I am sure you already had the chance to meet enough sellers that don’t really trust their product. Well this is the case I also found in the online marketing business as well.

If you are familiar with the most important ad networks and affiliate networks and you would have looked for a referral program, I am sure you would have realized that not many of them have this program available for themselves. Now, it is a bit ironic when you think of it: these networks promote online advertising on a PPC or PPL basis, but many don’t use such methods in their marketing strategy.

In this case you start to wonder…how good are these networks if they don’t trust their own service? will they generate any sales to me? will my campaign have a good return on investment? will the allocated marketing budget bring the customers I need?

Success is based on the network capability to convert as many publishers and advertisers

Let’s see how these networks tend to make money. First, a PPC network is based, as you can guess from the initials, on pay-per-click or cost-per-mile conventions.

-The more publishers such a network has, the more CTs it might generate. The more CTs it will generate the more (and faster as well) will get the money from the advertiser. They will pay their publisher only a part of the money an advertiser pay for the CTs, so the rest it’s their gross profit.

-Also, the more advertisers such a network has, the PPC bid will rise, and in this case both publisher and the network will get higher profits.

The same goes with CPM, CPV or PPL based networks. Either way you take it, for such a network to succeed it needs not only innovative ideas (as some tend to believe), cause any new idea it takes no longer than 6 months to be copied by a competitor; it also needs as much publishers and advertisers as it can.

Many ad networks don’t have a referral program, so the incentive for publishers to promote the ad network is basically zero. Such a network is not likely to stay online too much as they don’t trust their own service to use. Other networks do have a referral program but in order to use it you have to comply to their website requirements for their ad display.

Bad marketing thinking

For example, I have applied to a network, specialized in promoting electronic goods, for their referral program. As Webeki.com has nothing to do with such products I was rejected. I wrote them back that I am interested only in their referral program (this way to promote their network for potential publishers and advertisers), and their answer was that “they need to make money, and they don’t make money from their referral program”. True . With the referral program they would give money… BUT they would acquire publishers and advertisers without whom they wouldn’t get any profits.

The leaders

This is not the thinking of the online marketing leaders. Google AdSense offers to publishers promoting their AdSense or AdWords programs quite good commissions: for any AdSense account referred Google pays $250, and for every AdWords account you get paid $40. You can easily see the importance Google gives to its ad serving network: the more publishers they have the more CTs they generate, the more web areas they cover, so the more advertisers tend to register with their network in order to better reach their target customers.

The same goes with Clicksor, that offers to those promoting it 10% from the referred publishers’ revenue or referred advertisers’ spending. Pretty good for long term partnerships and residual income.