Posted Oct 20th, 2014 10:45 AM by Stewart Tongue
This article originally ran in the October 2014 issue of AVN magazine.
Many years ago there were paysite owners and affiliates, living in harmony and working together for the mutual benefit of both entities. At least that’s how the nostalgic fairytale is often told by old-timers who look back fondly on bigger paychecks during days now long gone. The deeper reality is that the affiliate relationship served an important purpose at that time, with many professional affiliates creating massive amounts of traffic to feed paysites that were free to focus on other business necessities like content creation, customer service and retention. However, with a steady stream of outside factors evolving the business model and a whole lot of internal pressure caused by affiliate blowups, many site owners are taking their products and services private.
In some cases they are completely private and rely entirely on in-house traffic with the added benefit of avoiding copycats. In other instances they become invite-only programs that retain most of their traffic without most of their affiliate headaches. We asked some well-known program owners and longtime affiliates for their point of view on this important topic, because it is quickly changing the entire adult online business paradigm.
There are many program owners who were willing to explain why they went private as long as nothing would be printed about who they are, what domains they own or anything else that might lead to retribution from what one referred to as “butt-hurt webmasters who asked for more than they are worth.” The consensus among this faceless group comes down to a long list of incidents when affiliates would complain publicly or attack their brands privately while providing little or no revenue. “I can’t even count the times someone would post stupid stuff on GFY about me or my program that wasn’t even true, and then I’d see they had sent me less than 100 clicks in a month and less than 1 sale in the last year,” said one now-private site owner.
Of course, not all affiliates are more trouble than they are worth to a program. Some “whales” generate hundreds or thousands of sales per month for affiliate programs … but it is true that nobody sees them flaming program owners on message boards as a method of getting what they want. That’s why some programs are developing partially private programs.
“Instead of taking a program entirely private let's consider some of the main reasons behind doing so,” said C.R. Brown, aka Kroy, owner of Kroycom. “Applying the 80/20 rule most program owners find that a small percentage of all affiliates are responsible for the vast majority of affiliate-generated sales and rebills. Naturally this means most of their focus and attention should be spent on those kinds of affiliates. So taking an affiliate program private usually is done for the purpose of making sure highly productive affiliates get the attention and resources they deserve, while weeding out hobbyists and surfers who sometimes take up a lot of time but don't reciprocate with corresponding business. Further, some program owners find that an entirely private or invite-only program may lend it an aura of exclusivity—but this may come at a price. Affiliates with high traffic tend to be busy and don't like to wait around for approvals or invites. They see your site, they want to promote it NOW. So let them. By the time a "private" program gets around to reviewing and approving him, your potential whale may have moved on to your competitor. So instead of taking a program entirely private, many should consider offering priority support and custom tools to high-traffic affiliates, but keep signups open for affiliates of all sizes.”
“A lot of companies are taking traditional streams of affiliate marketing in house and we have as well,” said Magalie Rheault, FameDollars director. “For the last four years we’ve begun managing our own tube site channels, being more aggressive with media buying, testing new landers to optimize affiliate traffic, and doing our own e-mail marketing. Affiliates are still a strong part of our sales pie; however, we’re relying a bit less on them, like we did back in the day. This gives us way more tangible business intelligence that we can use and implement on a day-to-day basis, though that’s not exclusively why we’re doing it. A desire to build more knowledge on their own and have more direct control over their product has a lot to do with it as well.”
Still, whether a program is completely public or partially public it has much more to deal with in terms of branding and reputation management than a completely private program would ever need to navigate. One program that has repeatedly been targeted recently by affiliate angst on message boards is ReallyUsefulCash.com, a program owned by one of the founders of YouPorn. which now produces its own content and uses years of data analysis to find sweet spots in the marketplace.
“ReallyUsefulCash.com is not affiliate friendly and I do not hide this fact. I did not want to have an open affiliate program, but against my better judgment I did, indeed, make it an open program. That is where I went wrong,” said JT of Really Useful Cash. “No one likes reading threads on GFY about their programs by someone insinuating all kinds of outlandish behavior just because he lost 0.2 percent of a sale due to a CCBill error.”
JT explained, “If you do not like what I do, stop sending me your traffic. Send it to someone else. Will you make more money? I don't know that answer, but until you switch it, neither do you. Of course everyone has a right to bring issues to everyone’s attention. I have no problem with that at all, and I would do the same thing if I was a traditional affiliate, but you are in control of your own traffic, just as I am in control of my own. I send traffic to other sites. I look at the $/click ratio I get on that traffic. I often do not even visit the site where I am sending traffic, other than making sure it’s a good fit with my traffic initially. I do not care if they have traffic leaks on their tours, I do not care if I do not get a percentage of a cross-sale, or members area up-sells. I do not care if I get a percentage of the mailer revenue they are gaining from my traffic. What I DO care about is the money I make on my traffic and I switch accordingly if things are not right, and that’s what I believe everyone should do.”
JT added, “In excess of 70 percent of my traffic is attributed to the tubes, less than 10 percent with standard affiliates. That is why I do everything for the tubes, and I do nothing for the standard affiliate.”
Anyone looking at the landscape of the adult online industry will notice that these arrangements are becoming much more common. “Look at the cash programs in this industry. How many programs this year have let their affiliate managers go? I know of quite a few, mine included. ... More and more sites are taking their cash programs private. There are threads on GFY about cash programs terminating affiliate accounts where there is no viable reason to have them active. Granted, some affiliates are golden. I have two such affiliates that I pay out over $60k each month, and their numbers are growing. They have almost zero contact with anyone at Really Useful. They build their own tools and need zero support from us. Now look at the other end of the spectrum. My old affiliate manager used to spend 90 percent of his time speaking to standard affiliates, getting my team to build bespoke tools for them, and getting virtually zero uplift in sales. Add in the problems of affiliate fraud and it becomes easy to see why so many program owners are shifting their sites away from the idea that more affiliates is somehow better.”
