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Originally Posted by punkworld
Stupid thread.
As was said before, contests are just an advertising expense, much like skinning GFY, buying banners on webmaster resource sites, etc.
The aims of a contest are to draw in new affiliates, get existing but inactive affiliates to send traffic again, and to get existing, active affiliates to send more traffic. A good contest (from the point of view of the affiliate program involved) is one that eventually brings in profits that are higher than the costs. Therefore, it should not have a negative impact on affiliate payouts. Quite the contrary, actually, when you take into account that overhead as a percentage generally decreases with volume .
Of course, for affiliates, the best thing would be if other affiliates never even found the sponsor, so it would never get saturated. Then again, sponsors aren't here to please affiliates, they're here to make money - like all businesses.
But hey, you go right ahead and boycot the next sponsor to start a contest. And while you're at it, boycot Coca Cola and Pepsi the next time they're giving away game consoles or whatever, because let's face it, by spending money on advertising they're driving up their prices, thus screwing you, the drinker 
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Before you lable my thread " stupid" you might want to compare apples to apples.
Skinning GFY IS advertising.
Giving one sponsor 60K and all your other sponsors NOTHING is NOT advertising. GFY is not an affiliate of their site.
Coca Cola gives prizes to CUSTOMERS, so they will be more inclinded to by the product, I have no problem with this model. If sponsors want to give away prizes to members, fine by me, will make it easier to sell their sites
Everyone understands WHY the Affiliate Companies do it. HAVE I EVER DEBATED or ARGUED why they do it. I am just making a point on why I think it is hurting their other affiliates.
I would love to know how many of your are 2 or 3 signup a week webmasters or affiliate owners. I never expected you to understand where i am going with this.
How many affiliates who actually get 5 or more signups a day, would switch their traffic to win a program... come on one person, honestly, step up to the plate and admit it if you do it.
How many affiliates (that generate a lot of sales for a company) think it is a slap in the face that the company they made a ton of money for is throwing their money around and gives it to some joe blow who sent in 5 signups over the last month?