Scott Rabinowitz - The Coming Shift Away From Affiliates
 

http://www.sin20.com/node/6267

:thumbsup:thumbsup

this is what kimmykim was saying 5 years ago, we are living in a very interesting time right now, i think with the pps price points presumably plateuing/decreasing, this may happen.

AKA leveling the playing field, market correction or adjusting to the excess, etc..

I was speaking to this exact point on another board and very few agreed.
I think we are in for a bog shift in 2009, hold on to your hats.

When you circle jerk surfers with cross sales across 500+ sites you've bought up in different programs, you don't need affiliates. Especially if you're looking to suck one last drop of blood out of adult, before bailing and leaving the rest of the industry to pay for your mess.

It's two different customer groups. The programs dont have access to the traffic in all the small networks, so they cant skip the affiliates completely.

But the trends in the last few years is not hard to miss; Prepaid adspots cutting out the middleman - JUST like in any other business model.

When you want your content and brand out there, you cant compete with 10000 webmasters willing to work for weeks just to make one $39 sale.

Been hearing this as long as internet adult has been around. One day, when it comes true there will be dozens of "prophets" who can take credit for it.

So dump your affiliates and let Scott Rabinowitz's Agency help you organize and manage your ad networks because he is on the cutting edge of technology ... got it.

:1orglaugh:1orglaugh:1orglaugh

he probably run few tubes :)

isn't everything just spam these days? :1orglaugh

it isnt going anywhere.....maybe some bigtime programs have the setup and are able to drive traffic themelves...but the smaller guys will always love affiliates.

and since...super whales..can make a program...i think there is plenty of joins coming to smaller programs soon

What a dumb statement. They will always have affiliates. Hasn't it been known the more internal traffic you have the better?

spoken right out of his ass

I know some major brand name "affiliate programs" that only get ~20% of their traffic from affiliates today, despite having gotten ~100% from those sources just a few years ago.

Issues of declining profitability and increasing liability make affiliates unattractive for many reasons ? and while you'll likely always see some "affiliate" relationships (commissioned salespeople aren't going away), the days of legitimate "come one, come all" open programs seem limited indeed.

It IS going some place and that place is called Change. Things are going to change, at the rate of things now, if they dont, we will implode. The change will most likely not be as drastic as you might expect.

Your point is well taken....but what if a "prophet" but a time line on it???

"In four to six years, people are going to see that affiliate programs are not profitable anymore,? said Morgan. ?Large programs are going to circumvent the affiliates in order to get traffic. They are going to drop the middle man between the big programs and the surfer.?

--xBiz Sunday, November 21, 2004

http://www.xbiz.com/news/news_piece.php?id=6202


--T

the link is 404

Quoted for truth... I remember you making these statements at one of my State of the Industry seminars back around the same time at Webmaster Access LA.

With the above said, I still think that smaller programs will rely on Affiliates and there will still be opportunities for affiliates who want to work hard and make cash. It just will no longer be the free for all and the wild west.

Affiliates work on "no cure no pay" basis which is perfect. No risk for the program.
Advertising could be profitable but there are never any guarantees in ROI. Some programs may benefit well from advertising next to using an affiliate business model. Extra advertising is also branding next to affiliate sales. And advertising gets the affiliate attention/webmaster exposure. So affiliates might join a program from there also.

So I don't see the affiliate model disappearing, it might even grow bigger IMHO.
I think both ways will just co-exist next to each other.

I hope for my sake that your estimate is closer to the 6 year mark ;)
WG

I think a lot of people see the big players and assume they're the be all and end all... There will always be a lot of people happy to run their sites and make $10-30k/mo, either as affiliates or small paysite owners, who are not really affected by the big trends and stuff.

True dat.

I agree with you here, but what I am thinking is that some of the big programs may keep a select few "whales" (i.e. Wired Guy) they may even take them on in the role of "Outside Sales Rep" and the smaller programs might be able to keep some similance of a rev-share program going but the days of "Send me your traffic and I will pay you $10000000 per join" are coming to an end.

Of course, as I always say, this is simply my honest opinion....I could be wrong.


--T

heard it all before.. quality exclusive content.. small/medium programs will flourish. Gotta love a shakedown though. Its the change in action and it offer many new opportunities for those of us that see the glass half full.

:thumbsup:thumbsup

Totally agree in the terms of small pay site owner...I have always thought that this was the cash cow of this business. I cant tell you the number of sites that I host that are simply a husband/wife or boyfriend/girlfriend and they are the owners, content, producer, webmaster, office manager, and janitor of their company.....and many of them are knocking down $200k or more per year. They aren't going anywhere....what will be gone is the affiliates who are making $50k per year submitting TGPs and redirecting the traffic to programs.

See above for my disclaimer about "opinions" ;)


--T

:2 cents:

I think its all the free Hardcore porn on the net.. The new Generation knows how to get it free:2 cents: I have been saying this for years. We need to clean up all the free hardcore porn on the net so they have to pay for something.

free tits and the rest should be censored. pay for pink:2 cents:

porn buyers are so well trained on how, when, why, and for how much, that I see little change anytime soon. Any so-called new age of porn is always a trend and right back to the basic system. I don't see the pricepoint changing, I don't see the importance of super-affiliates changing , and I don't see the affiliate model changing unless a dynamic new media enters the world. As long as porn sites are delivered over the web in the form of vids and pics, I can't see it changing much. This media has evolved to it's point and is just waiting for the next medium to come along, the way the internet replaced video/dvd rental.

