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  1. #1
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    Making it Fly ASAP
    Hi.

    Recently, I've been given to job to spearhead a new Online Trading Company's Affiliate Program. My intention is to make it a really top notch program...but I have a few questions.

    The business is an online trading site - where much like a online casino - a percentage of the "house" earnings is shared / or a one time Cash "reward" is granted once a new player has been registered (via the affiliate). Like ebay - a certain amount of internal activity must take place before the commission is generated. Basically, the company can afford to share around 15% with its Affiliates. This can be a lot of money. This site is not for the traditional Online Trader - but for the individual who has a credit card, puts down $500 - leverages it by 100 - and wins big or loses part/whole of his investment. The Affiliate would earn from the trader's losses (which is the vast majority of people) or on trader registrations.

    QUESTION: My want is to create an Internal Program...but at the same time register at the Networks to get the word out faster. Is this done?

    After a bit of research, I've seen its one or the other - its either totally internal or outsourced. The advantage of having an internal program is that (I think) we can give everyone 2 tiers - which not all of the major networks allow for (?). We may also be able to make some template sites as well...which might be difficult to source affiliates with thru CJ, SAS, etc.

    PROGRAM FEATURES.

    The following is what I've thought of so far:

    1. 2 Tiers: 15% 1st Tier 5% 2nd Tier
    2. 1-2 Year Cookie
    3. Obviously a wide range of links, banners to key pages.

    Any other suggestions?

    I think I'll advertise on this site in the near future - but the site is not 100% launched yet.

    Thanks for any and all tips!

    -MCO
    Last edited by MCO; May 11th, 2006 at 05:53 AM.

  2. #2
    AM Navigator Geno Prussakov's Avatar
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    MCO,

    First of all, welcome to ABW!

    Quote Originally Posted by MCO
    ...The advantage of having an internal program is that (I think) we can give everyone 2 tiers - which not all of the major networks allow for (?)...
    Incorrect. 2nd tier is hardly an advantage at all. By the way, networks do provide for it... But it's not about that tier at all. Frankly, if you can, don't even start with it. Better offer a higher one tier commission than have the 2nd tier there. Practice shows, affiliates don't like it. Who would? Everyone wants to get paid 100% for their work, not 80 or 70%, giving the rest to some other guy whose link they happened to click before they joined your program... Cutting the long story short and having no desire to repeat what once has already been said, here are the discussions you want to have a thorough look through before taking the next step:

    - Network or In-House? [with poll]

    - Inhouse vs. Network Affiliate Programs. Your Preference?

    Hope this is of help and good luck developping your program, MCO!!

    Geno

  3. #3
    Affiliate Marketing Consultant Andy Rodriguez's Avatar
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    What Geno said.... 100%
    Andy Rodriguez Consulting, Affiliate Program Management and Consulting Services, Since 2001
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  4. #4
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    Hi guys...thanks for your responses.

    Yeah...regarding tier 2, I've read similar comments in the other merchant discussions and I understand that logic for the independent affiliate marketer. My original thoughts were that we would only offer the 2nd tier option on the inhouse program...while on the big networks we would just offer 1 tier.

    But regarding an inhouse and an outsourced program (ie. networks), why doesn't anyone do that? Isn't that a great marketing intitative for a Merchant - to register on CJ as an example - get a tremendous amount of attention from quality affiliates - and at the same time build independently in other directions with the inhouse program?

    Thanks...I've seen you guys are professionals and very much value your advice.

    -MCO

  5. #5
    Moderator MichaelColey's Avatar
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    Quote Originally Posted by MCO
    The Affiliate would earn from the trader's losses (which is the vast majority of people)
    You'll be fighting an uphill battle right there. There are affiliates who will promote things that aren't good for their customers, but I would like to think that most of us are more ethical than that.

    I think Andy and Geno addressed your two-tier plan, but I'll echo in as well. Two-tier plans generally aren't desired or accepted by affiliates. There are some affiliates who like two-tier programs (directories and affiliates who work with webmasters or other affiliates), but considerably more despise two-tier programs. Why would I promote you for a 15% commission (and someone getting 5% for referring me) if I could promote your competitor (who doesn't have a two-tier program) for 20%?

    As for running both a network and in-house progam, it is done but not very widely. First, many networks don't like the practice and some prohibit it. If you use the network for recruiting and then siphon off the best performers to your in-house program, how does the network make anything? Second, affiliates are becoming less and less receptive to merchants who have more than one affiliate program. Many of the merchants with multiple affiliate programs are heavily infested with parasites, plus we've seen many cases where tons of reverals are run through because there was a cookie from another network. Multiple programs are far less transparent.
    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

  6. #6
    Resident Genius and Staunch Capitalist Leader's Avatar
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    plus we've seen many cases where tons of reverals are run through because there was a cookie from another network.
    Agreed.

    I don't trust it when there's both an inhouse and network program. From the threads I've seen, it seems that these places only have 2 just in order to claim that all their sales came from "the other program." For inhouse sales, they say it was the network's sale. But then, they tell the network that it was the inhouse program's sale.

    I say, malarkey is what it is, and avoid those setups as much as possible.

  7. #7
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    Interesting points. I definitely appreciate them. Let me try to add some additional info and try to answer your concerns.

    Firstly, MichaelColey, although a business structure must meet a certain business ethic and standard, this type of online trading is highly speculative trading. Its not an investment and no "customer" of ours is under the impression of investing for the long haul. This is about excitment and an adreline rush in which they're 100% in control of their funds. Its like a race track...its a lot of fun. Now, continuing with this comparision, a race track may hire a marketing team to bring more people to a particular derby or season of racing. They'll get a commission of the winnings of the track and/or receive a commission according to new betters. We'll have both programs, but both are legitamate. How a business wants to share its revenue with its employees (affiliates in this case) is really up the business...I don't see any ethical issue with this. A certain better could "break" the track if he does bets big and wins...and we also allow for that possibility. We provide a trading service, plain and simple, and take the risk.

