Partner marketing is one of the most competitive fields in online sales and marketing. The success or failure of a partner network, especially a new one, often depends on its attractiveness to publishers.
When setting up payment modes, it is important to understand the context in which one is operating. If a partner network primarily works with publishers generating organic traffic, then a proportional payment mode may be a good solution. When working with arbitrators, media buyers and publishers who choose the partnership based on payment size, a brokerage mode with fixed payments will be more optimal. This mode is also more beneficial for a partner network that wants to develop new directions and methods of work, attract experienced and promising publishers, and successfully compete in the market.
Despite the diversity of offers, the choice of a partner network by publishers depends not so much on the theme and geography of the offers, but on the rates, i.e. the size of payments for conversions.
Therefore, in this article, we will examine what types of payments are generally available in partnerships, consider their pros and cons and find out which mode is the most profitable.
Payment by percentage is not a panacea!
Typically, partner networks allow you to set the size of payments for conversions on an offer in two modes:
Proportional (ratio rate) – a mode of payment in a fixed percentage of the conversion amount for a certain offer.
Fixed rate mode, where payments for conversions are made at a fixed amount.
In reality, despite its simplicity and logic, the proportional mode is not always the best choice for publishers and the network itself. For solving a number of issues and working with certain types of offers, the fixed rate mode is superior to the proportional mode.
Proportional mode is the standard for many CPA networks and allows you to set the necessary % for crediting the balance for incoming conversions for each publisher.
This mode is most convenient for working with offers through, for example, smart links, as conversions come from different sources, and it is difficult to track them.
However, this mode may not be optimal for working with high-price offers, subscriptions, or leads, as the percentage of payments may be too low. Also, the proportional mode does not take into account the lifetime value of a customer, and a one-time conversion can be much more profitable than many small ones.
Fixed rate mode allows for more flexibility in working with offers, as the network can set different payment amounts for different types of conversions, taking into account their value. This mode also allows networks to work with offers that have higher payouts. Additionally, fixed rate can also encourage publishers to bring in better quality leads as they will earn more with them.
Fixed rate mode and brokering
The fixed rate mode allows you to set a fixed payment amount in the currency of the partner network, in which publishers’ balances are replenished.
This mode is the best option when publishers work with a significant number of offers, and individual payments for them can differ by dozens of times and depend on both the visitor’s device and GEO and traffic type.
This is especially critical for arbitrators.
However, for the partner network itself, the fixed rate mode can also be an excellent means of increasing profitability and gaining additional benefits.
Many partner marketing platforms offer mechanisms for setting fixed payments for offers. However, often their work on balancing conversions received from advertisers and paying publishers is far from ideal.
In order to cope with the task of balancing, calculating amounts, and maintaining a transparent payments system, it is necessary to use additional tools and technologies, such as “brokerage”.
Brokerage is a way for a partner network to increase the amount of payment for an offer by taking a percentage from it, which can be directed to incentives for publishers with high performance, covering the costs of attracting traffic, or simply increasing the network’s revenue.
Thus, combining the fixed rate mode with brokerage can greatly increase the profitability of the partner network, while still remaining attractive to publishers due to a high level of payments.
The main task of brokering is to convert traffic payout and sums offered by the advertiser into a model that is beneficial for the partner network and the publishers while maintaining profitability of all operations.
UCLIQ offers the following tools to solve this task:
- Setting individual rates.
- Setting individual daily limits (caps).
- Setting budgets for offers – individual or general.
The ability to pay publishers a fixed amount for a lead, while the advertiser pays the network for conversion and RevShare.
The ability to pay publishers a fixed amount for a conversion in an accumulative mode, while advertisers send conversions with different sums.
UCLIQ’s solution allows for the setting of individual rates (both percentage and fixed) based on the following criteria:
- GEO, i.e. the origin of the traffic
- Publishers (and their groups) bringing in the traffic
- Visitors’ devices
- Individual limits (daily caps)
This function allows for setting a limit on the number of conversions for a specific offer for a specific publisher. The limitation works on a sliding 24-hour window basis.
The fixed payout mode can be highly attractive for promoting new GEO offers, new verticals, and sponsoring certain publishers. However, when working in this mode, it is important to keep costs under control, as it may turn out that the payouts to the publisher network’s publishers are higher than the revenue from the traffic attracted by the advertiser for a certain period.
The mechanism of budgeting offers and smart links solves this problem.
Fixed payout model for lead
The lead payment model allows paying the publisher a fixed amount for each lead attracted. It is important to note that the payment for the lead is set in the offer and can be either a default amount or individual for specific categories of publishers, GEOs, types of traffic, and devices. Payment for the lead and accrual are made at the moment the first conversion is received for a specific click. The conversion can be of any type, such as a sale, registration, or call.
In this example, the publisher has agreed with the advertiser that they will receive a fixed amount of $5 for every conversion on offer A. However, the first conversion received is only worth $3. Since $3 is less than $5, the publisher does not receive a payout. The $3 (minus a network commission of 20%, or $0.6) is added to the publisher’s balance, which is $2.4.
The publisher then generates another conversion, but this time it’s worth $4 (minus 20% commission of $0.8) and is added to the current balance of $2.4, for a total of $5.6.
The $5.6 is enough to pay the publisher their fixed commission of $5. The remaining $0.6 will be added to the publisher’s balance and can be used for future conversions.
In summary, when setting up the payment mode, it’s important to understand the context in which the network is operating. Proportional payouts may be a good solution for networks that work primarily with publishers generating organic traffic. On the other hand, fixed payouts are more suitable for networks that work with arbitrators, media buyers, and publishers who choose the network based on the size of the payout. This mode is also more beneficial for networks that want to develop new directions and methods of work, attract experienced and promising publishers, and successfully compete in the market.