educational

Sponsorship Program Basics

Stephen Yagielowicz

Sending traffic to sponsorship programs is the primary method of revenue generation for the vast majority of adult sites, and the best bet for newbies to make a profit. There is also a degree of confusion about the different types of programs available, something this article will clarify...

Sponsorship programs are offered in several varieties: clickthrough, per-signup and partnership; each of which is best suited to a particular type of traffic, and placement on your Web site. Many sponsors offer several different programs, and it is often your choice of sponsor, and not the type of program, that makes the biggest difference in your bottom line. It is up to you to test, and see which combination is right for you. Here are the three most popular types of programs:

Clickthrough Programs
Clickthrough programs pay you for each surfer that "clicks through" to the sponsor. This amount can be fixed (i.e. you will be paid 5¢ for each click on the sponsor's banner), or variable (you will be paid up to a certain amount per click, that amount determined by the number of clicks it took to generate each sale).

Consider this carefully: the flat rate clickthrough program will pay you a set amount, regardless of whether any sales are made or not. You send the traffic, and it's up to the sponsor to worry about membership conversion. For you to be paid under the sliding scale program, you'd have to send traffic that "converts" — and if you want the "advertised" rate, then your traffic had better convert exceptionally well.

What do I mean? Read the Terms & Conditions page of those "50¢ Per Click!" sponsors. You will find that your traffic must convert at an incredible rate for you to reach that payout level! Typically, you will end up with a much lower per-click payout rate. And what if your traffic *doesn't* convert? You may end up with 2¢/click, or sometimes nothing at all!

Even if you are able to make the higher payout rate, you may still be losing out. Let me tell you a little story: I once sent 3 "hits" to a "50¢ Per Click!" sponsor. They closed *2* of those prospects, and I received $1.50 commission! If I had sent those 3 hits under that same sponsor's per-signup program, I would have been paid $50 instead! I have avoided sliding scale programs since. I will still send traffic to a few flat rate clickthrough programs however, as they do have their place in a well balanced marketing mix.

Per-Signup Programs
This is the easiest type of sponsorship program to understand, and the type that I am most likely to send all my surfer traffic to. It does not get any easier: you refer the prospect to your sponsor, if your sponsor sells a membership to that surfer, you get paid a commission.

Because you are only paid for membership sales and not for traffic sent, the sponsor's rules of how you send traffic to these programs are more liberal than they are for clickthrough programs. For example, "pay-per" programs usually allow blind linking as a means of sending traffic.

Partnership Programs
This is often the best way for you to build long-term wealth; if you can trust the sponsor. Perhaps in this context, it's not a matter of having "trust," but of having "faith." Faith that the sponsor has the ability to convert, and more importantly, retain members. Let me explain:

In a pay-per model, you are given a single payout as a commission for the sale. The partnership program on the other hand pays a percentage of the initial sale, and a percentage of the recurring monthly revenue. This can add up, and exceed the amount you would receive from the pay-per program, but only if the sponsor can retain his members. If they only stay for a month, or worse yet, never convert from their initial trial membership, then you will be losing money.

I will usually avoid most partnership programs, preferring to take a decent up front payment, and then letting the sponsor worry about how he runs his business. After all, $30 today is better than "maybe" getting $40 three months from now ~ and taking a chance that the $40 will only be 88¢ (a typical commission on a non-recurring trial membership). After all, $30 today is better than "maybe" getting $40 three months from now...

I hope that this introduction to sponsorship programs will help you to select the right one for your needs, keeping in mind that the best bet is to employ an integrated mix of these program types. The most important thing to remember: test, test, and test again. Good Luck!

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