How to Dominate Adult Long-Term with Revshare (40)
If 5% of your leads turn in to paying customers, and you’ve been sending leads for 3-5 years, you’ve made somebody a lot of money.
A lot more than yourself.
This thought has kept me awake at night: haunting my stats, following me around Cake.
It’s only recently that I decided to do something about it.
My plan: to get balls-deep in Revshare.
If you’re not familiar with revshare, it is what it says on the tin.
You sacrifice the initial lead payment, and share any revenue generated from your leads -- sometimes up to 75% of it -- with the merchant.
Essentially, whenever one of your leads turn in to a paying customer, he becomes your paying customer.
It’s a powerful concept because it gives you a competitive advantage in an industry where you really need one in 2014.
(More on that: http://finchsells.com/2014/06/23/dude-wheres-my-margin/)
The more paid members you recruit, the more income you generate, and the more income you can forecast as yours on the 1st of each month. With no fresh work required.
It’s the starting from scratch that torments us.
I hate checking my morning stats, even on the best day, knowing that... it all starts again, from zero.
When you change your mindset and focus on:
- Residual income
- Ownership rights
- Revshare
…Then motivation, I find, is much easier to come by.
Simply waking up on Tuesday knowing the work you did on Monday has taken you one small step forward is a revelation for tired affiliates.
So what are our Revshare options?
Here’s what I suggest:
1. AdultFriendFinder
2. Cam sites
1. AdultFriendFinder
If you’re going to run revshare, you need an offer that delivers a user experience that doesn’t have the guy cancelling 5 minutes after joining.
It’s well known that most adult dating sites… are not exactly the thriving hubs of cheating wivedom that our landing pages would have the Male Victim believe.
AFF is probably the best of the bunch.
AFF will pay you up to 75% on initial orders, plus 55% on recurring orders.
At first glance, that doesn’t look too attractive.
PPS can you net you $130 per sale.
PPL is $4 per lead.
Revshare is around $15-$20 for the initial sale, but then crucially -- further payments after each renewal.
Yes, admittedly, AFF membership packages are cheap compared to other adult sites ($20, $30), but that’s not a bad thing.
A low price helps you retain customers and ultimately snowball your earnings.
I find affiliates tend to go for the quick and easy option (pay per lead), or they will go for the bounty (pay per sale) — but they rarely take the Revshare option, even though as a destination for redirect traffic, it is by far the best long-term option.
2. Why cam sites?
Ever wonder why you can’t jerk off happily without encountering at least 7 blasts of LiveJasmine on your morning fapathon?*
*No, me neither.
It's because cam sites are money.
I’m surprised how few adult marketers integrate them with their funnels, especially given the raft of countries available to us.
Here are some cam affiliate programs:
http://chaturbate.com/affiliates/
https://www.videosecrets.com/
http://www.crakrevenue.com/ (MyFreeCams)
A cam site is virtual by nature, meaning a user based in any country in the world can sign up as a paying member and reap the same benefits as a guy living in US/UK/CA/AU.
He is not restricted to a small handful of dubious female profiles alleged to be in his Tier 1 hometown. These guys are paying to get private shows of tits and ass -- doesn't matter where they live, as long as they have two things: money and shame.
Your customer could be… an incredibly rich Arab in Dubai -- a liberal one mind you. If you were to secure commission of every cam show he pays for, it would make the low cost of Exo-pounding the living shit out of UAE look like very good business indeed.
But that’s besides the point.
Cam sites are addictive. They have this hearty moreish quality that keeps men coming back for more*.
*Or so I’ve heard.
When a user gets the bug and starts paying for titty, he will invariably keep paying for titty over and over again.
Every time he wants a private show, he needs to buy tokens.
Every time he buys tokens, you get half the price of admission.
To insert your grubby affiliate paws in the Wank Cycle is pretty much to make money when the sun decides to rise. You know it’s going to happen, and as long as he keeps on paying, you keep on earning.
In short, the lifetime value of the customer becomes a major revenue driver for your business.
Secure a couple of cam-show addicts on a revshare basis and you will make money day in, day out.
