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  1. #1
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    January 18th, 2005
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    Are Default Rates Increasing with CPA Networks?
    My questions: Are web publishers seeing an increased "payment default rate" by advertisers?

    I thought I had noticed an increased number of reports of non-payment or late payment by a few CPA networks, but a quick check turns up only a few such reports recently (mostly from newbies with no credibility):

    MediaWhiz/ShoppingAds
    TrafficNeeds
    BulletAds
    XY7

    Maybe I'm missing some threads in other sub-forums?

    Of course, in any industry with thousands of participants, there will always be at least a few dozen business failures every year; I would expect that the current recession may increase that number.

    I also suspect that during a recession, some ad networks with "unsold inventory" may choose to accept "chancier" advertisers and may tolerate slightly longer payment delays.

    And of course, most of the CPA networks participate in an advertising "chain" that may involve three, five, or even ten intermediaries between the actual advertiser and the web publisher. A default at any level cascades to the lower levels.

    Being a cynic, I also wonder if some unethical CPA networks are deliberately circulating rumors (true or not) about their competitors in order to try to gain an advantage. (This seems likely to be a bad strategy since most web publishers are already highly "wary" of all CPA networks, and each default probably hurts all the remaining networks.)

    Thoughts? Feedback?

  2. #2
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    August 3rd, 2009
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    Mark, a very valid point put across, and infact I'm glad that it is finally put up by someone on the forum. I have seen various reports, even about my network, which are nothing but rumors spread across.

    Every network that is around, has publishers (obviously) and merchants and that is how they're running the network. The main thing that comes here is, fraudulent publishers who obviously will not be paid if tracked down. They come up with rants here and there spreading all the negativity, whereas all the other legit (satisfied) publishers who are readily working with the network quietly mind their business and make money.

    I do not deny networks that do not pay. Yes, there are some. But it's not right to question the credibility of a network without valid proof. I can't say about others but xy7 and bluephoenixmedia are good networks and are very much in business. I can say so because these run on DirectTrack platform (we do too) and we also do some business together.

    There are some delays in payment when advertiser holds it back, but it doesn't mean that the network is 'fraud'!

    I obviously cannot commit for others, but I personally have experienced these rants/complaints and infact, this is the main reason why I started staying active on various top forums. I came across people on forums that weren't even our publishers. Fake snapshots of stats, stupid complaints etc.

    I am not trying to offend anyone, but genuine request to everyone, please do not trust all comments without proof. Stay in touch with your AM as much as possible for updates.

    In the end, I would like to wish everyone here Happy Diwali from India

  3. #3
    ABW Ambassador Joshua's Avatar
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    August 17th, 2006
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    Quote Originally Posted by markwelch
    My questions: Are web publishers seeing an increased "payment default rate" by advertisers?

    I thought I had noticed an increased number of reports of non-payment or late payment by a few CPA networks, but a quick check turns up only a few such reports recently (mostly from newbies with no credibility):

    MediaWhiz/ShoppingAds
    TrafficNeeds
    BulletAds
    XY7

    Maybe I'm missing some threads in other sub-forums?

    Of course, in any industry with thousands of participants, there will always be at least a few dozen business failures every year; I would expect that the current recession may increase that number.

    I also suspect that during a recession, some ad networks with "unsold inventory" may choose to accept "chancier" advertisers and may tolerate slightly longer payment delays.

    And of course, most of the CPA networks participate in an advertising "chain" that may involve three, five, or even ten intermediaries between the actual advertiser and the web publisher. A default at any level cascades to the lower levels.

    Being a cynic, I also wonder if some unethical CPA networks are deliberately circulating rumors (true or not) about their competitors in order to try to gain an advantage. (This seems likely to be a bad strategy since most web publishers are already highly "wary" of all CPA networks, and each default probably hurts all the remaining networks.)

    Thoughts? Feedback?
    I don't believe we're seeing that. The posts you referenced weren't very good, as you inferred - The ShoppingAds post simply asked if other affiliates had been paid. If you read the CJ forum at another internet marketing forum, there are tons of new threads every month (mostly by newbies or international affiliates) asking if CJ paid out. Traffic Needs - Legit. They weren't really a network, but a direct-rebill advertiser with numerous products. They apparently got shut down by their merchant processor since they ran shady rebill offers without the proper merchant account distribution/setup, and went out of business stiffing many CPA networks and direct affiliates in the process. Once their 100% merchant account holdback clears in 6 months, affiliates might be able to get paid a % of what they're owed after all chargebacks are processed from the reserve.

    As for the XY7 post, the poster never said there was a payment problem, and Chuck made a very uneducated & uninformed post assuming they were a fly-by-night network that went under. XY7 is actually one of the older CPA networks around (since 2001 or 2002 I think... I still get emails from their AMs, though they get filtered straight to my trash folder).

    Bullet Ads? Yeah, looks like a failed network to me. With entry barriers so low to becoming a network, you're bound to have shady or fly by night networks in the space. If a network is paying out weekly to large affiliates, then gets stiffed by an advertiser, the smaller networks without adequate capital reserves and credit can easily go under - Lesson to be learned is work with established companies, and do your research.

    CPA networks tend to get tossed under the bus here, but this can happen with brand name advertisers in large networks that extend advertisers credit, as well. As for an unrelated point about CPA vs. traditional networks, I was talking with an AM of a program I used to promote in ShareASale (that was shut down there, but is still active in CPA networks). The reasoning behind why they shut down the SAS program but kept the deal in the few CPA networks they were also in? Too much affiliate fraud in their ShareASale program.

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