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Puzzling Aff. Bids in PPC

What do they gain?

     
6:00 am on Jun 30, 2004 (gmt 0)

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When looking through certain keywords on Overture Bid view a lot of times I see the top sites paying a huge amount for there max. CPC. So I figure that what they are promoting must pay a huge amount or have a huge conversion rate to be able to afford that and still make profit.

But when I go to the site it doesn't make sense. Like this one is bidding over $9 per click and when I go to the site it is obvious that the link was an affiliate link by the url code. So I look to see what there affiliate program pays and they say they pay $5 per lead. Now even if that aff. got a 100% conversion rate (impossible) they would still be paying $4 more per visitor then they make back. Why would anyone do that?

It's just a mystery to me I guess. I don't get it. Unless they have some secret relationship with that merchant that pays them 4-5x the commision as other affiliates it makes no sense.

9:32 pm on June 30, 2004 (gmt 0)

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My best guesses would be that either the affiliate has a special relationship with the publisher OR the affiliate is shooting for a higher tier (based on volume) for higher commissions.
10:31 pm on June 30, 2004 (gmt 0)

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Like this one is bidding over $9 per click...

It is also worth remembering that a Max CPC of $9.00 doesn't necessarily mean they are actually paying $9.00 per click. There actual CPC could be much lower depending on the competitive landscape.

(Although it would certainly seem risky to count on this always being the case.)

AWA

11:28 pm on June 30, 2004 (gmt 0)

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"There actual CPC could be much lower depending on the competitive landscape."

This is overture not adwords (wrong forum I know) and all the bids below and above are in the same range. 9.10, 9.06,9.02, 9.00, 8.95 etc etc. So I think it's safe to assume they are paying that much or close to it quit I bit. From what I heard overture goes by the bid price only not the CTR or anything like adwords.

11:49 pm on June 30, 2004 (gmt 0)

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This is not one crazy person but 100 of wise people go after something, which you haven't fully understood.
11:55 pm on June 30, 2004 (gmt 0)

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Maybe the average user submits 5 leads and there is a relatively high conversion rate, or something like that?
11:57 pm on June 30, 2004 (gmt 0)

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There are some crazy people on overture. They may also have a good reason. It may not be an Aff. It might just be the site owner hiding behind an aff site so he can have the top 3 bids or so. I had to go organic because people in my industry were bidding $1.50 a click to sell a $10 item. I know for a fact that they could not be getting more than 3% conversion rate. They do it because they want exposure and they konw that a certain perctage of people will return and buy more. I just do affilate so I don't get paid for repeat business just first time sells.
12:17 am on July 1, 2004 (gmt 0)

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some programs also pay for every repeat transaction..as in affiliate id stored in a cookie.

if not then think toolbar, email-collecting,homepage hijacking,spyware etc etc

12:22 am on July 1, 2004 (gmt 0)

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Maybe they are doing something like this:

[google.com ]

4:25 am on July 1, 2004 (gmt 0)

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This is not one crazy person but 100 of wise people go after something, which you haven't fully understood.

No I don't understand going after something that brings a negative ROI. How is that rational? Unless people just enjoy burning up money for the fun of it.

Maybe the average user submits 5 leads and there is a relatively high conversion rate, or something like that?

These particular sites have only one type of lead and app. and they don't pay for duplicates.

It may not be an Aff. It might just be the site owner hiding behind an aff site so he can have the top 3 bids or so.

The top bids were all diferent sites. I don't see why they would have to have fake aff. sites for that, just have multiple PPC accounts under different names and CC's.

Even still from what I have heard this niche gets usually about 5-15% conversions. And of the site owner is paying out $5 for each lead generated by affiliates, but also bid $9 per click to drive there own traffic to the site that would mean it would cost them about $90 per lead instead instead of only $5 to have affiliates give them leads and pay the high prices for PPC for them. In this market I doubt they even make $90 per person they get who qualifies.

some programs also pay for every repeat transaction..as in affiliate id stored in a cookie.

Leads don't pay more then the first fresh new lead. If they already have that person in there database they don't pay again. Plus there is no need for these people to apply more then once. They are either accepted or denied.

I still don't understand it. But it's got to be something. Something not so obvious I guess that makes it worth it for them.

 

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