Note: For extra oomph, sign up through VideoSecrets where you can whitelabel your own cam site, customized for any niche under the sun.
How to Balance Revshare and PPL
To stay committed to a campaign, it helps to be making money from it today.
That's just how we are wired.
The emotional sting of losing money can frazzle your long-term objectives, so there is still plenty of value in the PPL model.
A good strategy is to combine both revshare and PPL in the same campaign.
Take a look at the classic adult dating landing pages...
Here’s how they usually work:
ARE YOU OVER 25?
YES >> Send him to offer
NO >> Fuck it, send him to offer.
Here’s what I suggest you do:
ARE YOU OVER 25?
YES >> Send him to offer
NO >> Send him to revshare offer (AFF or cam site)
I know a lot of affiliates are tempted to monetise the scraps with pay-per-sale programs.
And sure, it’s enticing. You might earn $100 instead of $4.
But it’s still a one-time transaction.
Revshare unlocks residual income; the goose that lays the golden egg.
Let’s say every month you manage to entice 30 paying customers on to AdultFriendFinder’s revshare program.
30 sales x avg $20/month sale = $600/month in residual income.
A reasonable chunk of change, but more important is what happens when you start compounding those earnings month by month.
Let’s assume that every month you lose 50% of the previous month’s new paying customers. So you’re adding a net +15 customers every month.
Total revenue looks like this:
Month 1: $600
Month 2: $900
Month 3: $1200
Month 4: $1500
Month 5: $1800
Month 6: $2100
Except you are spending the same in Month 6 as you did in Month 1.
The lifetime value of the customer becomes your greatest ally. And naturally, this works as a safeguard against our biggest enemies: rising click costs, and floods of competition. You can scale to the beats of LTV rather than fierce day-by-day arbitrage.
(Note: This is without member bonus payments for various upgrades that are available on AFF, or the surprisingly frequent "annual subscription” bonanza. Australians, in particular, are animals on adult sites. 12 months down-paid before they’ve stroked the first nipple...)
Can you think of a viable alternative with the PPL model that would add over 300% to your ROI through no other variable but time and patience?
If you can, I’ll be the first to rip it.
So, let’s say in Month 7...your costs rise, or your traffic source gives you the boot.
The good news is you still earn money -- from your work done in Months 1-6.
You can take a complete break from any kind of advertising and still have $2000 in your pocket. And again in Month 8. And again in Month 9.
Yes, you’ll lose subscriptions slowly over time. (Most cancellations happen in the first month.)
But if you operate a strictly PPL business?
You earn zero in Month 7, shit yourself in Month 8, and have a nervous breakdown by Month 9.
The longer you stay in the game, the more customers you acquire, and the more your income will snowball. This advantage allows you to outbid affiliates who are playing the tighter PPL variety of arbitrage.
Two reasons why I suggest you confine this revshare model to users under 25:
1. It will do wonders for the quality of your PPL traffic. Not many affiliates do a good job of filtering their under 25 traffic — your quality will stand out.
2. Breaking even or taking a small profit from the PPL side of the funnel takes the emotional sting out of the experiment. Your long-term business can grow slowly on the side, one paying customer at a time.
Aggressive affiliates might want to bump their age restriction to 30.
This will skyrocket lead quality whilst increasing the ratios of paying customers in your revshare funnel.
It’s up to you.
The final advice I’d give is this:
Think about residual income.
Think about residual income.
Think about residual income.
Think about residual income.
Think about residual income.
Seriously -- think about residual income.
Every day is a fresh start to the arbitrage marketer; a brand new dawn.
Some people find it refreshing.
These same people, so bristling with optimism, smiles, and fairy dust ambitions ... must be fucking psychopaths.
Check their blood pressure ten years from now and we'll see what's refreshing.
great idea.
Your calculation is a bit off..
"Total revenue looks like this:
Month 1: $600
Month 2: $900
Month 3: $1200
Month 4: $1500
Month 5: $1800
Month 6: $2100 "
Becuase you assumed that you only lose 50% of 1st months new clients.. while actually you lose them every month.
