CPA EXPLOSION
CPA EXPLOSION – It’s Not Click Fraud, But…… One of the most widely quoted reasons for many large global corporations who advertise online starting to turn away from PPC advertising is that click fraud is now allegedly costing them something like 20% of their total advertising budgets!
In other words, one out of every five clicks on ads placed using PPC advertising methods is a fraudulent or false click.
For any business, no matter what size, this would represent a significant hole in their advertising budget, and as a consequence, many of these organizations are turning to CPA advertising as it is claimed that it is not possible to ‘cheat’ such programs.
Unfortunately, however, this is only half true.
Of course, as there is nothing to be financially gained from merely clicking on an advert, then click fraud as it is currently understood will simply not work in association with CPA advertising.
Nevertheless, it is also widely acknowledged in online business circles that there are many ways that people can ‘cheat’ using the CPA advertising business model.
It should also be noted, however, that this works both ways, a fact to which many experienced and knowledgeable CPA program affiliates would be more than willing to attest.
It is obvious that when any company chooses to use the CPA advertising program for sales of their products or services, then it is going to be almost impossible for less scrupulous affiliates to cheat the system.
Any customers sent to the advertising web site by the affiliate will either buy or not, and if they do not buy, then the advertiser will obviously not pay the affiliate the commission.
The picture becomes considerably less clear, however, when you are looking at CPA advertisers who are paying for leads generated. In this situation, the advertiser is looking for good quality targeted potential customers who they are able to add to their mailing list, so that they can continually mail out special offers, newsletters, and so on.
In this way, they will put their company and sales messages in front of the potential customer on a regular basis, which will significantly increase their chances of generating sales at a later date when the customer is in the market for their type of product or service.
This desire to only attract high-quality targeted potential customers to their mailing list is the reason that they can be very selective about the websites that they are willing to advertise on.
It does, however, also mean that anybody who signs up for their mailing list who is knowingly disinterested in the products or services that they offer or is not in a position to take advantage of them is a complete waste of money as far as the advertiser is concerned.
So, signing up for an advertiser’s mailing list in these circumstances could be constituted as cheating the advertiser.
Is this currently happening?
The unfortunate answer to this question is a categorical ‘yes’, and this is important to you as a potential publisher or affiliate for two reasons.
Firstly, the more that advertisers feel that they have been cheated, the less they will be willing to pay out for the leads that they are gathering through their site.
Secondly, the more such cheating becomes evident, the less flexible and accommodating the advertisers will become, and, as they are forced to spend more and more money on anti-cheating measures, payouts will once again suffer.
It is, for example, extremely likely that the bigger corporations and organizations (like CitiFinancial, for example) will become less and less willing to entertain the idea of working with anything but the most prominent publishers and affiliates, those who have long established track records.
However, cheating does exist.
For example, it is not uncommon for less honest or scrupulous affiliates to pay people to sign up with higher paying CPA programs, purely to generate the commission.
If, for example, a CPA advertiser is paying the affiliate $15 per lead, it clearly makes financial sense for the affiliate to pay hard-Up friends or relatives $5 to sign up with that particular program.
In this case, both the affiliate and their friend does very nicely from the arrangement, and the only loser is the CPA advertiser who has just paid $15 for what is effectively a totally worthless lead.
On the other side of the fence, however, many more experienced and knowledgeable affiliates are convinced that the CPA advertisers themselves counter this to a certain extent by indulging in their own form of cheating.
This is possible because to a large extent, an affiliate is relying upon the honesty of the CPA advertiser to report how many leads they actually receive from the promotional efforts of that individual.
And, in most cases, there is no way of independently checking the numbers that any CPA advertiser produces. So, it is widely suspected that many advertisers only report 80% of the leads that they actually receive to their affiliates, meaning that those affiliates remain permanently unpaid for 20% of the work that they have done.
As highlighted above, this element of ‘cheating and contra-cheating’ within the CPA advertising industry is something that will ultimately directly affect you if you choose to use advertising of this type on your website or blog.
In this scenario, it is inevitable that advertisers will have to bear increased costs, and these costs will gradually filter down to affiliates in the form of either lower payouts or stricter payment criteria being enforced.
It is not, therefore, in your best interests to be tempted into trying to cheat the system yourself. Whilst this may make money for you in the very short term, over the longer term it will significantly reduce the earnings potential of any advertising that you carry, and this will inevitably threaten the long-term survival of your business.
Attempting to cheat the CPA advertising system represents a classic case of ‘short term gain but long-term pain!’
Regards, Coyalita
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