going forward. The market is fragmented, and many of these top affiliates are ripe for acquisition. A strong network with good cash flow could acquire these top affiliates and would find it a lot easier to win the exclusive relationships needed to differentiate themselves from the pack.