Home > Features > The Real Value of Sponsor Payouts • Bookmark   • Newsletters   • Register Search Options

FEATURE

The Real Value of Sponsor Payouts

The Real Value of Sponsor Payouts

October 4, 2008
Text size: 
Get XBIZ News
XBIZ Research
Will virtual reality boost the paysite market?
Yes, it will soon
  39.72%
Yes, but in a few years
  37.59%
No
  22.70%
Out of 141 votes. Results based on votes submitted by members of XBIZ.net social network.

" affiliate marketing is an auction "

As more new webmasters enter the adult online affiliate business and veteran webmasters continue to complain about an 'ever-shrinking' porn economy, examining the real value of sponsor payouts is something everyone ought to be doing with a keen eye.

The huge font text on an affiliate program website claiming "up to $40PPS or 65% Revshare" may look dazzling at first, but upon closer inspection the real value of those numbers may be considerably less than what other programs actually pay you even if they are promising $30PPS or 50 percent revshare. It isn't because of anything shady or illegal, but simply because they are marketing their program to affiliates the same way you market sites to consumers.

Some sponsors list the "up to" amount with small print requirements that you send at least X number of sales per pay period to earn that rate. Many list the amount paid for links that include pop-up consoles but pay a lower rate for traffic sent to link codes that do not include consoles. Figuring out the actual pay out per sale is a good starting point for newcomers but if you think the only amount that matters is the amount that you will be paid for each sale, you are probably leaving a lot of value on the table.

Let's say a sponsor has a minimum payout of $100 and you send them three sales using a $35PPS link code. You may expect that to result in a $105 payout and from many sponsors it will. However, some sponsors charge processing fees to generate your payment. While some are free, others may be the cost of a postage stamp and some are as much as ten dollars per check or forty dollars for a wire payment. Keep in mind, if your check is for $12,000 then the ten bucks won't matter much, but if you are getting a check for $105 and it has ten dollars deducted from it as a processing fee, you are paying more than 9.5 percent of your money for the privilege of getting paid. That cuts your actual PPS down from the $35PPS you expected to $31.67PPS in reality.

The valuation of processing fees, console links and "up to" payouts is something most veteran webmasters are already well aware of, but it is only the first step in evaluating the real value of a sponsor's payouts. With so many potential variables between one affiliate program and another you will almost never be able to get an exact 1-to-1 comparison of their real value. However, the process of looking for hidden value is something a prudent affiliate should do any time they consider working with a particular sponsor. Here is a look at some of the ways quality sponsors are adding value above and beyond the listed PPS or revshare you'll see posted on their affiliate program sites.

Most sponsors only offer affiliates a set price point for the paysite memberships they are being asked to sell. That's what a sponsor like PIMPROLL that gives their affiliates far more freedom to set their own pricing should be given credit for adding extra value. "By offering multiple price points, we essentially let the affiliate set their own trial or monthly price for each PIMPROLL site they promote, including Porn.com, thereby giving them total control in crafting a sales pitch that best suits their own traffic," said David of PIMPROLL. "We've found that our affiliates are happier and wealthier with the freedom to pick 'the perfect' price for their own needs."

Yes, each link choice has a different stated payout amount, but you know better than anyone else how much money your traffic is typically willing to pay for its adult site memberships. That means you can choose a lower price to spur better conversion rates or a higher price to squeeze extra value out of each sale you send.

Other sponsors like FameDollars offer 'discount' pricing link-codes to affiliates who are interested in listing their site as being "on sale," much the same way a department store might reduce pricing to increase sales volume. "FameDollars does offer discounted pricing links to qualified affiliates who generate high-value sales retention," said Magalie, Affiliate Manager for FameDollars. "Having the discounted links adds value to our affiliate's site because it lets them tell their own customers that they can get special deals on join prices for them." In that way, sponsors who provide discounted pricing links help your site retain its traffic, which means more sales from boomarkers who feel your site is worth visiting again in the future.