    Regarding setting up shop on multiple networks...I see many big companies like Citi and Ebay, Yahoo - these guys are everywhere. Is this less of a concern since they're on different networks in different continents or countries?

    Plus - why would the cookie be an issue if there was an inhouse and outsourced network....how would there be a potential for mixup. I'm not looking to cheat anybody - actually, I'm so on the side of the affiliates on this one...since my positionin the company is largely based on their performance and success.

    How do we avoid the parasite issue as well. Though I've only become aware of this issue recently, isn't the parasite problem something that the the affiliate him/herself has to make sure they're protected from, or is it the company's responsibility?

    These are central issues for me. I want to be clean as a whistle. We're very unique in this market...I know of only 1 or 2 companies who are comparible, and in my eyes they're a little behind the times.

    Thanks guys...

  8. #8
    AM Navigator Geno Prussakov's Avatar
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    Quote Originally Posted by MCO
    ...I'm not looking to cheat anybody - actually, I'm so on the side of the affiliates on this one...

    How do we avoid the parasite issue as well. Though I've only become aware of this issue recently, isn't the parasite problem something that the the affiliate him/herself has to make sure they're protected from...
    Yes and no. The "yes" part is about them being able to do that by communicating with each other disclosing the parasite-ridden cheaters, fighting for cleanliness of the networks they are on... while the "no" part is connected with the merchant's own internal attitude towards affiliates and affiliate marketing strategy (if you want) as such. Some would deliberately make it their secret/"internal" goal to "cut the costs" of the affiliate campaign(s). And because of merchant-parasite "alliances" happening more and more often lately (including those involving the "big dawgs" you might think of as "higher standards" of affiliate marketing), serious affiliates tend to be more and more cautious these days.

    How do you avoid the parasite issue altogether and from the very start? Go with a network that is known for parasite-fighting. Nothing is more important in this business than transparency.

    Geno

  9. #9
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    Ok. Obviously I'll control that issue.

    But which network(s) are known to be the good ones. I assume CJ, SaS and Linkshare are in the clear.

    Can anyone address the cookie mixup possibility?

    Thanks.

  10. #10
    AM Navigator Geno Prussakov's Avatar
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    Go with SaS. [period]

  11. #11
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    I hear you.

    My concern with SaS is that I'm bunched within 100 other businesses - and we cannot offer a commission that's so eye openning (15-18%) or $20-40 per referal), even though one customer of ours could very realistically bring in 3 or 4 figures for an affiliate (if the % option is chosen).

    I realize the stats might make more Affiliates take notice...and word of mouth like on this site. Ok, maybe I'll do that. But I'm still very inclined to inhouse the affiliate program as well taking into respect the issues of transparency. Can anyone show me a merchant who's done that in the past?

    Thanks.

  12. #12
    Moderator MichaelColey's Avatar
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    If you say you're going to control the parasite issue, then in the same post say that you assume CJ and LinkShare are clear of parasites, you're not going to gain much confidence from people here. CJ and LinkShare are jammed full of "compliant" parasites.

    It sounds like your intentions are good, but just about every direction you've talked about going with your affiliate program is a step in the wrong direction. It's still several months away, but you would really benefit from Andy's training seminar.
    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

  13. #13
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    Actually, from all the comments, I think I'm actually going to start at SaS...that seems to be the most trusted and its way up there on alexa. So, in the US and North America at least, I'll go with them at the beginning.

    Are there parasite issues with the big European Networks...or is that more foreign terroritory for this forum?

    Also...I haven't heard any giant concerns with both an inhouse and a outsourced network. If Shareasale and Post Affiliate Pro / Idev Solutions provide good tracking, I think it might be a smart business decision. Do I have an obligation to the network besides the contract we sign??? I'm sure a lot of merchants go to networks, and switch networks, or inhouse them, and try damn hard to keep the good relationships they've built with their affiliates over a period of months or years. The networks earn a lot of money for their services. I'm not sure if they "own the rights" to their affiliates as well.

  14. #14
    AM Navigator Geno Prussakov's Avatar
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    Yes. Go with SaS.

    Quote Originally Posted by MCO
    Do I have an obligation to the network besides the contract we sign? ...I'm not sure if they "own the rights" to their affiliates as well.
    Read the TOS. It should all be there.

    Geno

  15. #15
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    I just read ShareaSales' Terms for Merchants and it looks entirely reasonable.

    Aside…I think this thread is coming to an end...and I really appreciate your input.
    I needed to address some borderline issues which needed some clarifying…

    I just would like to know a quick Yes or No regarding issues which have been mentioned...

    1. Is transparency an issue if I put in place iDev Affiliate or Post Affiliate Pro Inhouse Aff. program with Shareasale as well? Is that a major turnoff which I should avoid?

    2. Are multiple networks an issue on different continents if I "IP" the registering affiliate and avoid potential collissons (whatever they may be)?

    Thanks again.

  16. #16
    MCO, I know this thread is a little old but I have a question.

    I don't know the entire details but do you work or have experience in the financial industry? And are you certain the venture you are supporting is legal?

  17. #17
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    Sure. We're one of the many trading companies which allow individuals to trade equities, currencies, commodities, options, futures - online. Our focus just happens to be one particular sector of the market, which is plenty big enough...

    Did you find the business model of interest?

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