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Originally Posted by FightThisPatent
Also, that some paysites run without an affiliate program, by purchasing traffic, traffic exchanges, etc, to essentially remove the need for affiliates?
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Back when sales were fast and furious, the average affiliate sent all his traffic to maybe a half dozen sites owned by 2 or 3 sponsors. Even when affiliates started to get into 'niched hubs' and the whole concept of filtering traffic, most traffic was still sent fairly indiscriminately and with money rolling in freely, no-one minded too much if their surfers hit warps, popup hells and the rest. All that has changed, at least for the majority of experienced webmasters who source most of the traffic. Now they take care where their traffic is sent, don't expect it to be jerked around too badly, and want most if not all the extra sales links to carry their codes.
Since I don't have a paysite I have to guess, but I would expect the cost of sales for many sites to be 5-10 times what it was in 2000. And that is laid on top of the "simple" calculations we have always played with about payout v direct income and the need for cross-sells and up-sells to make up the difference (all of which has also become harder because of surfer experience, Visa, FTC, etc).
The effects of all this will be far-reaching. We are going to see a lot of mergers and names going to the wall. And inevitably, a lot of sponsors will figure out it is cheaper and they have more control, if they buy traffic directly, rather than rely on an expensive and fickle affiliate network to generate it.