For example, if Direct to brainwave VR or some new holographic porn comes about requiring a certain location based transmitter, then adult shops will be the distribution method and the net will become secondary...until then I don't see much changing. :2 cents:

I will say that as phones get bigger screens and become the main way people surf for information, the mobile web networks may gain more ground and people may browse through their personal devices stumbling upon porn for purchase and then bluetooth to a large screen or something...but the system is still very similar and the affiliate model would still probably hold true.

I do also see the connection between web and DVR becoming more relevant, the ability to move that content to a bigger screen to watch may be appealing but again, the affiliate systems seems to cover it as far as the marketing methods.

Just some food for thought.

I think a lot of people waste a lot of time worrying when they should be making money.

How would you like to clean up the free hardcore porn on the net?
WG

webmasters or sponsors shouldnt buy traffic from free hardcore sites till they start censoring or not showing pussy. I bet sales would sky rocket.

someone has to force it. and sponsors shouldnt give away anymore hardcore content free

As long as I have traffic, there will be sponsors who want it.

You couldnt convince me otherwise.

I think some people have a tendency to confuse volume and profit, as if they were the same thing.

Way back when in audiotext, the joke went like this...
"so what are you losing a minute?"
"I don't know but I'm making it up on volume."

I think a lot of the affiliate model in adult is broken because they forgot the general rule in business you cant give a commission greater than the price of the product. Any kind of stumble in the road and it will catch up with you. You look at legitimate mainstream internet companies and the commissions are much more realistic numbers.
Also as a tool to beat the competition it becomes very counterproductive after awhile.It becomes an auction that the highest bidder actually loses in the long run.

affiliates will stay around as long as they are willing to accept what programs are willing to pay..

once the DOJ spanks some of these companies engaged in cc fraud and questionable billing practices, the affiliates are going to find out that you cant pay high pps without cross sales or straight up fraud..

i think the perfect storm has arrived and lots of things are going to be changing in the neext 12-18 months..

werd....

I can't see a coalition of sponsors doing that at all.
WG

me either... but Roger makes a good point. The proliferation of free hardcore porn isn't good for sales. How to stop it? well that's more or less an irrelevant discussion... ridding the Internet of high quality free hardcore porn is an exercise in futility.

My only suggestion is to get the FBI to do 2257 inspections on free site owners, which also seems futile in the long run.
WG

bump for a great biz thread....

I am enormously entertained by the number of people on this board who refer to the death of affiliates in the same breath as the enormous scammy PPS payouts.

There was a huge wave of bad credit card billing that was just going away when I entered the business in 2002. Now, it's back. It will soon be going away again. And the get-rich-quick artists who chased those $100+ payouts will, indeed, go the way of the dinosaurs, if they don't change their methods.

But the basic model of paying affiliates a share of revenue for referred customers? I don't think that will go away until people stop buying porn over the web -- which could indeed happen, but probably not in 2009 or even 2010.

I do sometimes hear from program owners who think they don't need affiliates or our traffic. OK fine. But, for every one of those, I hear from dozens who want me to join their affiliate program. And as for cutting out the middleman? My standard polite decline to join a program is to offer some ad space for sale; and the response I usually get is like they are the vampire and I'm the garlic. They don't WANT to cut out the middleman and keep all the profit; what they want is to shuffle all the risk off onto their affiliates, so they don't need to worry about ROI.

Until they start offering to buy adspace instead of soliciting me to join their programs, I don't see "the death of the affiliates" as a big worry.

People should remember that there are plenty of programs out there able to pay $40+ per join without using shady billing tactics as well :2 cents:

By making it internationally illegal to distribute hardcore pornography on the internet, without the surfer PROVING they are 18 years old....with a credit card. :2 cents:

Many programs that understand the value of establishing a strong brand identity have learned that affiliates spread there brand awareness faster and cheaper than they could alone. But for the future... I really think bad conversions over the coming year will thin the herd of affiliates.

I can see why people would think that the current CPA model that programs and affiliates have would change, but it won't eliminate affiliates. I think people try and turn the word affiliate into something it is not.

Affiliates are publishers, plain and simple. They have traffic and programs are paying for it. The current setup uses a CPA mode. In other industries we see CPC or CPM models for purchasing advertising. All programs are doing is purchasing advertising from a publisher because it makes them money.

Programs will never stop buying advertising. Sure they might create their own, but they will always be willing to buy advertising if the price is right. I think we'll see a shift away from the CPA model that is currently dominating the adult industry. I think we'll see more monthly ad buys or CPM based advertising.

I guess what I'm saying is that as long as someone has quality traffic that can make money, someone will buy it. As long as an affiliate/publisher/whatever you want to call them can obtain that traffic, they will be around.

I can't ever imagine a whale or bunch of them without a place to send their signups.

If you are a whale or know of one who is or ever has this problem, please send them to me. I've been saving whales since days of underoos.



http://www.unknownwriter.com/pictures/Whale.jpg

Not got time to read it all but have one comment to make.

If your business model is to fill a small site with "exclusive" content that's the same as every other exclusive site in it's niche and style. Then spend a fortune driving traffic to it. Today you are very likely to fail or if doing it slowing down. Simply because the members who want to buy this type of content are spoiled for choice and can get it for free.

If you have a site with unique content then you have a chance of converting those who want it and keeping them. The problem is producing unique, quality porn is not easy and it costs more. But when produced the devotees will come looking for it. Or one Tube video will make the guys who like this type of content come over to see if you have more.

The the need for affiliates is reduced.

There are other approaches which I'm sure have been mentioned.

The deciding factor will be the costs of the traffic and the return on that traffic costs. Driving people to the door is not the full solution.

that's totally unfeasible.