TLDRMoney
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Have you ever wondered why some networks have much HIGHER payouts than others on the exact same offers? This is typically the result of networks re-brokering offers. Sending traffic to re-brokered offers is problematic to affiliates for many different reasons. Let's take a look at a visual of the Advertiser-Network-Affiliate relationship.
In a perfect world, this is how a typical relationship should work. The product owner provides the offers to the CPA Network and in turn, the CPA Network provides the offer to the Affiliate. The CPA Network gets a higher payout than what they offer the Affiliate, making their 'margin' as a middle man that mitigates risk. However, this isn't as common as it should be and we often end up with a much more complicated situation.
In this situation we have 3 CPA Networks in between the Affiliate and the Advertiser. Each of those CPA Networks are taking a 'margin' which is often 10% or higher. This dramatically decreases your payout and severely limits your campaign's potential ROI. Let's look at an example
Advertiser gives Network #1 a payout of $40.00 on offer 'X'
Network #1 gives Network #2 a payout of $36.00, keeping a margin of 10% ($4)
Network #2 gives Network #3 a payout of $32.40, Keeping a margin of 10% ($3.60)
Network #3 gives the Affiliate a payout of $29.16, keeping a margin of 10% ($3.24)
The offer payout has decreased by 27% by the time the Affiliate gets their cut. This is a pretty high percentage considering the bigger picture. This isn't the only issue...
What happens if Network #2 goes out of business and doesn't pay Network #3?
What if Network #3 goes out of business and doesn't pay the Affiliate?
What happens if there is a tracking issue and your conversions are not showing in your portal? There are 4 different tracking systems, not including your own personal click tracker. There are too many potential points of failure and waiting for a CPA Network to fix tracking can be like watching paint dry. It can take a very long time depending on their experience.
In 99% of cases, smaller networks re-broker offers form bigger networks because they don't have the access or credibility to work directly with the advertiser. If an advertiser doesn't want to allow you to run their offers as a CPA Network, they certainly do not want other networks to gives those offers to those same rejected networks. If you are a network and get caught Re-Brokering, there is a good chance you will lose access to those offers.
If Advertisers will not trust these networks with their offers, should you trust those networks with your traffic and your commission?
These networks that have re-brokered offers are very often scams. They disappear with Affiliate Commission and re-surface 6 months later under another name just to do it again.
You should also focus on dealing with top tier CPA Networks and Direct Advertisers.
Why not just run direct? Why not cut out the CPA network completely?
There are some benefits to running traffic to a CPA Network. Advertisers are known to be just as shady as CPA Networks. A CPA Network is there to mitigate risk for affiliates. If an advertiser runs away without paying a CPA Network, the CPA Network is still obligated to pay you as an affiliate. They may also have a wide range of contacts and access to offers that you would never be able to get as an affiliate. Some advertisers refused to work directly with affiliates and will gives exclusive rights to an offer to a particular CPA Network. Other advertisers will refused to work with CPA Network and only work directly with Affiliates.
Conclusion
Strive to work directly with top tier CPA Networks or Advertisers. Always ask your Affiliate Manager if they work directly with the product owner to avoid re-brokered trash.
In a perfect world, this is how a typical relationship should work. The product owner provides the offers to the CPA Network and in turn, the CPA Network provides the offer to the Affiliate. The CPA Network gets a higher payout than what they offer the Affiliate, making their 'margin' as a middle man that mitigates risk. However, this isn't as common as it should be and we often end up with a much more complicated situation.
In this situation we have 3 CPA Networks in between the Affiliate and the Advertiser. Each of those CPA Networks are taking a 'margin' which is often 10% or higher. This dramatically decreases your payout and severely limits your campaign's potential ROI. Let's look at an example
Advertiser gives Network #1 a payout of $40.00 on offer 'X'
Network #1 gives Network #2 a payout of $36.00, keeping a margin of 10% ($4)
Network #2 gives Network #3 a payout of $32.40, Keeping a margin of 10% ($3.60)
Network #3 gives the Affiliate a payout of $29.16, keeping a margin of 10% ($3.24)
The offer payout has decreased by 27% by the time the Affiliate gets their cut. This is a pretty high percentage considering the bigger picture. This isn't the only issue...
What happens if Network #2 goes out of business and doesn't pay Network #3?
What if Network #3 goes out of business and doesn't pay the Affiliate?
What happens if there is a tracking issue and your conversions are not showing in your portal? There are 4 different tracking systems, not including your own personal click tracker. There are too many potential points of failure and waiting for a CPA Network to fix tracking can be like watching paint dry. It can take a very long time depending on their experience.
In 99% of cases, smaller networks re-broker offers form bigger networks because they don't have the access or credibility to work directly with the advertiser. If an advertiser doesn't want to allow you to run their offers as a CPA Network, they certainly do not want other networks to gives those offers to those same rejected networks. If you are a network and get caught Re-Brokering, there is a good chance you will lose access to those offers.
If Advertisers will not trust these networks with their offers, should you trust those networks with your traffic and your commission?
These networks that have re-brokered offers are very often scams. They disappear with Affiliate Commission and re-surface 6 months later under another name just to do it again.
You should also focus on dealing with top tier CPA Networks and Direct Advertisers.
Why not just run direct? Why not cut out the CPA network completely?
There are some benefits to running traffic to a CPA Network. Advertisers are known to be just as shady as CPA Networks. A CPA Network is there to mitigate risk for affiliates. If an advertiser runs away without paying a CPA Network, the CPA Network is still obligated to pay you as an affiliate. They may also have a wide range of contacts and access to offers that you would never be able to get as an affiliate. Some advertisers refused to work directly with affiliates and will gives exclusive rights to an offer to a particular CPA Network. Other advertisers will refused to work with CPA Network and only work directly with Affiliates.
Conclusion
Strive to work directly with top tier CPA Networks or Advertisers. Always ask your Affiliate Manager if they work directly with the product owner to avoid re-brokered trash.
