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  1. #1
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    Would this affiliate program work?
    Hello,
    We are ready to launch a new social networking site. We are in the process of building our affiliate program. Many sites pay per sign up. $1, $1.25 some even $2.

    What do you think is the good dollar amount to start with? As a publisher how much do you expect to get paid per sign up? It's a free sign up.

    Anyways here is my idea that i came up with today. What if I had an affiliate program that pays you lets say these rates:

    $0.10 per sign up - once user signs up you get commission for 45 days for the following activities:
    $0.10 per photo upload/every hour
    $0.10 per video upload/every hour
    $0.10 per blog post/every hour
    $0.10 new forum topic/every hour

    This way you can make a lot of money from a user that is active on the site. You earn that every hour for 45 days.

    Would publishers like this idea? yes no, why?

  2. #2
    Life is Supposed to be Fun! Rexanne's Avatar
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    Those who understand the vertical should speak up - I really don't have a clue but sounds interesting
    Peace,

    Rexanne

    Rexanne.com
    Loving Everyone's Child Creates Magic


  3. #3
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    Quote Originally Posted by Rexanne
    Those who understand the vertical should speak up - I really don't have a clue but sounds interesting
    Basically you get paid for every activity the person you referred to does for 45 days. Anytime they upload a photo, video, create blog, forum you get paid.

  4. #4
    ABW Ambassador
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    why per hour 0.10 cap?

  5. #5
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    Quote Originally Posted by redtagdeals
    why per hour 0.10 cap?
    Well that was just an idea. Not sure if i would do it like that or not.
    Anyone else? Any input on this would be appriciated!

  6. #6
    Kung Fu Master Eathan's Avatar
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    Before you go down the path of designing an affiliate program and commission structure, you really need to get a clear picture of what the value of an active user is to you. With social networking this can be a huge challenge.

    A friend and I ran a small social networking site (still do, but it's been shelved as an active project). It was getting 1-1.5 million page views a month, but monetizing those page views in any significant way was extremely difficult. The users were there to socialize, make friends, be dorky teenagers, etc, they were not there to click, buy, do anything naturally valuable. The site made some money, and could've made more had we reworked it quite a bit, but it would not have made enough to justify a structure like the above, unless the program was short-lived and used strictly to "get the ball rolling" and build momentum towards word of mouth growth for the future.

    Good luck!
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  7. #7
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    Quote Originally Posted by Eathan
    Before you go down the path of designing an affiliate program and commission structure, you really need to get a clear picture of what the value of an active user is to you. With social networking this can be a huge challenge.

    A friend and I ran a small social networking site (still do, but it's been shelved as an active project). It was getting 1-1.5 million page views a month, but monetizing those page views in any significant way was extremely difficult. The users were there to socialize, make friends, be dorky teenagers, etc, they were not there to click, buy, do anything naturally valuable. The site made some money, and could've made more had we reworked it quite a bit, but it would not have made enough to justify a structure like the above, unless the program was short-lived and used strictly to "get the ball rolling" and build momentum towards word of mouth growth for the future.

    Good luck!
    Thanks for your input. Main focus is to get things going. We rather have active users then someone that just signs up and does not come back to the site.

  8. #8
    Merchant & ABW Ambassador
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    You should have a good fraud detection sys in place to weed out those bots.

    If you are comparing $1-2 to $0.10, would a publisher be interested in that? Most likely Not. Even if you get a lot of news airtime, it might help the publishers but most people (especially kids) would do a direct URL type in as opposed to going through a publisher's site.

    If I am a publisher of your program, and comparing your program to other sites. Here are my criterias.

    1) You better have a value proposition site. If you are going against YouTube or MySpace, what can you do better than them to help ME sell your site? What value can you offer to your users so that I can help you sell? Do you have 30 million users more than myspace? Or is your technology lightyears ahead of them? I am not trying to knock you but these things will matter.

    2) If competitors are providing me $2 per sign up, no questions asked. Can you match that or exceed that?

    2-a) NO? Then can you make it up on the back end and EXCEED what they are providing? If they are giving me $2 and you are giving me $1, I want to have the opportunity to make $4-5 with that legitimate sign-up through either activity bonus, etc.

    2-b) The $0.10 cap or structure is not attractive enough for me. I would not have the opportunity to make the $4-5 that I am hoping to make. Make it more appealing.

    Alll the best.

  9. #9
    Member AdJumpCM's Avatar
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    Quote Originally Posted by Eric Ewe
    You should have a good fraud detection sys in place to weed out those bots.

    If you are comparing $1-2 to $0.10, would a publisher be interested in that? Most likely Not. Even if you get a lot of news airtime, it might help the publishers but most people (especially kids) would do a direct URL type in as opposed to going through a publisher's site.

    If I am a publisher of your program, and comparing your program to other sites. Here are my criterias.

    1) You better have a value proposition site. If you are going against YouTube or MySpace, what can you do better than them to help ME sell your site? What value can you offer to your users so that I can help you sell? Do you have 30 million users more than myspace? Or is your technology lightyears ahead of them? I am not trying to knock you but these things will matter.

    2) If competitors are providing me $2 per sign up, no questions asked. Can you match that or exceed that?

    2-a) NO? Then can you make it up on the back end and EXCEED what they are providing? If they are giving me $2 and you are giving me $1, I want to have the opportunity to make $4-5 with that legitimate sign-up through either activity bonus, etc.

