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  1. #1
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    May 30th, 2008
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    8
    PPC or Volume bonus plan?
    I am currently re-developing an existing affiliate program.

    Some program info:
    Conversion rate: average of 14.53% (This month's top converter 30.77%, lowest converter at 1.13% - most conversions within range of 10 - 15%).
    Average conversion amount: $70(USD)

    Anticipated Commission structure:
    Commission structure will have 12% base commission, plus loyalty program of 1% total reffered sales revenue for year bonus payout.

    I am trying to decide whether to incorporate an additional bonus by volume plan or whether a PPC model would be more enticing.

    Volume Bonus would be: 2-5k, +1%
    5-10k, +1%
    10k +, +1% (Referred sales revenue)

    PPC would be: Penny per click

    Based on the information, which program would you choose?

    Thank you - your comments are most welcome.

  2. #2
    Moderator MichaelColey's Avatar
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    January 18th, 2005
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    Mansfield, TX
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    16,232
    I would avoid PPC. You'll end up with hundreds of affiliates generating thousands of clicks a day and no sales. Align your compensation with your profit and you'll have far less gaming of the system.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  3. #3
    Newbie
    Join Date
    May 30th, 2008
    Posts
    8
    Hi MichaelColey, thank you for your reply.

    I forgot to mention - PPC would be based on pay per 'unique' click model. The software we use can track IP's and has measures that will help identify click fraud.

    I am also looking at third party click fraud protection applications.

    You have a very valid point though - I would likely attract a number of sign ups with the sole intention to game the system on a PPC model - it could become an administration nightmare.

    Very good point - thank you.

  4. #4
    Moderator MichaelColey's Avatar
    Join Date
    January 18th, 2005
    Location
    Mansfield, TX
    Posts
    16,232
    Even without fraud, it rewards your poorest performers more than your best performers. For instance, just take a look at how much additional compensation your 30.77% converter would get compared to your 1.13% converter (or even a 0% converter with lots of clicks). Would it really motivate any actions that you want? I think not.
    Michael Coley
    Amazing-Bargains.com
     Affiliate Tips | Merchant Best Practices | Affiliate Friendly? | Couponing | CPA Networks? | ABW Tips | Activating Affiliates
    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

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