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Referrals 2.0 - Can it result in the loss of your ppc advertisers?

Coincidence? Or did the advertiser end the campaign to avoid high payouts?

     
11:32 am on Jul 8, 2007 (gmt 0)

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Consider this scenario:

An advertiser that has in times past enjoyed quality ppc traffic and good conversions from my site, discovers that I have targeted them as a referral. Said advertiser decides that have no need to pay out massive $$ to me via referrals, so they block my domain by using their filter.

If my domain is now blocked how would this impact on ppc ads for this advertiser on my site from now on? In other words do advertisers have separate filters for ppc and referrals?

Thanks.

3:18 pm on July 8, 2007 (gmt 0)

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I don't understand,
tell me again why if that advertiser is enjoying good traffic from ppc, and extra conversion via ppa, their target is being met, so why would they block you?
10:39 pm on July 8, 2007 (gmt 0)

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Hobbs,
My theory is this:
On the assumption that the conversion rates are the same for ppc and ppa. If the advertiser can pay (eg) 25cents each for x amount of conversions which they have consistently enjoyed for two years they will not want to pay $40 per conversion/sale now that I have replaced ppc with ppa.
2:26 am on July 9, 2007 (gmt 0)

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Said advertiser decides that have no need to pay out massive $$ to me via referrals, so they block my domain by using their filter.

I understand your theory, but I think you'd have to know the thought process of the advertiser to be sure. You mentioned "quality ppc traffic", which means the advertiser already knows your site is a high converter. If that's the case, why would the advertiser even test the PPA network to begin with? Especially if they're already getting high conversions via PPC.

If the advertiser can pay (eg) 25cents each for x amount of conversions which they have consistently enjoyed for two years they will not want to pay $40 per conversion/sale now that I have replaced ppc with ppa.

If your site is converting extremely well for an advertiser, they'd be silly to block you if you switch to PPA. Yes, they may be losing more money via PPA, but they're still getting conversions.

6:11 am on July 9, 2007 (gmt 0)

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Celgins,
If that's the case, why would the advertiser even test the PPA network to begin with? Especially if they're already getting high conversions via PPC.

The advertiser is receiving traffic from my site, however the volume of traffic that my site delivers may fall well short of what they require. Within my niche my (product)site is unique, however there are sqillions of mfas's cashing also within that same niche. It may well be that the advertiser is trying to attract more sources of quality conversions via ppa.

If your site is converting extremely well for an advertiser, they'd be silly to block you if you switch to PPA. Yes, they may be losing more money via PPA, but they're still getting conversions.

If the advertiser already knows that they will receive those conversions from me via ppc why would they want to pay me ppa rates?

6:26 am on July 9, 2007 (gmt 0)

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Take this hyperthetical scenario:

200 clicks per day delivered to widget advertiser
15% conversion rate

ppc 200x.30c = $60 per day payout by advertiser
ppa 30X$35 $1050 per day payout by advertiser

which one would they choose?

8:02 am on July 9, 2007 (gmt 0)

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From what you describe, I would choose PPC if I was the advertiser and your switching to PPA would still not get you blocked because I did not list myself in the PPA program by mistake.
9:21 am on July 9, 2007 (gmt 0)

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There is another possiblity, or a few...
Assume your PPC conversation is not bad, but not great. An advertiser will also see a range of prices for it's clicks, so their cost will shift around a bit.

Let's say it is a line ball call so both PPA and PPC are the same. So, the advertiser decides to remove from its PPC for your site.

As an aside: This is human psychology too - "why would I pay and risk my money (PPC) when I can get similar sales for no risk (PPA)". If an advertiser sees a cost of PPC at 80% of PPA (ie PPC is slightly cheaper) for the same income, they will still take PPA. It doesn't seem to make sense, but people will pay for a reduction in risk. Plus there are the sneaky benefits that all affiliate programs know: leakage. Customers returning when the affilate payment doesn't count, plus the advertiser gets risk-free branding. These have a premium: higher leakage = more willing to switch to PPA.

OK, back to the point assuming both PPA and PPC are the same cost for the advertiser. Remember that Google PPC is a bidding system. The more advertisers that switch over to PPA on your site, the less that advertisers remaning on PPC will have to pay. So you will see a lot of downward pressure.

11:28 pm on July 9, 2007 (gmt 0)

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This is human psychology too - "why would I pay and risk my money (PPC) when I can get similar sales for no risk (PPA)". If an advertiser sees a cost of PPC at 80% of PPA (ie PPC is slightly cheaper) for the same income, they will still take PPA. It doesn't seem to make sense, but people will pay for a reduction in risk.