    2-b) The $0.10 cap or structure is not attractive enough for me. I would not have the opportunity to make the $4-5 that I am hoping to make. Make it more appealing.

    Alll the best.
    Perhaps I've misread either the OP or your post wrong, but what you're saying doesn't seem to tie in to what the OP has proposed. Basically, he the OP is going to pay $0.10 for every action the new user does for 45 days. Some people, such as myself, would be able to deliver 1,000 new users in three days or less. The $1/signup doesn't matter to me because I know that if a user really likes the site they'll upload as many photos as they can and make as many posts as they can. I can almost guarantee that I'd be making $4.00 or more from each and every user I signed up to the site.

    The only reason why I WOULND'T do so is because I'm not entirely confident in the websites financial backing to actually pay me the $4,000 I'd be owed seeing as how it's very unlikely that the users would be contributing to the site financially.

  10. #10
    Moderator MichaelColey's Avatar
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    I really don't think social networks can be effectively promoted through affiliate programs. Regardless of the affiliate program, a social network will succeed or fail based entirely on its viral effectiveness. An affiliate program may prime the pump a bit, but if you don't get viral growth it will never succeed.
    Michael Coley
    Amazing-Bargains.com
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    "Education is the most powerful weapon which you can use to change the world." Nelson Mandela

  11. #11
    ABW Founder Haiko de Poel, Jr.'s Avatar
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    Quote Originally Posted by MichaelColey
    I really don't think social networks can be effectively promoted through affiliate programs. Regardless of the affiliate program, a social network will succeed or fail based entirely on its viral effectiveness. An affiliate program may prime the pump a bit, but if you don't get viral growth it will never succeed.
    Completely agree 2,000%
    Continued Success,

    Haiko
    The secret of success is constancy of purpose ~ Disraeli

  12. #12
    Kung Fu Master Eathan's Avatar
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    Quote Originally Posted by MichaelColey
    An affiliate program may prime the pump a bit, but if you don't get viral growth it will never succeed.
    That's sort of what I was getting at. A social networking affiliate program is unlikely to pay for itself in revenue, but could be used as part of the launch strategy to "prime the pump" as Michael says. The down side there of course is the program has an end date built in which could undermine affiliate confidence. Still, if you ran things above board, paid out what you said you'd pay out, etc, you'd likely get some traction.
    Eathan Mertz

    Black Cat Mining - Gold Prospecting & Rockhounding Equipment

  13. #13
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    Hey guys!
    Thanks for the input. I think i'm just going to go with basic referral. I don't know if i can afford $1 per sign up yet but I've tried $.50 per sign up before for a image hosting site and got alot of publishers to sign up so maybe i'll have the same luck this time too.

  14. #14
    Outsourced Program Manager John Jupp's Avatar
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    Quote Originally Posted by MichaelColey
    I really don't think social networks can be effectively promoted through affiliate programs. Regardless of the affiliate program, a social network will succeed or fail based entirely on its viral effectiveness. An affiliate program may prime the pump a bit, but if you don't get viral growth it will never succeed.
    Well I am going to disagree with both you Michael and Haiko.

    I KNOW that a Social Networking website can make serious money, providing it is tied into some form of revenue stream. How do I know? Well I'm getting a revenue share for providing the technical support to such a site.

    However it will cost the backers a considerable amount of money if they are paying per action. I would look again at the business plan there again guys and see how best to monetise all those free sign ups. There are ways without going the usual route.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

  15. #15
    Moderator MichaelColey's Avatar
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    There's a huge difference between a Social Networking site and a Social Shopping site. Are you sure you're not talking about something that's more oriented towards shopping?
    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

  16. #16
    Outsourced Program Manager John Jupp's Avatar
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    Nope. A pure social networking site. The key is that the more functionality a user requires they need to upgrade their membership from free to subscribed. This is because it incorporates social, commercial intercourse and dialogue and is designed for creating a community online.

    It is designed to attract members drawn from the professions and perhaps the arts too.

    Now perhaps I jumped the gun just a teeny weeny bit by declaring it a concept which makes money......it launches soon. However it'll put facebook into the stone age.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

  17. #17
    Member TonyCafaro's Avatar
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    I believe a social networking site could be monetized 100% with the right marketing and value add campaigns. But the model for the hourly scheme just doesn't seem like it would work because if you took an affiliate approach and drove revenue per action to merchants or advertiser sites wouldn't you be defeating yourself by keeping them active on your site? Maybe I'm missing something.

  18. #18
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    Do you think $0.35 per sign up would work? Would publishers promote something for $0.35 per sign up?

  19. #19
    Outsourced Program Manager John Jupp's Avatar
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    As has already been hinted in this thread, there are affiliates who can drive thousands of signups. It all adds up. Just calculate the depth of your pockets. You are offering on free sign ups? Most go the subscribed sign up route. So if an affiliate sends you ten thousand sign ups in a week (very possible) you are just down $3,500 and counting.

    Look at your business plan. It's not what you offer an affiliate. If the program is viable an affiliate will promote it if they can see a return on their traffic. What YOU need to determine is if the business case is sound and you can spend what could easily be $50,000 in commissions in a month even at 35c a sign up. Having got the free sign ups how will you get them to switch to a monetised format?

    If you have not thought this through you will be heavily out of pocket.
    Flambi Media Limited - USA/UK/EU Affiliate Management Expertise

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