Incentivized Traffic: Easy Earnings or Headache for Advertisers?

Posted on5 CommentsCategoriesAffiliate Program Management, Online Marketing

Incentive affiliateI’ve been thinking a lot about one particular type of loyalty affiliates lately — the type that encourages their website visitors to fill out surveys, submit application forms, order samples, and get paid for it. This type of publishers is essentially as sub-type of incentive affiliates. These affiliates frequently sell the idea to their website visitors using such wording as: key to “financial freedom”, unique “work-at-home” idea, “fast and free” money (see image on the right), and other get-rich-quick type verbiage. It is also interesting to point out that many of these affiliates are actually earning good money on it.

So, (i) the affiliate is making money “selling” free stuff, (ii) his/her website visitors do all the work (of filling out forms, requesting free trials, and ordering samples) and get paid for it; but about (iii) the advertisers featured on such websites? Is this kind of traffic/audience (incentivized to do what they do by cash) even right for some of them?

Here’s a screenshot from a website of another such affiliate:

Incentive affiliate

Let’s take the circled testimonial as an example. Russel from Ohio took his time signing up “for absolutely free offers” and this earned him not only the free samples/trials, but also $105 of cash on top of if! Wow. If he keeps at this speed, his house will be full of various samples, plus he’ll have close to $1,600 of extra cash in his bank account every month.

Not getting into the details that some of the “free offers” will hit your credit card past the free trial period unless you cancel your subscription, let’s briefly look at the value of such leads for the advertisers.

Example 1

Type of business: health-related e-tailer
Qualifying action: order of free sample
Affiliate commission: $45 per sample
Incentivized visitor gets $30 to submit his/her name, contact and credit card info
Question: What are the chances that they are really interested in the product?

Example 2

Type of business: auto insurance agent
Qualifying action: fill out name and contact info
Affiliate commission: $20 per lead
Incentivized visitor gets $15 to perform the action
Question: Are they really interested in the auto insurance, or in the 15 bucks?

“Customers”/”prospects” that are motivated to try your product or fill out a subscription/lead application by anything other than a genuine interest in your product or service are of no value to you! If someone is paying them cash to fill out an insurance quote form, or get a free trial of a software application, or a free sample of a product, that‘s their motivator — immediate cash (not your product/service)!

If you have an incentive affiliate aboard your program, ask yourself if they are really helping you. There are contexts when they are (e.g.: real purchases), and there are situations when they aren’t.

This post is written specifically with auto-piloted affiliate programs (and programs that auto-approve all affiliates) in mind.

The answer to the question posed in the title of the post is: “Both!” Incentivized traffic is both easy earnings for affiliates, and can be a real headache for advertisers. As for the incentivized end-users themselves, it can also be both for them — especially if they start getting credit card charges past those free trial periods.

5 thoughts on “Incentivized Traffic: Easy Earnings or Headache for Advertisers?

  1. I remember talking with a merchant who “got taken” (as they put it) to the tune of over $16k when their offer was promoted via incentive sites on a CPA network. They pulled the offer quickly (within a couple of weeks), but the financial damage had been done. On top of the direct marketing costs in network fees and commissions, something like 90% of the referred customers ended up cancelling their subscription to the service after getting their “free” sample. So the total cost was significantly higher for them. I remember doing a lot of education with the merchant about how this particular model wasn’t reflective of all of affiliate marketing.

    There are several very large “work at home” forums out there that are devoted solely to end users discussing how to make money off of these types of offers (i.e. which offers require credit cards, which ones actually payout the incentive, which merchants provide an easy cancel process before the cc is billed, etc. Basically how to work the system. Interestingly, I’ve seen representatives of some cpa networks participating at some of them.

    There are some merchants who are able to utilize this form of marketing effectively. There are some large brand direct marketing merchants in this area. But…

    Those who are successful in this arena have a lot of experience making it work and are well versed in all the ins and outs (managing the partnerships, managing the leads, etc). It’s definitely an area where the uninformed should jump into without a full understanding of the model.

    It’s always good advice for an advertiser to understand how their product/service is being promoted.

  2. Thank you for your comment, Kellie. I myself have been discussing this same problem with a merchant at the past Affiliate Summit West 2010, and they have burned themselves badly on a “CPA network” as well; and they too extended their disappointment (to put it mildly) to the whole industry of affiliate marketing. Sad when this happens. Education is crucial.

  3. I’m sorry that I didn’t see this post earlier! I obviously have a vested interest. 🙂

    First of all, it’s disappointing to me that more merchants do not dump from their programs the incentive sites that encourage this type of behavior. It’s easy to figure out which ones do if you Google the name of the site and anything about “cancel” or “make money quick.” Some incentive sites make the majority of their money off of this crap but many merchants continue to work with them in other ways because they figure it is not their problem. So those sites get more members in general because the continue to work the system. It’s almost impossible for those of us who are clean to try to compete.

    Second, people would be amazed at just how tricky these people are who literally make a living doing this kind of stuff. They try everything from stolen credit cards to prepaid debit cards to ordering but not taking delivery on products. As Kellie said, there is no shortage of sites out there that will actually “teach” you how to be a big cheater.

    Lastly, I completely agree that there are some business models that just don’t lend themselves to incentive sites. Or if they do, you have to tread lightly. You may be able to do a paid click for an education offer or a .25 signup for an insurance offer because you expect that only 1 out of every X number who sign up will actually be interested. So you have to DRASTICALLY reduce the payout.

    I so wish that the bad apples didn’t ruin it for everyone else, but I guess that is business in general.

  4. Tricia,

    I highly appreciate you taking the time to comment. As an affiliate running a 100% clean loyalty website, you are a perfect commentator on this topic. I agree with everything you’re saying, and yes, it is unfortunate how these rotten apples spoil the whole barrel.

    Thanks again for taking the time to comment.

  5. Very interesting article. Unfortunately in some countries in which affiliate marketing is in the development phase, many affiliates lack expert knowledge and it is our role ( the network) to teach, recommend and enhance their knowledge in order to optimise this win-win-win relationship.

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