CPA Networks and Retail in the “Perfect Storm”

For years now CPA networks have had their niche in performance marketing. With programs such as lead programs, continuity programs and free give-away offers, CPAs have been making millions of dollars and have been leading the way for companies with this offer demographic. But, what about performance for online retail companies?

The majority of the Internet Retail Top 500 run affiliate programs in the large affiliate networks such as CJ, Google, and LinkShare where the specialty of the publishers are focused on online shoppers, who very often do their homework before purchasing products. These retailers also typically run on a rev share model as their price points often vary, sometimes as much as several hundred dollars.

CPAs have typically steered away from hard product sales and rev share programs. Their affiliates are specialized in the quick action (a lead, account sign up or giveaway) and direct response oriented offers where the potential consumer or lead target have limited options and the offer is as focused as possible. They also prefer to run on flat payouts where they know exactly how much the end payout is making it easier to arbitrage any expense they might incur to gain traffic for the offer.

So does this mean that CPAs and Online Retailers are not a match? Well, ultimately if a retailer is looking for the “Hockey Stick” growth curve then the answer might be, “Yes”. However, there is that “Perfect Storm” scenario that we really like to take advantage of. Seasonal events and Holidays can often create this nexus between Retailers and CPA networks. Whether it’d be flowers on Valentine’s Day or Mother’s Day or Halloween costumes for Halloween.

We did a case study at AffiliateTraction ™ with our client SpiritHalloween showing that for short term seasonal spikes CPA networks are a great way to get a surge in sales from publishers that you just don’t have access to in large affiliate networks (CPA Networks Drive Sales During the Holidays).  An additional 7% of SpiritHalloween’s seasonal revenue in 2009 came from CPA network activity compared to the year before with only one affiliate network.  That’s what I call true incremental traffic.

Though they may not become the majority of an online retailers business, CPA networks should not be ignored when developing your online marketing campaign. They have access to channels and potential revenue that you can’t find in larger “open” affiliate networks and under the right circumstances can really increase your sales.

Especially with Spring Break and Easter coming up, make sure you take advantage of the effectiveness of CPA networks, and it’s never too early to start planning larger campaigns for Christmas 2011.

Co-Author: Seth Bernabei
Seth is the director of business development at AffiliateTraction.com located in Santa Cruz, CA.