I think that we are pretty close to a cascade effect that will ripple through the industry.

A lot of the TGP guys I know who were balling with big networks two years ago are now getting close to their margins. When these guys start going the programs that rely on this sort of traffic will go. I suppose also a lot of the hosts who cater to them will be hit as well. Adult uses a lot of capacity, and god knows how they will sell it when there is no way to monetize it.

I would say a lot of programs that rely on affiliate traffic will soon be gone, shady or not.

thanks for the info

i actually love hove things are going

How about illegal girlfriend submit sites? All those users will stop sending in their ex-gf pictures and the webmasters will resort to 4chan and usenet. :1orglaugh

That is unfortunate. I wonder who is next.

Supplying content is just one aspect of it and a very small one at that, since you are correct you would normally need that kind of stuff yourself for building in-house traffic network of blogs, mini-sites, etc...

You also need to consider the hassle of dealing with affiliates versus the return.

First, you need staff to support the affiliates. You also need staff to aggressively pursue new affiliates. Often, they are one and the same when they really should be two different departments. You need to either build or spend money on an affiliate program and maintain it. You need to handle payouts.

Second, how much company time and resources are wasted with no return? It's not very uncommon that an affiliate makes a special request and never follows through. For example, Affiliate X contacts program and tells them if they can do "this, this and this" for him, he can send them a ton of traffic. The company takes time to evaluate it, decides to implement it and the affiliate ultimately sends them nothing or his idea was a flop.

Third and perhaps most important, is the profit margins are much lower than doing it yourself. You constantly have to compete and match what the competition does in regards to promotions and payouts or you lose traffic. While there are loyal affiliates, I'd wager the majority want to make the most money possible and jump from promo to promo, always drop old programs in favor of the "hot, new sites", etc...

My recommendation is:

A) Build "cores" or small teams of employees who are given the required resources as well as traffic/sale targets to reach each week. Initially, you may have to spend some time and money figuring out the right formula, but once you do, things are mostly on auto-pilot and you simple scale, scale, scale by hiring more independant "cores".

B) Work out individual deals with specific sites or affiliates, that you believe will bring a quality return. This can include pre-paid deals, just be careful not to get screwed.

I agree with we haven't seen the worst yet. So far affiliates and programs has gone off the radar silently in a moderate pace.

How is it looking at the production side of our industry?

The pace might accelerate now. I would prefer to get over and done with it as fast as possible. But time is part of the equation, those going out has to spend their reserves first.

That's why it also makes no sense to go lower with the membership price if you constantly update and provide a major member value.

You need to get some sort of profit per member and if you pay a motherload of money on transaction costs, marketing costs and variable costs it's an easy math.

Try to ask Amazon to give you 50 pct. off every referred deal .. no one in the world pays 50 pct. commissions

That's why adult was and still is a gold mine for many

And that's why many so often get fucked

sponsors go down on a daily basis.

So then, is that the consensus of opinion that you're hearing from those voices in your... err, I mean from your staff?

:thumbsup

Excellent post

comparing tangible goods with small profit margins on amazon to porn isn't a very good comparison. there's a lot of people who've got very rich giving 50% away.

Lol...
 

If it stopped at 50% it would be cool... but what about the processing fee's ? CCbill take what 15% at best, 17% for most... plus for first 6 months a 5% holdback... so thats 50% at least for the affiliate... 17% for the processor... so thats 67% of the pie gone already... leaving 33% for the site owner... now take out the enpenses of everything else involved... sigh

i predict by the end of the year a sponsor will go broke every five minutes.

Any programs who rely on affiliates are gone in the next two years. It's why all the big programs have their own traffic and typically are their own biggest affiliate. I believe any payouts for average webmasters will fall in line with mainstream payouts and no I don't mean ACAI payouts lol, I mean amazon. Just my 2 cents though what do I know.

Yeah, and try to get them to do it for life.

Nope, what mainstream like Amazon will do is pay you 5 or 6% of a sale. And then IMMEDIATELY start emailing the customer with "specials" that of course don't carry your code so that they can take away any chance of having to pay you again.

Mainstream is MUCH "shadier" (seems to be a favorite term amongst newbies to the biz lately) than adult ever has been. And doesn't pay worth a shit.

Affiliate programs in general aren't going to go away completely. Just the ones with poor business models will be done with. The quality ones will still be around. The ones that have already died this year, in reality how good were they? How reliable were they with their payouts? How was their support?