Some webmasters have started to take advantage of 'White Label' options available from sponsors. "We offer white label versions of KinkOnDemand.com because we believe our premium content drives better conversions and leads to higher payouts than other VOD sites in our niche," said Terry Mundell, Affiliate Program Manager of Kink.com during our recent discussion. However, another way to look at White Label offers takes into account the added value of having free content provided to you by a sponsor enabling you to strengthen the brand of your own website. Again, it's a clear example of a quality sponsor giving their affiliates more than just the listed PPS or revshare payments.

Do a search for "porn" in any search engine these days and you'll see thousands and thousands of adult paysites to choose from. Finding sponsors your customers have not seen before, sites that are new to them and marketing strategies that might excite them is more important to your site's financial success than comparing who has the higher "up to PPS" payout.

"The industry has been working for too long already on the recurring membership / pay per (free) signup business model," said Rex, owner of TotemCash. "All the content available for free everywhere is killing that model today and instead of whining about it, we found a better way to make money. With VirtuagirlHD, we allow surfers to buy individual segments of our content so they can choose to purchase as more or as little as they want. Now they are spending even more money because of the freedom we give them to buy girls or videos one-by-one for smaller amounts with no strings attached. Today affiliates have to learn new business models and start focusing on how much they earn per click sent." Also, because VirtuaGirlHD is software based, it is not subject to the same hazards from free-sites affecting most other video content.

The point Rex makes about money earned per click is one that many webmasters repeat to themselves over and over but it seems some forget how important it actually is when considering a sponsor, and others forget that value comes in many ways other than per dollar.

Knowing the real value a sponsor is paying you per click, among other things, completely removes any possibility that your decisions will be affected by "shaving." How is that possible? Do the math:

If for example you send 10,000 clicks to sponsor X and get paid a real value of $100 you know that you are actually being paid one cent per click. If you also send 10,000 clicks to sponsor Y and that sponsor pays you a real value of $500 you know you are being paid five cents per click. Once you have that information, whether sponsor X or sponsor Y shaved your sales becomes irrelevant. All that matters is who has actually paid you more for the traffic you have sent. If sponsor Y is shaving you and still paying you five times as much as any other sponsor, why would you care? If sponsor X never shaves you and pays you 1/5th as much as another sponsor… how is that better for you?

At the end of the analysis, affiliate marketing is an auction. Each sponsor is bidding a certain amount for each click you can send them. The key fact to keep your eye on is that the amount of their bid is not the big font "up to X PPS" number on their website. It's the actual dollars they pay you divided by the number of clicks you sent, plus any alternative forms of value they added.


BUSINESS ANALYSIS

Manufacturers Take Action Against Counterfeit Sex Toys

The mainstreaming of pleasure products is proving to be a blessing and a curse for the sex toy industry. As the demand for pleasure products continues to grow, manufacturers are seeing an increase of counterfeiters... More »

Trends in Paysite Design, Content Delivery

Given the highly visual nature of adult entertainment, it is no surprise that many paysites have shown design-forward approaches — some skirting the bleeding edge, while others sought stability over... More »

Surviving Affiliates Seem to Be Thriving

Long a mainstay of traffic generation for adult website owners and monetization channel for tech savvy marketers, “sponsor programs” have delivered countless millions of dollars to affiliates... More »
XBIZ NEWSLETTERS
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.






POPULAR PRODUCTS & SERVICES
Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Access the latest issues of the industry's leading trade publications in digital form. View online or download for offline viewing.

UPCOMING EVENTS

eroFame

Oct 05 - Oct 07
Hannover, Germany

EXXXOTICA Edison

Nov 04 - Nov 06
Edison, New Jersey

2016 Inked Awards

Nov 05 - Nov 05
Edison, New Jersey

XBIZ 2017

Jan 09 - Jan 13
Hollywood, CA
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!