All the Affiliate Programs have Gone
 

So, building the model directory that I am launching this fall, I went through my model affiliate programs. I had not touched this folder since Dec 2010, out of 313 sites, 78 have gone offline or the domains are parked. WTF?!? :disgust

The Times They Are A-Changin :)

I'm still here!!! www.POVCash.com

Yep it happens. It's not the old days of the industry, the older a business model is, the harder it is to make money.

The percent of mainstream businesses that fail is very high also. This is not really big news. But yeah, it's reminder that you have to run it like a business and invest much more money into it than you once did.

yes indeed, it is a very serious reminder. :thumbsup

dating is doing great!

There you go. Mainstream businesses are being slammed too. Brick and mortal businesses in my home town and shutting down left and right still. They started to build a Sonic here, and when it was half way built they tore it down.

I have an idea on the subject. The affiliate program CRASHED, just like the markets did in '08.

Consider this:

Back in the day, programs were making money by offering 5% and 10% commissions to affiliates. Consumers were hungry and online porn was new. Things were good.

But then programmers owners started competing for affiliates, and affiliates sought out higher payouts. Commissions began to rise.

Affiliates then demanded more tools along with higher payouts. Program owners took on greater and greater costs by paying out higher and higher commissions while simultaneously spending more and more on programmers creating new tools, photographers and models creating new content, etc. Then of course affiliates demanded even more such as >50% Rev Share, putting a serious strain on some companies and crushing others. How do small companies compete?

In effect, the cost of affiliate support soon became so expensive that programs weren't making enough money anymore. This, plus the ever expanding amount of free content hit some people by surprise. Not knowing how to adapt or not realizing what was happening before it was too late, they went out of business.

We ourselves closed our own affiliate programs twice (once in 2006, then again after a second try in 2010). We never did crazy business with affiliates, but we did some, and it was my accountant that alerted me to the problem years ago. She setup our books so that everything was a separate account. For example, Telephone, Electricity, salaries, etc. Under advertising and marketing, she listed various forms of advertising as separate accounts including PPC, Affiliate commissions and Affiliate Support.

When asking her how we were doing one day, she ran a spreadsheet and showed me that Affiliates were were almost 70% or our total advertising budget even though we were only paying out 30% at the time.

Of course, the affiliate business model works for many, but if anyone reading this is struggling with their sites despite having good traffic and paying customers, do the math - you might be spending more than you think.

Good post Mark.

when you say back in the day are you speaking of the 1800s?

cuz back in the 90's programs like Gamma and Hpic were paying 30 bucks a pop pps, i dont think i ever used an affiliate program which paid 5 or 10%, even Pecash was at 25 - 35% depending so...no i think your theory is wrong.

It is true that later aff programs started spiking to 40, 50...100 bucks a pop to compete and of course added more pricey sales widgets etc.

As a matter of fact, considering that most pps nowadays is STILL 30 to 40 bucks, affiliates and program owners are making far less if you adjust for cost of living from 1997 to 2011.

I'm seeing the opposite here in Vegas. Back in 2008 and 2009 it was starting to look like everything here was shutting down.
The town was empty and businesses were closing all around out here off the strip where people actually live and work.

But for the last 6 months I'm noticing the casino's are slammed (you should have seen Fremont St. last night...I've never seen all the casinos and the street that packed since I moved here).

And out here in the "real" world of Vegas I've seen 4 new restaurants open up in my little area over the last few months and fewer empty spots in the strip malls where businesses had closed.

Also down the street from me there were a bunch of car dealerships. About half of them closed down in 2009 and were empty. Now they are all open again and a brand new Chrysler dealership was built and a brand new Volkswagen dealership's building is being constructed and should be finished in a week or two.

Also a brand new Brewery/restaurant is being constructed.

That is all within a mile of where I live.

I see similar signs of revival also as I drive around the rest of Vegas.

How about y'all? Are any of you seeing any kind of resurgence in your home towns?

yep, and most of the biggest sponsors have sold their programs. There are only a small handful of good sponsors left.

I'm noticing the same thing in Small Town, Indiana and metro Phoenix, Arizona. I don't think disposable income is at the level it was at 3 years ago, or most probably people are clinging tighter to any surplus cash they have. Overall (the big picture) that's a good thing.

naaa see sig

Wow Rochard, thats crazy brother. :Oh crap

I'm in Denver right now, there is new shit going up, yes. We are better off than most of the country. One of the reasons I left Los Angeles, at least for now. Just too expensive there. Whereas in Denver, I can be self employed and just put my energy into my sites. I had no objections to getting a job to supplement in La la land, but there were simply none to be had. I will return to L.A. someday though. Fuck, I love the women there... the vibe, pretty much everything about the city of angels.

Downside, the women here are dumb for the most part and Denver is the only city I've ever lived in where I would get drama from a flatchested fat chick. As far as kink, I would have better luck in Tulsa, honestly. I will rarely even book models here. I'd rather travel and not have to deal with the stupidity. And as a fetishist, a metro area of 5 million people and not even ONE fetish club. Um, yeah, you can tell how everyone fucks around here. You can always tell how fun a city is by it's underbelly and Denver has none... but I digress.

No comment.

I digress.

LOLOLOLOL


Sabby:)

I was talking late 90's / early to mid 2k's. And I said %, not $, but thats ok I know what you mean.

Yes... in fact everything feels like it's getting better... Sales have been slowly getting better for us each month and so far, this May has been our best month in over 2 years.

Here in Montreal, the restaurants are packed, cranes are going up, there's no vacancy in the malls, and office space is starting to fill up again. I like where it's all going.

Hi...
We're brand new and with a small number of affiliates we are getting nice conversions...
I agree with everyone though....everything is in flux and changing.

We work hard ourselves to get new members and we work with affiliates too...

Membership site models are changing and we are rolling with that too. We offer many perks for members and try to give them reasons to stay...

We're an amateur model site, exclusive content, softcore and hardcore with girls from more than 24 countries and counting. Give us a shot.
Kam

http://www.SDACash.com is here

<--------- Here

How to kill an industry 101.

The problem goes deeper than the initial $$ cost. The main function of affiliates was to give away free porn. Today that free porn is easier to get than paid porn and in many ways better for the pron consumer than paid porn.

The cost of all this "marketing" was met often by the money spent on content. Getting new members was costing 50% or more of some companies turn over.

10% or less was being spent on keeping them happy and as members.

VIPPay.com is here :thumbsup

That could possibly be a sign of improvement in the local economy...Maybe now you'll get a Fuddruckers. :food-smil02

Most people don't seem to realize that the root of recession is 'recess, not 'recede'. The general economy, and especially adult, are in various stages of what is essentially a recess. IE, a time to take a break and absorb growth. Just like kids take recess break at school to absorb what they just learned in class.

Nice. How's the job market ? I'm thinking about moving there in August. Great city.

This is why all affiliates should set up all their sites so they can add and remove a programs across the board with one click :2 cents:

Or go mobile! :)