Jack

only the sponsors with shady billing or old outdated content will go away. basically companies who never relied on rebills.

What about the companies who won't or don't know how to protect their content at all and so nobody is buying a membership because it's all free? How do those guys stay in business? Especially when the rebills dry up because their members start realizing that all their friends get the same members area for free off a bit torrent site or a file sharing site like rapidshare?

Everybody keeps talking about "shady" this and "shady" that. But you're all leaving out the one big factor that has already devastated this business: Piracy.

The loss of x-sells to this business is gonna hurt a lot of us affiliates. It's all fun and games on GFY until you wake up one day and realize that between tens of millions of dollars lost from x-sells stopping and tens of millions of dollars lost from piracy...that affiliate programs start shutting down until there's nothing left but a few.

I've already seen a 60% loss in my affiliate income over the last two years. If it weren't for AEBN, dating, and cams...I wouldn't even consider myself an affiliate anymore. :(

The lions share of my income was paysite sales for over a decade. It dwarfed cams and dating. And that statement seems insane in this day and age.

But now even cams and dating are becoming oversaturated as EVERYBODY is pushing it, and everybody that was gonna join has joined.

Is there ANYBODY in the world who hasn't already been cookied for AFF? I'm pretty sure every surfer who ever turned on a computer already has been cookied for one dating site or another and one cam site or another.

And unless your website is "pornhub" the chances of you cookieing the next new surfer to the net are slim and none. :(

That last line in the Quickbuck statement isn't far from the truth.

If it would be possible I'd never never push Amazon on any of my mainstream sites.

Definitely not interested to excite people about something, close them and then get what $ 0.25 per one book sold? So to make $ 50 a day I'd need to daily sell 100 - 200 books \ DVD's \ anything.

Makes no sense in the world.

Show me one shop selling this much on a day and their daily profit.

On the other hand I have to include some links cause it's the beast and the first place majority of people automatically go and look for stuff is of course Amazon.

so if every program reduced payouts to 6% like you say, which would be a joke and no one would send any traffic to them. a few programs would break away from the pack and continue to pay 50%, take all the affiliate traffic out there and clean up. and no in house traffic generation is ever going to compete with the 1000's of affiliates who would join those few programs paying 50%. i'm sure program owners would love to pay 6% but it isn't going to happen, its too competitive a market.

well programs can decide to pay what they like, some will sell more for a smaller margin and some will prefer to sell less at higher margin. the biggest problem isn't how much affiliates are being paid its the fact that the customer base has shrunk so massively with the advent of tubes.

You are free to pay what you want to your affiliates. Just as every other program is too. You pay the amount you do because that is a rate you've deemed to be good for your business. Lowering it to 5% would bring you no affiliates.

This is basic publisher-advertiser supply & demand that goes on everyday on the web. There around hundreds of thousands of stores who are giving a large percent of their sales to Google Adwords for their qualified traffic.

Amazon has much smaller margins than adult. Not to mention a trusted name that few companies can match and conversion rates that put adult to shame. Porn sites are a dime a dozen, so competition is much heavier for available traffic.

Slightly OT:

What is the possibility of "high risk" transaction rebills being stopped by Visa/MC rules?

Man, are you kidding?

A LOT of sponsors stopped paying.. seriously I can't remember so many to list... I'm personally owed over 1000 dollars from adultsallowed, others are owed several thousands, but here is a list with some programs that either closed down or stopped paying overnight:

http://www.signbucksdaily.com/marketing/blacklist/

the list is obviously NOT COMPLETE...

ADULT PROFIT FOR EXAMPLE IS NOT IN THAT LIST, I DON'T KNOW WHY, BECAUSE ADULT PROFIT CLOSED DOWN AS YOU CAN SEE HERE:

http://www.adult-profit.com/


.

And programs with "high profit margins" closing on a daily basis, much due to the retardation of their owners

two of the sponsors I see there that I use:
Adult Lounge (adultlounge.com) - shady billing
TrafficGigolos (TrafficGigolos.com) - shady x-sells

what exactly does "shady" mean in this context? I'm not sure I get it
and by the way, where is the proof ?

It's been stated several times that Daizzzy threatens to blacklist people if they don't pay his 'ransom', including TooMuchMedia, who make NATS. Using his data as a trustworthy resource is not recommended.

For what it's worth, I was on that list until I spent a few posts going after him, and he took it off.

Times are hard for porn.. business is changing.
those ones who have the capacity of adapting to the new ways are the ones that will be standing on their feet in the end.