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  1. #1
    Verbosely Virtuous Mutt spacedog's Avatar
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    Some thoughts on web hosting merchants and PPC
    Firstly, my apologies if my problems with web hosting affiliation are starting to sound like a broken record. I've made some headway into the causes of high reversals in the web hosting promotion category. I've been promoting BlueHost for a while, and I'm up near 45% reversals over several months. The AM over at BlueHost is a really nice guy, as are all the techs I've dealt with, and we've spoken via phone numerous times. He runs the numbers for me each time we speak, including tonight (he even had his daughter there helping him with CJ finalized transactions for May since it's close to the 10th), and I trust that he's probably not trying to stiff me after so much back-and-forth on the problem. I really like BlueHost a lot because they seem to care about customers and affiliates.

    Overall, he says they get about a 15% reversal rate among a very large set of affiliate-based sales, and he said that number has been steady over the past year. His numbers indicate that affiliates with larger volumes of sales often have larger reversal %s. The little mom-and-pops (well, people who don't devote a lot of resources to promotion of BlueHost) who maybe have one or two sales per month maximum, may be promoting via banner ads rather than search engine PPC. I do exclusively PPC and have a fair volume of sales, so I guess I'm a "middle" performer for BlueHost. The majority of reversals are "Invalid Credit Card" on CJ, meaning that it was most likely a case of fraud. Only about 12% of my commissions get reversed for the only other reason I see, which is Returned Merchandise, and I could live with that rate. People misunderstand what they're getting and not getting with the hosting packages, perhaps.

    Anyway, fraud reverses some 30-40% of my total commissions with BlueHost using PPC. Web hosting is a traditional target for fraudsters trying to set up bases of attack (phishing schemes, hacking, scams and the like), so maybe PPC itself is part of the problem. The smart fraudster probably isn't browsing websites with hosting reviews and mom-and-pop sites with tons of banner ads, they're probably going straight to search results where they see laid out for them how much the service costs and what scripting and functionality (PHP, perl, MySQL, etc) is available to them at a glance for their pathetic scheming. Go with a low cost hosting site, perhaps they figure, and maybe they won't get shut down right away as the legitimate credit card holder whose number has been stolen won't see a big transaction and call the bank on it right away (or vice versa, bank calling the victim).

    So that begs the question: is there something affiliates could put IN the Google AdWords ad itself, or not put in, that might discourage these fraudsters? I had been touting the PHP, free domain, MySQL, and eCommerce features in my ads up to this point. Maybe I should make the ads more appealing to less-savvy people and avoid the feature list.

    And what preventive wording, if any, might look OK on a search ad or a landing page that wouldn't drive potential sales away; e.g. "Fraud detection built in" for the AdWords ad, or for a landing page: "Don't even THINK about signing up for this service if you are using a fraudulent credit card. Our system will detect you immediately, notify the FBI, and send packs of rabid pit bulls to your residence within 12 hours." I wonder if any wording at all might be helpful, of if I'm just grasping at straws here.

    Just thinking aloud and hoping to shed a bit of light on the problem. A lot of the threads I've been reading here assume that the hosting merchants are just shysters and not giving affiliates what we are due, but I'm thinking that this may not be as prevalent as commonly thought. Anyway, take everything here as just my own comments and not as authoritative fact. I'm just not ready to give up on this sector yet since I do make some profit on it, and maybe fleshing this whole thing out will help some.

  2. #2
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    If I were you, I would just build a nice Yahoo Small Business landing page and promote Yahoo only.

    Yahoo is more expensive than those cheaper hosting companies, which may possibly deter fraudsters. And perhaps the Yahoo name, versus some "no-name" web host may deter fraud. And plus, isn't Yahoo pretty tight on fraud?

    At the same time, you may get more sales because because of Yahoo's branding, and less reversals.

    I honestly think you shold try them out. Out of all the hosts, they have sold the best for me, and rarely reversed.

    I think out of about 70 transactions in the past few months I have only had one or two reverse.

    Oh, and I strictly use PPC.
    Last edited by melty; June 8th, 2006 at 09:14 PM. Reason: Adding more info

  3. #3
    Verbosely Virtuous Mutt spacedog's Avatar
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    melty, (I keep wanting to call you "uncle melty")

    Some very good insights there. That's an insanely low reversal rate for a hosting company! I really need to get over my aversion to creating landing pages. And to go with profitable partnerships, rather than just warm, fuzzy feelings. Thanks a lot for the info, melty.

    Oh, I got an email back really quickly from Y! Small Business. They were happy to allow me to use their trademark in the ad text, but not in my display URL. And they don't have any "starter" full-page landing content, just what's in the links on CJ. Ah well, let's see if I can get creative in a hurry.

  4. #4
    ABW Ambassador La_Valette's Avatar
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    On a slightly different note, I never had any success with ppc promoting web hosting. Maybe I'm too stingy. Anyone care to disclose what approximate range of cost per keyword they're paying for web hosting related keywords on the major engines?
    Kids, you tried your best and you failed miserably. The lesson is, never try. -- Homer Simpson

  5. #5
    Verbosely Virtuous Mutt spacedog's Avatar
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    La Valette,

    You're not going to want to hear this, but I've found that to get any volume at all of clicks on Google PPC, your keywords are going to have to be some $2-$6 each. Mostly in the $3 range. Even at $3, I usually only got a one-digit number of clicks per day. But pretty good conversion rate. Hardly any real volume, though. I'd guess at $6 you'd get a lot more clicks, but who the heck makes money on $6 clicks?

    As with everything else, you might get some nice lower cost ($1-$2 range) fairly OK converting keywords if you think hard about it and get creative with word combos, but again the volume of clicks will be low. It's a *really tough* sector to get into. If you can avoid huge reversals though, profit can be made because of the high per-sale payouts. I don't know whether to advise you to try, or suggest you stay out of it for your sanity's sake. If you're brave and have some disposable advertising cash, you might give it a try. Just keep in mind you could lose up to 50% of your commissions to reversals, and you might have to wait weeks before knowing any given commission was reversed.

    I have a few web hosting keywords on Overture/Yahoo Sponsored Search at less than $1 for kicks, but for some reason they seem much lower converting than Google PPC. Even when they were set more in line with my Google prices. Not sure why this is.

  6. #6
    ABW Ambassador La_Valette's Avatar
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    My goodness. Not my game. I'm way too miserly to pay those kinds of prices. Thanks for the information anyways.
    Kids, you tried your best and you failed miserably. The lesson is, never try. -- Homer Simpson

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