Why You SHOULDN’T Go Direct
When basically any super affiliate goes around flexing their knowledge muscles for everyone to see (including me), they always recommend going direct with the advertiser if possible.
What does going direct mean?
For all you nubs, going direct means bypassing the affiliate network (like Copeac or CPA Empire) and working directly with the advertiser. Instead of having an affiliate link like http://nbjmp.com/afid=1231&ID=2838, you’d just have a link that goes direct to the advertiser. Why do affiliates do this?
a) To bypass all the b/s that comes with working with an affiliate network. Negotiating payouts, getting creatives, getting a whitelabel, etc.
b) To get the highest payout. Instead of the affiliate network getting the direct $30 payout and you getting $25, you get the $30.
c) To avoid affiliate network shaving.
This all sounds great, right? This article is about why you SHOULDN’T go direct. Because with all the good things that come from doing direct, there are cons to think about.
a) You’re subject to the advertisers payment terms. While an affiliate network may give you weekly wires and front the money, going direct you’re looking at NET30 at least, sometimes NET60. This wouldn’t be that big of a problem if…
b) Advertisers can not pay you. If the network is stingy about lead quality, they can simply not pay out from whatever periods weren’t “sufficient” for them. If an affiliate network gets charged back, they still want you as a publisher. So they’ll eat up the lost leads and still pay you out on them and just take a loss. If you’re running on NET60 payment terms, you can run an offer for 2 months and spend $60,000 and have them charge it all back. It happens I’ve seen it before.
c) You’re no longer under the radar. Some of you may not care, but a lot of you will care a lot. If you’re using greyhat techniques, or even blackhat, the last thing you want to happen is have the advertiser pick up on what you’re doing. If you’re running an offer through an affiliate network, let’s say the network does 20,000 leads/day on that offer. If you do 500 greyhat leads/day that are on the lower-end of quality, it’ll blend with the other 19,500 leads and overall the advertiser probably won’t complain about the quality. If you go direct, you’re singled out and subject to termination.
d) Hurts your relationship with affiliate networks. If you’re doing enough volume to go direct, the affiliate network will definitely take a hit in your leave. Network relationships can overall be very profitable sometimes, even more profitable than going direct for an extra $2/lead.
Well, there you have it. It took me like 3 hours to write this post because I kept getting interrupted by IMs, so sorry if it didn’t come out that well. I just wanted to provide an angle on the other side of the fence, opposite of most people who chant “Go direct! Go direct!” like it’s their job. Because I’ve chosen to stick with affiliate networks many times, just because of relationships and payment terms. Hope this article helped you.
All very true. I’ve considered going direct but much prefer having the middleman handle all the negotiations for me. It’s a price worth paying, especially considering how hard my AMs work!
And does all the merchants let you go direct? I mean do they have affiliate system without going through network?
I’ve always thought, that by “direct” they mean sending ppc-traffic directly to cpa-network, instead of your own landing page.
That would be “direct linking” which is a whole different ballgame. A very expensive one at that too.
Plus the time it takes to negotiate all that stuff could probably be spent just making up new campaigns or optimizing present ones.
Paul, you AM from CXDigital mentioned –
Do you see yourself moving in that direction?
that would be “direct linking” meaning sending traffic straight to the merchant.
To play devils advocate, it can sometimes be a hell of a lot more than a few bucks a lead when you go direct and cut out the affiliate network. Chad for example has mentioned that he has increased his revenue by 50% on average after moving to a direct deal.
thanks for another very informational post. Your blog is one of the few internet marketing related one’s I read that actually has worthwhile content/info.
Thanks,
Nick
yeah, thats why they are for, I don’t mind sharing the revenue if they are doing most of the back end work for me.
To me Net60 = no deal. It’s as simple as that.
Standard trade terms are Net30 and if you’re strapped for capital then I’d implement 10days/2% (where you give them a discount to pay in 10 days). This is also a creative way to keep them on a tight leash and is a common set of terms. You also need to have a late payment clause in the contract (like 1.5 – 2% compounded per month).
“Going direct” is more like a real B2B deal and needs to be treated as such.
Good points. All valid.
hmmm.. I have mixed views on this one. I guess since I started out going straight to the advertiser I’m a little biased towards that. Just now starting to test the waters with the big networks.
As long as your promotion is not shady it’s a win-win for both you and the advertiser, and most would be willing to work with you considering payouts etc… plus they probably know their business and industry way better than a manager at a network and can give you inside pointers on their product and competition … just my 2 cents
Interesting post! We are currently testing out an “Ambassador” model which acts as a hybrid between going direct and going through a network. Essentially, you get advertiser direct payouts as you would if you went direct, and most times, even more, as we leverage network volumes. Instead of a margin that the network usually takes, you pay the network a flat monthly fee. Due to the lower margins, there are no reward programs, no free toys, no referral program, net 30 payment terms, but these are what you would have to give up if you went direct anyway.
Good points. I think they mostly relate to lead gen marketing though – which is what you mostly do I think. For affiliates doing physical product sites I think working with merchants directly is best (in general).
Good stuff. Going direct is not as worth it as I thought…
WHOA! You wrote exactly what I was just thinking. I write for a couple Technorati Top 100 blogs and sometimes I get approached directly by vendors. The points you made were my exact concerns.
Very nice posting, I love it :)
2 Points.
1. I’ve said this for years If you’re going to run questionable traffic always send it through a network.
2.If you have lots of good clean traffic go direct. The bottom line is the affiliate company will always take your traffic and negotiate with you. That’s how they make their money. They understand you going direct is just business.
Paul, I trust you’d NEVER use grey or black hat methods with our campaigns. Riiiiight? :)
Nice to see the pros and cons. So can you go direct if you arent you? If we are making money, but not UA money, will they still go direct? It looks like you would have to have something to offer first.
Shudogg Dot Com – Make Money Online Blogging
isn’t it complicated to get payed by advertisers directly .. and claim the number of sales made?
Agreed. It’s just so much easier to manage everything from one place too!