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Restricting Revenue Streams

Restricting Revenue Streams

November 9, 2009
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" For some affiliates, it's about protecting their own traffic "

As the economy tightens and site owners look for ways to extend their billing options to maximize revenue from all possible sources, their decisions are bound by a few areas of resistance. Obviously, there are legal requirements that must be abided by; credit association guidelines; and ethical considerations which get weighed against any potential increase in profits that a change in processing might bring.

However, on the question of whether affiliates should have input about the billing practices utilized by the sponsors to whom they send traffic, the waters become a bit murkier: Does an affiliate have the right to be heard with regard to the way site owners run their business when join page terms and processor options are the primary subject-matter being decided, even if their requests would result in restricting potential revenue streams?

For some affiliates, it's about protecting their own traffic from aggressive billing tactics in the hope of earning future sales by establishing an ethical reputation.

"We have the final say in what our traffic has access to. It's our responsibility to protect surfers from unreasonable billing practices, which also serves to safeguard our business," said Doug, director of marketing for RabbitsReviews.com. "We pull any sites that have questionable methods and warn surfers when signing up [to a site] can be tricky."

"The more webmasters that exercise the option to promote only programs that use reasonable billing methods, the harder it will be for those that don't to flourish. If adult entertainment is your livelihood, you need to look long and hard at more than just your next affiliate check," Doug added. "You need to look down the line and see the business you generate today coming back tomorrow. Don't let the faceless nature of digital marketing fool you. Real people are out there and they are your neighbors, your friends and your family. They depend on you to keep them safe."

For a massive review site like Rabbits Reviews which deals with hundreds or thousands of sponsors and relies on recurring traffic, input about all aspects of a sponsor site becomes important. For other affiliates like respected SEO guru and frequent GFY contributor Jdoughs, that input is a much smaller concern because he is able to narrowly select which sponsors to do business with in the first place.

"I don't spend much time figuring out how they bill, but generally I only deal with older companies so their billing practices usually are stable and legitimate," offered Jdoughs. "It's part of why I think many affiliates are slow to promote newer programs and why personal trust matters so much in this business."

On the sponsor side of the equation, many affiliate program owners expressed a willingness to listen to new ideas and feedback from affiliates, including some of the largest programs in the industry. "In tough economic times business owners get pressure from both sides," said Clement of VideosZ. "On the one hand you want to be sure you are maximizing revenue to make sure each click is monetized fully. On the other hand, you want to make sure your site is always known for being ethical and 'safe to promote.'"

"I have found it very valuable to listen to what affiliates have to say about every part of the VideosZ affiliate program including on-site and off-site decisions," Clement added. "We do not always agree, and that's fine, but it is important for affiliates to know that their voice is being heard and that we are always looking to work together in a way that is the most profitable for everyone and fair for the consumers as well. I think that comes from the fact that we were affiliates long before we became site owners."

Another very well known industry veteran who has seen things from both the affiliate and sponsor point of view is OCCash Director of Marketing, "XXX Jay" Quinlan; and as he explains, satisfying a variety of billing ideas from affiliates can become expensive.

"I would be fine with making changes based on affiliate feedback and am even open to setting up billing for individual requests, but there is no technology available to do this. We do offer a no cross-sale option for affiliates that want it, as well as custom pricing," Quinlan stated. "Also, the less aggressive the billing or the lower the price, the lower the payout, as there is less money coming in."

"There are cases where an affiliate has 'trusted traffic' that has a comfort level, so it might be best for an affiliate to offer less aggressive options and I am cool with that," Quinlan continued. "We would offer alternate join pages if an affiliate requests, but we have to have the needed billing relationships first. Every account we open (even a dormant one) with a new biller costs money."

For TopBucks management, billing input seems to be sorted into two different categories: Items involving revenue potential are handled by utilizing a sliding payout scale, while ethical issues are taken very seriously regardless of their revenue significance.

"We have no problem with making reasonable changes to our join pages and subscription offers at the request of our affiliates, provided that the affiliates understand that there will be a corresponding reduction in their payout when the change they request results in less revenue per signup on our end," said TopBucksMobile.com Director of Marketing and Sales, Lea Busick. "For example, if an affiliate doesn't want cross-sales on the join pages their surfers are sent to, we'll grant their request; but we can't grant the request AND pay them our maximum PPS rate."

"We treat other requests and changes to our billing and subscription protocols the same way; we pay less for signups sent through our console-free tours by the same rationale," Busick noted. "Affiliates should understand that we're in this to make a profit, and when changes are made that affect our bottom line, that's going to mean alterations in their webmaster payout accordingly." As for the ethical issues facing the industry due to the fact that some sponsors have been choosing very aggressive billing options lately; "Of course we believe it's absolutely right and proper for webmasters to make their voices heard to the affiliate programs they promote," Busick said. "We actively encourage webmasters to care about things like ethical billing practices, and implore them to steer clear of programs that mislead consumers, obscure or hide their cross-sales or make it virtually impossible to cancel memberships. That sort of behavior negatively affects the perception of the adult industry as a whole, and webmasters are absolutely right to be harshly critical of it."

Some long time affiliate whales suggested that recent message board hysteria involving small affiliates complaining about sponsor billing options is largely overstated in importance.

"Affiliates who send a lot of sales generally don't face the same problems many smaller affiliates face," adult affiliate WiredGuy offered. "When I decide which programs to promote there are many factors that matter to me but they are rarely the kinds of things I see people screaming about on message boards all the time."

Perhaps it was the venerable and successful sponsor program ARS whose owner summed up the situation best:

"For any program to be worth the affiliates' time in promoting, the billing would need to already be set up to take full advantage of all payment methods available, including cascading credit card processors as well as international billing options," Becky of Adult Revenue Service said.

"If an affiliate is loyal, sends a decent volume of joins and most importantly has a decent average member value, then yes I'm always willing to discuss just about anything with them regarding billing or any other aspect of the sites because they have a vested interest in the success of the sites long term," she concluded. "Otherwise, no they don't get to influence my decisions because making adjustments to please people who may not even be around when those changes go into effect is not a smart way to operate any business."


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