How much do sponsors really profit off a $35 payout?
 

So we have sponsors like ARS telling us that they can't "afford" to pay $35 for a $2.99 trial any more. Others are probably shaving to make more money, as the value of surfers has declined. I do enjoy the fact that ARS is up front about it, they rock, but...

My question is, when a company says it can't afford these "inflated" rates any more, what does that really mean? They're still in business, aren't they? They're still getting tens of thousands of sales a month and obviously making a profit, right? Or they wouldn't still be here.

Does it seriously mean these pay per signup sponsors are getting dangerously close to $0 profit per sale, or are they just no longer doubling what they pay us?

I think that given the current economy, trial signups cancel ASAP.

People are finally getting a tad conscious of what rebills on their ccs each month.

Right, the value of surfers is declining. But the people who do rebill obviously make up for the people who cancel. The question I have is how small is their profit margin, because they obviously have one

hmm well it really depends on their part. u have a good niche, and update constantly with quality exclusive content, they will stay.

i had a total of 9 signups.. iknow its a small number but out of 5 signups i get 1-2 cancel after trial.

IMO i would think a sponsor would offer 35 bux if they know how to sell their stuff in the members section... or they have great upsales.

The owner of a large program with many niches told me that 1 out of 4 surfers will stay past the trial period. Whether that has to do with the quality of his sites, I don't know...

There are several "smaller" programs that pay out $30 per, without all the pop-ups, cross-sells, and mailers. Add each of those elements, $35 might not be all that hard.

Did R Kelly piss on someone in the latest vidoes?

The industry really has changed in the last few years - from the dizzying heights of $70 and $100 payouts per signup, to the 'average' of about $35 to $35 now.

We've also seen the decline of free trials, and there's been much debate about whether a paid trial really is better in the long run anyway.

The reason all this is happening is because of declining retentions, higher fraud and higher cancellations on the sponsors behalf. People these days have net banking, and can see a charge show up in hours. Compare this to the old days when you had to wait a month for your paper statement to arrive.

I also think that the general public are much more aware of their rights, and whereas in the old days people would have looked at you with a blank stare if you'd mentioned a "chargeback", most consurmers know they have the right to dispute charges these days.

Moving forward, if this trend continues we're only going to see the furthe decline of payouts until something changes. This is what we have done with Swoit, a system where we believe everybody wins.


At any rate, make the most of these special $50 and $70 per signup days - who knows how much longer they will last!

Everyone seems to be enjoying explaining why members aren't retaining as well as before, but that wasn't my question at all...

$24.95

i couldnt disagree with anyone more. people buy when they are ready to jerk off... so they buy, jerk it, cancel and move on.

Let me try and explain if I can ;-)

Lets do the math on 100 signups.

100 x $2.95 = $295

Lets say 70% cancel within trial (a reasonable average), and of that 30% left, they retain for 2.4 months (another reasonable average for general hardcore) billing at $39.95 per month

30 x $39.95 x 2.4 = $2876.40

Therefore
$295 + $2876.40 = $3171.40

Now presuming you have a premium account with a processor at 10%, you are left with

$3171.40 - 10% = $2854.26

Now lets divide that $2854.26 by the original 100 sign ups

$2854.26 / 100 = $28.54

OMG - What happened there. This cant be right (sarcasm in my voice)

Sponsors pay me $35 per signup?????

The TRUTH is this. Apart from some exceptional programs like MrSkin.com, (which I know has some amazing retentions), most webmaster programs resort to two scams....

Scam 1 - Shave the webmaster

Scam 2 - Rip off the surfer (by hidden upsells, or no cancel buttons etc)

Or a combination of both

The bottom line is this. Find a sponsor with "AUDITABLE" stats, and check their sign up and customer support policies (such as cancel links and upsells)

Then make your decisions from there.

And for all this webmaster programs out there who disagree with me, I am only speaking in generalities about how many webmaster programs operate. I am sure your site is different :Graucho

about tree fiddy.

:1orglaugh :1orglaugh :1orglaugh

The 2.95$ Signup are '' Trails '' If they wont cancel it cost them 40 $ for 1 Month

And they pay you 35$

40+2,95$ = 42,95-35 = 7,95 Profit

And if they stay more month :winkwink:

:1orglaugh :1orglaugh :1orglaugh

:thumbsup Finally someone who's thinking ;)

You are assuming 0/100 trials will chargeback or be refunded? Not sure about that.

But you are forgetting that sponsors have income from other sources such as..

dialer income which can be substantial even for those that pay webmasters a share of this..

upsales to members.. not scams but targeted selling to qualified customers - if you treat them good and give them what they paid for then they are more likely to whip out their cc to buy something else you offer assuming you offer what they want..

reduced rate memberships offered to cancelling members..

spamming their mailing lists..

income generated by sponsors own traffic.. traffic they buy from various sources or even just se listings..

lots of other stuff too no doubt.. it all adds up..

:2 cents:

Why do you see the glass half empty?

Why can't the sponsors make back that 7$ deficit by exit traffic, emailing cancelled members, and premkum feed upsells/toystores on their backend and cross sells?

You may want to add those to your equation and you will see how sponsors can afford to pay out 35$ PPS no problem...

Also please don't forget the people who let their card get charged for years and never charge back.... im still getting 600$ a month from a recurring account i advertised back in 1998 =) Those people are in the mix as well my friends...

merge my post with mark's and you will now have your feet in your mouths as to how profit can be achieved on $35pps payouts.... legit...

