Eric Nagel

Eric Nagel

CTO, PHP Programmer, Affiliate Marketer & IT Consultant

Industry Clash: Balancing CPS & CPA Marketing

I have been, or can be if you click on a link and make a purchase, compensated via a cash payment, gift, or something else of value for writing this post. Regardless, I only recommend products or services I use personally and believe will be good for my readers.

After the intro sessions at Affiliate Summit (First Timers Guide and How to Pitch Your Company), the first session I attended was Industry Clash: Balancing CPS & CPA Marketing featuring Ian Fernando (CPA), Jason Rubacky (CPS), Logan Thompson (both) and moderated by Greg Hoffman.

Ian, Jason and Logan talking CPA vs CPS
Ian, Jason and Logan talking CPA vs CPS

Full disclosure: I’m on Greg’s Advisory Board, Jason and I have an ongoing bromance, and Logan, Ian and I have been in a Mastermind Group together previously. I currently have or have previously had some sort of dealing with these guys

The idea behind this panel is that CPS (cost per sale) and CPA (cost per action) affiliates can get along. A few definitions were used, stating CPA affiliates use paid traffic, are paid when a user does an action, and are not interested if the user buys or not. CPS affiliates use search traffic, get a share of the revenue from the transaction, and actually have to sell products. These are gross generalizations, and there are CPA affiliates using SEO, and there are definitely CPS affiliates using paid traffic.

The discussion got into which is easier to generate more revenue, transparency, driving new customers, and some lifestyle differences. Each had pros for their own side.

What Wasn’t Said

Greg Hoffman moderating his panel on CPS & CPA Affiliate Marketing
Greg Hoffman moderating
Ethics were only touched upon, but I think the CPA industry has had a huge problem with unethical programs. A great example are those “free trial” programs, where the user is charged $1.97 and have 2 weeks to cancel, before they’re charged for the next 3 months of product. Oh, and the trial doesn’t arrive until 3 weeks later, and the phone lines are always busy, so they can’t cancel.

PPV was also omitted from the conversation, which I think is a major traffic generator for CPA offers, but prohibited in CPS networks.

Finally, not enough discussion went into the lifestyle differences between CPS and CPA affiliates. A classic example, which I refer to often, is when I was running some CPA offers and first met my AM. He immediately invited me to a strip club and offered to buy me a lap dance. That’s not something a CPS network would offer you. CPA affiliates are typically younger, and take far greater risks in their actions (both in business and in life). CPS affiliates are much more conservative, and will be found at Affiliate Karaoke and not a strip club. (No, I didn’t accept his offer)

Ian ended with, in the end, we’re all marketers. That may be true, and we can get along and talk at conferences, but CPA and CPS affiliates are like you and that relative you talk to at family reunions only because you have a common ancestor. In the outside world, we won’t socialize with each other, and if we passed each other on the street, wouldn’t even say hi.

We don’t have to be enemies, but we don’t have to be friends, either.

Ian’s video from 2010: CPS Affiliates, Why Can’t We Be Friends?

  • Greg Hoffman
    Posted August 31, 2011 3:29 pm 0Likes

    Gross generalizations? Of course they were, I even said that at the onset of the panel, but we had to start the conversation somewhere. I think if we had another hour, we would have been able to roll up our sleeves and dig into the dirt.

    But given the audience beyond the front two rows (where you and our other friends were sitting) I think the panel was a home run as a conversation builder. Since it was on a Sunday morning and it was open to Gold Passes and up, we attracted a lot of newbies. As I walked into the room, a guy stopped me and said, “Hey, can you tell me which session I should attend?” I asked what his role in the industry was. He’s a brand new affiliate looking to learn. So I walked him into our session. At the end of the session, he asked Logan and Ian a ton of questions.

    We were there to educate more than debate. We were fully prepared to talk about ppv and ethics but no one asked the questions. When I looked into the crowd to determine what line of questioning to go with on the panel, I didn’t see enough familiar faces that could have made the debate fiery. All I saw were newbies that were ready to soak up information. A flame war with that audience would have scared them away.

    I think I counted 8 or 9 audience questions during our 60 minute panel. All of them very relevant to learning more about the other side. Unless we do a part 2 in Vegas, I think the panel speaks for itself as the beginning of the debate. But I’m not sure the boys want to get that bloody. We might leave it up to others to continue the conversation.

    So yea, I agree that the session was more vanilla than we originally intended but the feedback we received showed us it was worth the effort.

    • Eric Nagel
      Posted August 31, 2011 3:44 pm 0Likes

      OK, I wasn’t coming in as an educational session, I was looking for a fist fight and a Jerry Springer audience reaction.

      I think you asked a question that nobody else is willing to ask, but the question will never be fully answered.

      • Greg Hoffman
        Posted August 31, 2011 3:49 pm 0Likes

        I felt it was a good read on the audience. If any of the old ABestWeb members were in the crowd, I would have opened up Pandora’s Box.

  • Logan Thompson
    Posted August 31, 2011 4:40 pm 0Likes

    “In the outside world, we won’t socialize with each other, and if we passed each other on the street, wouldn’t even say hi.”

    Ouch, I’d at least give you a head nod if I saw you walking the streets of Buffalo.

  • Ian Fernando
    Posted September 1, 2011 9:20 am 0Likes

    damn… I guess we dont have to go to the buffalo wings place anymore… sighs…

    in any case for ethics… 1$ trials are important to get a business going. it is the advertiser that has the ethics issue, we as affiliates are just pushing a product. though it does fall on the affiliate as well deciding if they continue to push the product after knowing how the backend system works… that is where the issue falls.

    trial systems are and have been in the industry a long time. can we say that 1.99 trials are different from free trials? it is to get the audience interested enough to try out their product. what difference is there when it comes to trial software vs weight loss?

    it is just comes from a fulfillment standpoint.

    the audience was more opened to the conversation than I expected. so it might have been worth it to discuss other forms of cpa vs cps…

    and strip clubs are entertaining.

  • Finch
    Posted September 1, 2011 9:38 am 0Likes

    I work with both.

    Personally I’ve found that CPS is more sustainable, while CPA is definitely more scaleable. I don’t fit in to the stereotypical young marketer image with chains hanging down to my ankles, but I definitely see where you’re coming from with that observation.

    I think the reason CPA is so popular with a younger crowd – the ‘new generation’ of marketers – is because it cuts out so much of the patience and sleepless nights that you need to build a system that actually sells. I had my first CPA conversion in the space of a few hours, but my first actual sale took several months.

    CPA definitely attracts more controversy, and rightly so, but CPS marketers hardly have a squeaky clean reputation either. They’re just as guilty of reviewing products that they haven’t touched in their lives, and of grossly exaggerating the true worth of a product.

    It’s pick your poison really. Where commission is involved, trust is hard to find.

  • Mike Chiasson
    Posted September 1, 2011 10:21 am 0Likes

    I can’t figure out why everyone picks on the trial offers. They are 100% legit as long as people read the terms. No one gets mad at Netflix free trials or World of Warcraft?!? Some of those ‘legit’ trials target children and no one complains? Like Ian said, we are all marketers.

  • Trackback: Top Picks in Affiliate Marketing and Program Management, August 2011 « Affiliate Marketing Blog by Geno Prussakov
Leave A Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.