Now assuming that the drop rate is 50% each month the calculation would be like this:
600
600 + 300
600 + 300 + 150
600 + 300 + 150 + 75
600 + 300 + 150 + 75 + 37.5
600 + 300 + 150 + 75 + 37.5 + 18.75 = 1181.75
And if you stop sending fresh traffic, your residual income declines very fast.. Basically month 6, the past residual income is only 581 bucks..
So in 6th month you are making barely 1200 usd instead of 2100.
Also as a paysite and dating program owner I can tell you that the pps/l comission to affiliate is constructed from the revshare data.
For a typical paysite with a rebill of 2,5 on average (eg client generates 30 + 30 + 15 = 75 usd to program totall) the revshare would be 50%, maybe 60% but the pps would be 30$
so its basically the same , the only difference being that on the revshare you would also be hit with the chargeback costs and on pps we would switch you to revshare if the numbers you are sending are not performing as expected 
.
And another point:
In the revshare case you are assuming the program will do its best to convert signups to spend more money but that is wrong. Most of the companies do this very very badly and are non optimized and are squeezing out way less
money than they could be. And why should they ? They are not on at loss , since they only pay for revshare (they dont do it intentionaly but are just restricted either legally or administratively).
Perhaps it would be much better long-term and would make more sense also (if you think you can pull it off) to approach these companies and offer them to consult or actually do.. marketing to their existing clientele and try to sell more to them and thus increase the company earnings. So ultimately you would become a specialized ad agency.. marketing and remarketing the existing customers and increasing their spend.
Originally Posted by Finch
If you want to; check out streamate.com their revshare program is the best for cams 
Great post, especially about the Cam tip. I'm going to leave this PR right here for you all to see http://www.xbiz.com/news/news_piece....l&q=flirt4free
I'm good friends with one of the higher up guys at Flirt4free and he told me 2 months ago that the guy who spent this money has spent almost $1 million since he signed up, I think he has been a member for around 9-10 months. This member was also brought to them from an affiliate of theirs who gets 30% of all the money the whale spends, some $300,000 to date at my last conversation with my friend.
Another little tip I'm not sure if you guys know, the majority of "Dating" sites simply use Cam upsells to monetize their members, a lot of them couldn't care less if the guy gets laid on their site, pays for a membership, stays for a year... they simply want him to buy cam tokens and get hooked on a model.
Originally Posted by 32rfs23f23f
It's more of a tapering effect, offset by the occasional nutcase who will front an entire year on the best package.
There are a couple of adult dating brands out there where the retention rate is horrific, admittedly (having poked my nose inside them, I'm not surprised!)
This might have something to do with the markets my client and I are operating in -- Australia generally being ridiculous good for adult dating. Particularly the older demo.
Revshare is probably about the only thing he will stay on.
I think the real hook is that they can be anywhere. You don't have to compete in the toughest markets to find customers who can potentially be worth a shit ton of money.
It's quite similar to the old CPA network referrals on the 2% 'lifetime earnings' model. A complete fool's game most of the time, scratching around with pennies.
Then you refer some animal who blows up the network on $50K/day and help yourself to a nice, free slice of it.
I think as far as the cam sites goes, if you play your cards right and the affiliate Gods align in your favour, there are definitely some jackpots to be had.
excellent! thank you
When you get started with a rev share offer, how do you know what you can spend on media for delivering a customer? You'd probably have to spend more than what you initially receive at the first payment?
Originally Posted by keepthecar
I wouldn't expect that though.
The companies generally have their payouts weighted equally, so you could use their lead payout as a guideline for target CPA.
The benefit to revshare (besides offering a home to your younger traffic) is, like said here by TrafficForce:
That's less likely to be a factor on AFF where payments are fixed, but it's a huge thing on cam sites where the payment directly correlates to user activity. There's no limit on how much they can spend.
Originally Posted by iAmAttila
YES >> Send him to offer
NO >> Fuck it, send him to offer.
Here’s what I suggest you do:
ARE YOU OVER 25?
YES >> Send him to offer
NO >> Send him to revshare offer (AFF or cam site)
Instead of blowing your quality with these young bros, let them work for you! Great share Finch, the adult longevity word is out!