The crux of this issue is there is a MASSIVE gap between the payouts of ppc and ppa (see example three posts above) Assuming that clicks and resulting conversion will be a known constant to the advertiser because the new ppa ad appearing on my site is formatted, written and placed in EXACTLY the same way as old the ppc ad was for two years; then I would have to say that the advertiser would be nuts to volunteer to pay me more per conversion when the outcome of the total ppc payout would be a fraction of the cost.

1:41 am on July 10, 2007 (gmt 0)

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Do you have exact numbers? The answer is that this same advertiser will never ever launch a PPA ad-campaign which will cost him that much! - compared to his PPC campaign.

ppc 200x.30c = $60 per day payout by advertiser
ppa 30X$35 $1050 per day payout by advertiser

That's something impossible unless the publisher is cheating or the advertiser is a plain fool.

2:44 am on July 10, 2007 (gmt 0)

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Do you have exact numbers?

The advertiser ppa payout is actually higher and the conversion rate is the only figure that is unkown to me. All other figures are correct.

The following figure (quoted by me in a previous post)is a comparision showing what the advertiser would pay based on my CURRENT STATS if they accepted my traffic via ppa, and is the figure they are likley to pay if I was to remain unblocked. It is not what the advertiser is paying me now:


ppa 30X$35 $1050 per day payout by advertiser

I do not know the conversion rate but I have good reason to suspect it is very good.

[edited by: Scurramunga at 3:18 am (utc) on July 10, 2007]

2:49 am on July 10, 2007 (gmt 0)

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The answer is that this same advertiser will never ever launch a PPA ad-campaign which will cost him that much!

I disagree. The advertiser would launch the campaign if it was looking to tap in into new sources of conversions. However your comment only strenghtens my arguement as the advertiser did not expect a regular and relatively cheap ppc converter to target them via ppa! I can't see how that is so hard for anyone to understand.

[edited by: Scurramunga at 3:19 am (utc) on July 10, 2007]

4:07 am on July 10, 2007 (gmt 0)

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If the advertiser was doing too well on the PPA as opposed to the CPC wouldn't they just lower their payout offer?
4:32 am on July 10, 2007 (gmt 0)

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If the advertiser was doing too well on the PPA as opposed to the CPC wouldn't they just lower their payout offer?

I didn't at any time state that the advertiser was doing well under ppa. What I have asserted is that the advertiser was doing well using ppc to display ads on my website. That same advertiser is now experimenting with ppa. The ppa offer is as I described above, and obviously I cannot speak on behalf of the advertiser.

6:16 am on July 10, 2007 (gmt 0)

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The other problems with the numbers you show is you assume the 15% conversion rate. With a payout of $35 per lead. That's where the confusion lies, these numbers are just too far out of whack from most affiliate experiences.

Talk to anyone on the affilate boards and see if they know of programs that has the 15% conversion rate, while maintaining a $35 payout. The only way I can see this is in an high niche market where the CTR for the ad is very very low. These are few and far between and often in very crowded markets.

Eg, you may have to display over 100,000 ads and get 30-50 clicks and 4-6 sales.

6:59 am on July 10, 2007 (gmt 0)

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Talk to anyone on the affilate boards and see if they know of programs that has the 15% conversion rate, while maintaining a $35 payout.

As I said before the 15% was an arbitrary figure that I used for the sake of the example. I do know with certainty however, that the resulting ctr of these ads (as PPC ads) on my site is far in excess of the example which you have quoted "...100,000 ads and get 30-50 clicks..."

Even if my 200 clicks a day resulted in just three conversions 200:3 which is a rate of 1.5% in conversions the advertiser has already blown his former PPC budget, just to get there on PPA. In this case it would make more sense for that advertiser to block me.

6:52 am on July 11, 2007 (gmt 0)

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I guess we have gone off track. All I was trying to establish was if advertisers have separate filters for ppc publishers and referral publishers.

[edited by: Scurramunga at 6:53 am (utc) on July 11, 2007]

2:36 am on July 12, 2007 (gmt 0)

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To put it in a nutshell, if the advertiser is benefiting from both of his campaigns, he won't block you. Because it doesn't matter if it was you or someone else who made the conversion for him. If he makes a profit because of you, he'd only be grateful.

If he tracks you/your site, I'd even think that he'd specifically target your site and increase the PPC payout to make his ads shown more frequently at your site.

Good point, wrong figures. That's what I'm trying to tell.

[edited by: Alioc at 2:38 am (utc) on July 12, 2007]

 

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