Pay-Per-Sale (PPS) and Revenue Sharing (RevShare) Basics
Introduction.There are a couple of different ways websites generate money, using affiliates. One is to pay a flat fee for every sale (PPS). The other is to split the revenue from any sales (revshare). These are sometimes called, programs.Both methods are used widely. This is a discussion of the pros and cons of each approach. The basics.Revshare relies solely on retention, for it's revenue base. PPS relies on retention, as well as a number of other methods. These include cross-sales, up-sells, and exits. Often, exits are pop-ups. They appear when the surfer doesn't join a site, after closing the original browser.Both methods work. However, it seems profitability, of each program, is determined on a site-by-site basis. A fully 'optimized' PPS definitely generates a lot for affiliates, when it converts well. You must be careful when saying, 'optimized'. Many sites, 3 years ago, were 'optimizing' traffic. They used multiple cross-sales, to pay $50-$70 on PPS. Clearly, it was good for affiliates and program owners. However, surfers suffered. Those days appear to be over. Program Improvements.PPS sites, today, are much better. With the reduction in chargebacks, it appears one cross-sell is perfectly reasonable to the surfer. Plus, the use of exits continues to prove effective. It is a way of optimizing traffic.When saying cross-sales and exits are good, this is only looking at it from a webmaster point-of-view. Personally, it's annoying. You don't intend to buy. However, you get pop-ups. Oh well. Probably, 1-3 is reasonable. Differing opinions.There are supporters and detractors of each model. Partly, this is because of different philosophies behind each.Revshare (Revenue Sharing).Revshare seems to be geared toward targeting qualified traffic. This is to improve retention. It avoids gimmicks 'believed' to annoy surfers. Also, it has a philosophy of not trying to juice each surfer for every dime.Revshare builds trust among your members. They stay long and are happy. PPS (Pay-Per-Sale).PPS is geared toward extracting as much as possible from the surfer, at every corner. Use anything to get the sale. This includes pop-ups on entry and exit, cross-sales, disabling the back button, or resizing the window so it is hard to close.It attracts a lot of unqualified traffic. The promoter of PPS does not care if the customer stays. There is no incentive. All they need is a one-time sign-up, since PPS pays once per sign-up. PPS is best to get as much as you can, in as little time as possible. Why? Because no one sees into the future. Who says, similar money is there a month, or two, from now? In other words, make haste (as much haste as possible), while the sun shines. Shaving.It has been suggested revshare has less reason to shave than PPS. This is due to the math required to make PPS work. The truth is, both types of programs shave. Revshare may have less reason, but it still is possible.Wherever there is greed, there are things like shaving. It makes no difference if it is revshare, or PPS. In fact, some major revshare programs were quietly not paying beyond a certain number of rebills. Thanks to the transparency of a few credit card processors, affiliates were able to see who was shaving. And, who was not. It is not as difficult to find a PPS program shaving, considering the pressure to sell. Doing the math.Many believe the math for PPS no longer works. It does work, when done properly. However, it's a more difficult method, than revshare. The more elements added into your math, the trickier it becomes. More capital is required to pull it off. This increases the difficulty. However, all things being equal, it does work for many companies.Conclusion.As an affiliate, what is there to conclude from this? Promote trusted sites, offering both revshare, and PPS. It allows you to compare the results of each method, and see which one is more profitable. The results will be different, depending on the sites and program. It also depends on the price and quality of the sites. However, it does make it easier to see which works best for you.Xanga Myspace LiveJournal | free pics images | free My space Backrounds |