From the professional affiliate point of view, overlooking the distractions and seeing the larger picture is important. "I think it makes a lot of sense for some programs to go private, if it fits their needs," said Rick of TheBestPorn.com. "As a long-time affiliate, we respect your right to do whatever is best for your company legally. There’s no rule that states otherwise, even though some act like there is a set of unwritten rules, and every industry pivots as needed because nothing ever stays exactly the same. I do think one of the major issues discussed here is more about the overall relationship that is born the moment a company accepts a new affiliate. Too many companies put little to no resources into providing the level of support that’s required for a traditional affiliate to succeed. People scream when they’re not heard, which could also be avoided if the companies that aren’t properly set up to listen would simply not accept affiliates in the first place."
Other longstanding high-volume affiliates have also noted a change in the dynamic as well—partly from a lack of pre-screening, and even more so from an increase in the level of anger adult industry message boards now seem to harbor. “I can tell you, after 18 years of this, you are far more likely to have an affiliate work extra for you by engaging them personally and treating them with respect. It's not always about money,” Rick explained. “But in this way, affiliates will treat you with respect in return and approach you directly if they notice an issue whereas when a lack of respect or lack of trust creeps in, they are far more likely to run to public boards first. However, not everyone in the affiliate business is a professional, on either side of the aisle. Thus, that pre-screening process plays a part in this as well. Running to boards has never been my style, but I've certainly witnessed it, and it is almost always a direct result of trust issues, confidence issues, or a lack of respect. Affiliates go to each other when they feel they cannot get the attention or respect of the programs they represent and then the boards themselves do nothing to positively affect any outcome. They just pour more fuel on the fire and create further resentment.”
Looking back over the entire history of affiliate marketing online, it’s hard to overstate the importance of Wasteland.com and owner Colin Rowntree, who many may recall was the first site owner ever to process adult sales through CCBill. During the affiliate heyday, Wasteland had multiple affiliate managers and a “more are always welcome” approach to webmaster leads. Now times have changed, and while the SpiceCash program does still accept new affiliates, they are highly vetted and accepted on a case-by-case basis.
“I am very much in favor of making our affiliate program ‘semi-private’ but will always retain my current affiliates and take on new ones that have the experience and ‘industry legs’ to actually drive traffic,” Rowntree said. “The thing that we have done is to focus more on providing exclusive and custom marketing content for qualified affiliates. We’ve seen a marked shift in where affiliates can effectively market programs, going from the traditional ‘plug and pray’ automated feeds, which can’t keep up with the tubes’ sheer volume, more now toward manual social media posting of photos, short trailers and animated gifs on such venues as Twitter, Tumblr, Pinterest and the like. This sort of content is also useful for affiliates that have re-invented the blogosphere and have found ways to get quality traffic to their sites from other bloggers and their social media feeds.”
“Since day one of the affiliate model, programs have reached out to small, novice affiliates to provide them with the content and tools to develop marketing campaigns,” Rowntree continued. “At this point in time, things have very much changed. There are far fewer venues for folks new to the affiliate market to gain traction in traffic and send visitors for revshare or PPS programs. Google has pretty much shut out most opportunities for affiliate blogs, lists, and other free sites as they penalize ‘links to a known affiliate program’ in a massive way. The same goes for Bing, and most other sources of search traffic that affiliates traditionally used. On top of that, most major tubes will not allow for any affiliate uploads, as most programs are already Studio Content Partners, effectively cutting legal uploaders out of the process. However, I am always open to talking to folks entering the industry, and veterans that have an interesting idea of how to push their traffic through our program for payment. The affiliate program model is certainly not dead; however, it has changed quite a bit.”
Save the Whales
12clicks may have been the first person to suggest the standard affiliate model was nearing an end. From his point of view the most serious wounds are the self-inflicted ones. “In my opinion, affiliates pushed us to where we are today,” 12clicks said. “Back in 1998, you didn't bother programs and ask for anything but banners. You bought your own content and fended for yourself. Learning to drive traffic on your own, but most of it was teaser, with the promise of the payoff inside a members area. Then TGPs (who were merely jumped-up affiliates) started demanding better and better content—and the idea of giving it away for free was born. At the same time, owning a program became easier and everyone and his brother had one. This created the race for gathering affiliates, further eroding the model by causing many to overpay for joins while giving more away for free. Suddenly, affiliates thought they were in control and made ridiculous demands. The end game (for now) are the tubes, where you're giving EVERYTHING away. It doesn't take affiliates to give things away; programs can do it themselves. Bye-bye, affiliates. You've cut your own throats. And frankly, outside of the whales we deal with that are more like partners, good riddance.”
Affiliate programs are always looking for more sales, and professional affiliates who are generating a good amount of sales do still get a lot of leeway. Program owners also still go the extra mile to assist the ones they know have potential, by looking at their ratios and engaging in private talks with those who give suggestions or create things that help a program prosper. However, that also leaves a large and growing segment of webmaster society that is quickly becoming disenfranchised because the cost of servicing their needs is accelerating while the revenue they generate in return is dwindling. According to many program owners contacted to participate in this article, the “two sale per month crowd” is dying off, and they are accelerating their own demise by intentionally pissing off the shrinking number of program owners who are still willing to work with them today.
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