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Mastermind #1 Reason Why Most People Will Fail at CPA - THE BACKEND DILEMMA

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Staff member
There are a lot of reasons why people fail at CPA marketing. One of the main reasons is that they don't take the time to learn how to do it properly or they don't understand how the business actually works. They try to jump in without doing any research and end up wasting a lot of time and money.

It's no secret that CPA affiliate marketing the "old fashioned" way is dying slowly for a lot of people.

What is the the old fashioned way?

It involves choosing an offer from your network, setting up a lander (or direct linking), choosing a traffic source, buying an ad, and waiting for results, and then tweaking it...all the while just PRAYING it works.

This is typically called "ARBITRAGE" - you attemp to spend less in ads than what you earn in commissions.

Arbitrage is fun and all but the fact is, it is not a business, and it is getting more difficult by the month.

Higher CPMs, less targeting options, privacy rules, offer rules, more advertisers, arejust a few examples of the challenges we face.

Most newbies get excited about CPA because you get paid for actions and not sales.

This means a company out their values that "action" at a certain amount, and they are willing to pay you $xxx to get certain people to complete that action.

Let's use $100 cost per action as an example.

Let's pretend you found an offer on your network that pays you $100 when you get somone to buy a bottle of diet pills for $69.

That's exciting because you get paid more than what the customer pays!

What many new affiliates don't understand is that cost per action is based on millions of dollars worth of ad spend, testing and optimizations.

The advertiser (offer owner) knows that good customers are worth more than what they payout to affiliates and networks. This is based on data from their "backend".

This "backend" is an advantage that newbie, and old fashioned affiliates don't have.

In other words you are trying to compete for a front end sale against tens of millions of dollars (if not billions) and trying to beat a CPA that has been proven to cost a certain amount of money. At the end of the day even if you beat the CPA's you have nothing as a business. (but you do have profits)

Offer owners have a tremendous advantage.

They can see how you are beating their CPA's, they can see how many people rebuy their product, they can pitch upsells, they can email people you send them, they can text message them, they can retarget people who almost buy their product and sometimes even strip affiliates cookies so they get the sale eventually for free. They can even sell their data that you give them.

All these things are factored into their true "Lifetime Customer Value" which you can bet is worth much more than what you are getting paid.

Also, don't forget that the network is likely taking %10-20% of your payout just as the middle entitiy. The true CPA is probably $120 and you get $100.

Don't worry I am going somewhere with this....

So the first lesson is understanding how the payout is calculated. Most super affiliates know that the network is getting a cut. They know that the true CPA is probably $120. So they work deals either direct with advertisers or they demand higher payouts from the network.

At this point they already have a slight advantage over the newbs....cause they can now bid higher and attempt to beat the proven CPA of $120. (which is still going to be difficult).

It is difficult because there is always a "backend" to these CPA offers and if you can't reach certain key performance indicators (KPI's) for your offer the advertiser will shut you down.

For example if you send a bunch of shit traffic and fake people into buying, they likely will not buy more products and so your customers won't "back out".

It is a fine balance between good advertising, and trying to get as many conversions as possible.

4 Ways to Beat the Odds...

So now that you know what you are truly up against....

If you are going into CPA thinking arbitrage is a long term strategy you are going to burn out and lose money.

I am not saying you should not do arbitrage because that is how it all starts. I usually test and find things that will convert and I do simple arbitrage on different traffic sources. BUT the big difference is once I hit break even or profitability

It is at that point I'm pretty much moving to the next phase - you could call it "backend development" as an affiliate...

You need to think outside of the box and not fall into the trap of constantly trying to beat a CPA that is set up for your failure. There are many smarter affiliates out there who are constantly looking for ways to beat the odds.

You need to create your own advantages. here are few ways to improve your chances of success:

1. Understand payouts and KPI's. Don't just take the street payout from your network. This doesn't mean you walk into a network guns blazing and ask for higher payouts without sending 1 damn conversion. At that point you look like a douchebag. You set up a test to see if you can even get a conversion first. Then when you do get a few conversions, you now have a bargaining chip. You have proven you can convert the offer. If they want you to stay they pay you more or you go find the offer somewhere else. (or direct) There are many advantges to not going direct I won't cover here.

2. Tracking - You need to track EVERYTHING you can. Take advantage of what the offer owner or network allows for. For example many advertisers now accomodate affiliates with more than just "conversions" tracking. Many times you can ask to have your tracking pixels placed in the funnel of certain pages in the advertisers back end. For example everyone who reaches the checkout page. So you can now optimize your campaigns on that data or even retarget people who are deeper in the funnel.

3. Backend - Create your own "backend". Now this one I am seeing more and more. This can be done several ways but the most common are popunders (triggered by click) to a opt in page, push notification prompts (like one signal), or even using a service like monetizer. Be careful with these things because some ad platforms are watching...and it can be a risk on places like Google. But generally what happens is you collect data from a certain percentage of people who visit your landing page, and it is pretty much seamless. This allows you to do your own backend follow ups and marketing. This can really grow to being a bigger business since you now have "subscribers" that you can send messages to. Send them to your own monetized blog related to the products or services you were pitching in the first place.

4. Re-invest - When you finally do produce a profit in your CPA campaigns don't start thinking you are invincible. No one gives a shit about your flashy lambo... It's time to be VERY conservative and start looking into your future plans of developing your business in this niche and eventually retiring. Invest in building a larger website following.

Maybe think about creating your own product someday, or make your business sellable! This means having your own data, have analytics showing that your web visitors are on the rise, and that your business is sustainable...

You can do this ALL as an affiliate marketer.

Let's not forget that we affiliates have a VERY BIG ADVANTAGE...

A better quality of life and time...when we don't have to directly deal with the hassle of building a larger backend with shopify or woocommerce, we don't deal with shipping, customer service, refunds, paying for returns, fullfilment fees, credit card processing fees and "frozen mids", shipping delays etc...

I would like to open the floor now...

What have you done in your campaigns that might help others achieve long term success as a CPA affiliate?
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Premium Member
I'm putting together a YouTube Channel in my niche. I'm going to make a few videos first and then upload them. I plan to have a link for people to sign up for my email list. There I can give them useful information as well as offer them affiliate products they might be interested in based on my topic of conversation in my niche.

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