Why large media buying teams reject 90% of offers on the market
The affiliate marketing market has passed the point of no return. The era when it was possible to generate traffic «on the fly» and reap super profits is now a thing of the past. Today, the CPA market is a tough B2B environment where the cost of choosing the wrong partner can run into tens of thousands of dollars.
The number of affiliate networks and direct advertisers is growing, but expertise and technical capabilities do not always keep pace with market expansion. Attractive booths at conferences and large-scale networking remain an important part of the industry, but they are no longer a decisive factor for professional teams when choosing a partner.
We conducted a detailed analysis of the processes to break down the mechanics of choosing a partner. This article provides an analysis of the requirements of top teams, an analysis of economic pitfalls and markers that kill cooperation at the negotiation stage.
Technical and operational hygiene
The initial contact with a partner network is a test of the maturity of a company's business processes. For a large team, time is the most valuable resource. If difficulties arise during the onboarding stage, this is a signal for us: perhaps the partner will not be able to process our traffic efficiently and ensure uninterrupted operation.
We identify three critical «hygiene» factors that we pay attention to first:
In arbitration, speed is everything. If a manager takes a long time to respond during working hours, this is a sign of poorly organized processes. We are not prepared to spend days just to get access to an offer.
Professional buying works with data, not intuition. It is critically important for us to see the details of the funnel. If there is no end-to-end analytics in the personal account, it is difficult to build effective cooperation.
Optimizing advertising campaigns blindly, relying solely on the final approval figure, is a risk of wasting your budget. We need a partner who provides data.
3. UX/UI and ease of integration
If the platform's interface is outdated and finding the right landing page or configuration becomes a quest, it's a sign that the company isn't investing enough in its platform. A partner's technical backwardness is a risk of losing traffic.
We have also singled out the reputation factor. In the narrow B2B segment, reputation is currency. Before launching traffic, we audit our potential partner: we monitor specialized chats, closed forums, and request feedback from colleagues in the industry. We are skeptical of the thesis that «bad reputation is the work of competitors». As a rule, if the market is talking about problems with payments or holds on a massive scale, there are reasons for this.
The high rate trap
One of the signs of an inexperienced arbitrageur is chasing excessively high rates at the expense of conversion and stability. Beginners often focus on the payout figure, ignoring the funnel as a whole.
Many affiliate programs use higher rates as a marketing tool. But you can't cheat math: if the rate is significantly higher than the market rate, it is often offset by stricter lead scoring or lower approval rates on the part of the advertiser.
We always choose a stable average market with a guaranteed conversion. Predictable ROI and long-term play are important to us. We build financial models months in advance, and predictability is important to us, not a one-time lucky break on an offer.
How we identify sheaves
Discrepancies in statistics (sheaves) remain one of the «ailments» of the market. However, large teams have long developed security and data reconciliation protocols.
How do we know that statistics may be incorrect?
1. Comparative analysis (benchmarking)
We have sufficient resources to run split tests. We take the same offer (or identical products) in different networks and feed them traffic from a single source, using the same creatives. If in PP «A» the conversion rate from click to registration or from registration to deposit is 10%, and in PP “B” with the same inputs it is 2%, this raises questions. The difference in statistics on large numbers cannot be a coincidence.
The test volume shows perfect approval rates to motivate the team to increase volume. As soon as we start scaling the flow, the indicators drop sharply for no objective reason.
For us, any unexplained manipulation of statistics is a reason to stop traffic. Trust is a key resource in this business.
Direct advertiser vs. Resale
In our strategy, priority is always given to direct advertisers. Working through intermediaries carries additional risks, which we try to minimize.
Why is a direct advertiser more profitable?
- Speed of communication. This is a critical factor. Working through resale carries the risk of «broken telephone». By the time the PP manager requests information from the advertiser and the advertiser responds, the auction may have changed. Direct contact allows you to receive feedback on traffic quality here and now.
- Marginality. There are no unnecessary links in the chain. This allows us to obtain more flexible terms for rates and caps.
- Exclusivity. Direct advertisers provide faster access to new products and private GEOs.
When are we ready to work with resale? There are two scenarios:
- Unique exclusivity. The affiliate has an offer that is physically unavailable anywhere else on the market.
- Volume aggregation. Due to the huge traffic volumes, the affiliate has negotiated terms with the advertiser that are mathematically more profitable than what we can get directly at this stage.
Why we don't buy into «free services»
Competition for webmasters is forcing affiliate networks to expand their range of services. Many offer free anti-detection browsers, payment solutions, and applications.
For solo arbitrageurs and small teams, this is a compelling argument that allows them to save on working capital. But for a holding company like LuckyTeam, this is not a decisive factor.
We have built our own powerful infrastructure: our own farming, application development, and financial support departments. We do not need «bonuses» as the basis for cooperation. Free access to the service will never make us pour money into an offer with poor economics. It is a nice addition, but the foundation of partnership is profit and reliability.
The evolution of the affiliate manager
The role of the affiliate network manager has undergone a radical transformation. We no longer need simple «support» whose functionality is limited to providing links.
Who do we consider to be an effective manager? A full-fledged business partner.
- They are deeply immersed in the context of our traffic sources.
- They see the whole picture of the market.
- They are proactive: they don't wait for requests, but come up with analytics: «Guys, this offer is currently converting for your type of traffic in this GEO. We have statistics, let's test it».
- A formal approach. Responses such as “Everything works for other partners” instead of trying to understand the logs and postbacks.
- Long responses. In arbitrage, the situation changes hourly. Responsiveness is the key to success.
- Financial opacity. Evasiveness when it comes to direct answers about payment terms or regular «technical issues» are considered by us to be financial risks on the part of the partner.
Message to the market
The affiliate marketing market has matured. The era of simple solutions is over. Large media buying teams have turned into systematic IT companies. We have learned to calculate unit economics, conduct in-depth partner scoring, and demand a high level of service.
Affiliate network owners and advertisers should focus on the long game. Reputational risks are more costly today than the dollars saved in the moment. A reliable partnership with LTV over several years is more profitable for all market participants than trying to maximize profits «here and now».
If you are tired of market opacity and constant blind testing and want to work in an environment where you don't have to worry about payments and partner integrity:
At LuckyTeam, we have created an infrastructure that protects buyers from «external turbulence». We take on all the risks of communicating with advertisers, working only with trusted direct partners on the best market terms. You deal with traffic — we deal with everything else.
Leave a request in our job bot and join the team.