CPA Network Survival

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:

1. The Quality of the Companies (Advertisers) on their Network.  
2. The Quality & Quantity of Affiliates (Publishers) on their Network.
3. 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.

Comments

[Evan]

Adam great post...Oh sure they could step up and get those big players on board if they knew what to do! One of the problems is the publisher/affiliate managers at these cpa networks aren't very good or effective at relationship building and bonding with pubs. They take a "means to an end" approach which usually isn't very effective. Also a lot of "offers" don't convert as well as they could and the publish is sending traffic somewhere with poor conversion rates, which is never ideal. Brands tend to perform better which is desirable. I think brands are important to cpa networks but they will never really attain them because of NO publisher transparency which larger brands don't like, little fraud prevention and pub screening, and the majority of traffic is email marketing generated which a lot of brands aren't looking for.

[Adam Viener]

Evan,

I agree with what you are saying. I think at this point in the industry life cycle, it's going to be about more than "wooing" top affiliates, I think strategic acquisitions and consolation are going to be more important.

As far as Brand goes, I think there is a big difference between CPA networks trying to create a brand for themselves vs attracting big brand advertisers. I think they need to be able to differentiate themselves enough to be able to win big brand advertiser relationships in order to create a brand for themselves.

Adam

[Affiliate Management]

Ya sure, it's hard to look unique out there these days. I think the competition is good. I try to stay out of it lol for the most part although I have a lot of friends at the networks, I stick to the "major" networks where it's more controllable...

[meryem sahin]

u re right ! it is very hard to find unique

[Michael]

It is all about the industry you are in. Try to look at competitors and focus on your specific industry.