I quite agree with you Mark, but in all honesty, I have spoken with and discussed this situation with many webmasters, and generally the shave is on, and the upsells are running hot

My answer is in response to the fact that to make a buck paying a $35 payout to an affiliate, you just cannot do it on rebills alone
Recently I obtained my own merhant account, and I have been scouring my competitors join pages. And in most instances, dialers are not even offered.

So upsells and traffic shuffling is all they are doing on the outset. But on closer examination, they also usually offer their own stats. And it is at this point I start smelling a rat.

My message in the end is this.

Find a sponsor with "AUDITABLE" stats

Geo-targeting :thumbsup

I am coming out with a affiliate program in a month a or so.

If you have UK or international traffic it will rock. I will either page flat rate for each sale or give you like 30 percent of the sale with average sale being arounf $85 -$120 bucks.

Its areal product , and chargebacks will be close to zero except for the one asshole who cries to the cc compnay.

Fuck, for god's sake quit worrying about what sponsors are or are not making. That is their business and your business is your business. That is a nothing but a frustrating waste of your time.

All you need to fixate on is your revenues and bottom line profit.
Figure out with your particular niche can you make more by doing it all yourself or more by a variety of sponsors.

Find programs that meet what your visitors are looking for and you'll make money. You can create your own setup and processing account and you won't have to worry about shaving and the like and can have your own affiliates.

The long term revenues for sponsors come from people who never cancel. That's the gold. Then are the hardcore addicts who can be upsold into additional purchases. That's more gold.
Then there are the databases that can be mined for all sorts of revenue generating streams. That is more gold.

The owners of the major programs out there live very very well, so you're nuts if you think they are losing money paying webmasters $35 a signup.

KRL speaks the truth. Good post

Spend less time worrying about shaving and use that time into generating more revenue

I see a trend that people don't stay with a recurring membership but come back once in a while to catch the updates. For program owners its money right in the pocket.

Joe E. has alway's paid $35.00 per trial membership now w/IceColdCash & before w/Trafficcashgold.............


It is mainly to keep traffic going to the sites and he will make money on the recurring!!!

:thumbsup

Yet more uniformed posts by people who have never run a successful paysite, using bad and misguided math and figures to come to a totally inaccurate conclusion.

It doesn't mean some are not shaving, it doesn't mean that some aren't struggling but it also doesn't mean your data is even close to being accurate.

Upsell revenue from inside the site (and again that's legit upsells) just on it's own can be huge if done properly, that's without other sources of income you've totally overlooked that are mentioned above.

There are far too many factors to take into account that you've totally overlooked. And of course the No1 remains the qualtity of the site which even without the stuff you've left out can change the figures hugely.

Bad sites with crap content, infrequent updates and advertising a niche that they really don't have the content for inside, of course will struggle and have to shave and/or lower payouts. However you're generalising and saying the BS figures apply to every paysite offering $30+ per signup is just plain daft.

And now for a completely different synopsis...

Paysites make a significant portion of their profit from upsells /cross-sells to other sponsor's programs. Now that VISA has come down hard on a couple of the major scamming programs ...(insert Porncash's name here)...and even companies like sexpromote are having to get a little less scummy in their sales approach..sales will go down...

It's a natural progression when consumers are given the opportunity to make informed purchases, instead of being tricked into buying a membership.

So, is this the consumer's fault....nah...just the signs of a corrupt industry self imploding.

Or maybe a sponsor offers legit upsells like, Live chat, sex toys, offers to other sites at a good discount, etc...

Naw that couldn't be, it ruins your whole therory that sponsors must be ripping someone off... That wouldn't be right, sponsors must be shady....(sarcasm in my voice)

I tend to agree with that too. It's finally slowly becomming hard to get away with putting up shit with no decent content, using shady billing to earn money because the content is so bad and still manage to succeed. We're not there yet but it gets closer each week. Long term it can only benefit everyone in this for the long haul and the sooner the better. However, there's still no reason a good site can't make a fairly high averge amount of $'s from each join. Mind you the important word there is good. There's still unfortunately far too much crap about.

Kman, you tell it like it is. :-)

Matter of fact, you launch your new sponsor proggy yet?

D'you really think that a sponsor program would work with 0 profit?
The "big guys" aren't that dumb.

Nah, "sorry, we can't afford to pay 35" means "surfer retention is not as good as before and we need more, so will pay 25, and get 5 bucks more from each sign". :2 cents:

not yet sweety, soon though =)

did i show you the sites yet??

Hey I would like to add something here. If you get SoBeGirl conetn or use a sponsor that uses SoBeGirl content then they will have better retention and more payouts. So ask if your sponsor uses SoBeGirl content ant then you can be safe...

It depends on the site, the traffic and such. Some sites I make more then $35/signup with recurring, some I made like $7 a signup with recurring. I have only had one sponsor pleasantly ask me to stop using them b/c overall they were losing money on me. It really is a thin thin line. The higher the sponsor pays, the more likely they are to suspend accounts that look a tiny bit odd.
ZoiNk

Thats why the smaller players who cant afford to take a chance on the $35 per signup go with recurring. this really forces the paysite to provide content and update more frequently

:1orglaugh
Good morning, thanks for the laugh! :thumbsup

It is trru PooP head.. A lot of the big guys have my content becuase it works for them. I would not have 200 video shoots if it did not make people money in the long and short run. I would have had to stop after like set ten. So Poop, go take a Poop.