Excellent post Finch!
In your experience how long did it take to break even?
I used to do this 2.5 years ago and still today I get monthly payments. Also a good chunk of my initial users never cancelled :P
However I must admit that getting users to sign up 2.5 years ago was much cheaper.
Also did you split-test any other options besides AFF ( like datingfactory / whitelabeldating etc) ?
Back in my SEO days, I used to run lots of adult blogs , sending sales to paysites mostly ($30- $35 per sale, revshare on paysites was declining unless it was a solo girl site). I used to place banners to dating sites and cam sites as an afterthought.
I've since left the adult business (not so much left as Google kicking my ass and wiping my sites) and I'm still seeing $100-$150 /month cheques from some dudes addicted to camsites. I'm talking 3-4 years of continuous, monthly revenue for work I did ages ago.
Revshare is much more effective on cam sites than dating sites IMHO. These guys usually get addicted to some cam girl and spend a ton of money every month talking to her, buying her shit,etc. On dating sites, it doesn't take long to realize most profiles are fake and they get bored and leave.
There are some cam sites paying up to $200 per sale for each new signup, which I think these days is wiser. I'm not sure how easy it is to land a guy that's gonna spend that much money monthly on some camgirl these days.
It's a shame the adult side of things became such a clusterfuck after the advent of Tube sites...things were much easier back then without so much free porn.
Nice article Finch! I started doing this about 9 months ago. I started with publishing links on adult forums but am currently planning for PPV.
See you @ Adsimilis Meetup
Nice post, I've been doing revshare for years on french offers.
In my experience, with a "every 2 months rebill" it take 8 months to get the same money that you got with the PPS and the lost of rebill is nearly ~=35% per cycle (each 2 months here).
I've switch back to PPS a few months ago for 2 raisons :
1. Get a boost of cashflow in a short term, you have all the rebills and a boost of money with the PPS from the current month.
2. I've seen several programs that have been closed in the past years, what do you think it will happen to your rebills then ? You lost them. Period. I've seen guys losing $XX,XXX in that king of situations.
If I can give you a simple advice : if you want to go revshare, use multiple programs because each program will virtually own you A LOT of money in 12 months, and if it closed for any raison, you will loose all that money. Better to split the risk in several programs, even if that cut a little of you % revshare because you also split your volume.
Originally Posted by givizator
If you are going Revshare i would suggest going with the big guys who have been around for years such as AFF, togethernetworks e.t.c.
Fantastic article, and I heartily agree.
I've run revshare a few times too, and despite them being tiny campaigns ages ago, I've still got wires coming through every so often!
For anyone considering this - if you're going to do this, I heartily recommend looking into some more advanced analytics and metrics. Stuff like cohort testing and churn rate analysis becomes invaluable when you're not just dealing with a 1x payout, but instead with an ongoing revenue stream. There's a bunch of good info on this stuff in "The Lean Startup", and I can do an article on advanced metrics on STM if people would be interested.
Originally Posted by caurmen
Business wise this just makes no sense..
You are switching from a stable and predictive payout - eg pps or ppl with a determined value to something that has an unknown variable - actual revenue earned per member in revshare. In addition to that you are introducing an extra risk factor, where the forces impacting the projected revenue via revshare are out of your control. And thirdly you are stretching the credit line, instead of a flat payout every week the revshare generated per conversion takes months or years to reach the amount paid out immediately at signup for the pps /l payouts.
So from the business perspective its all setup for a major fail: unknown amount vs known amount, no control / influence to increase the amount, vastly prolonged time to deliver the amount.
It does not make any sense at all. Not trying to be anal but the risk is increased X times via 3 totally different factors.
I dont see how you can work the numbers meaningfully with bought traffic if you are dealing with a variable - CPA in range of 20 to maybe 200 (in 1 year). Unless you manage to conver them at 20$, but then why bother really dump them to pps 130$ and collect a cool 110 profit today .. not 6 months from now.
If you need a terminal to offload the under 25, that dont get credited on the ppl, and you dont want to do pps, then inbox them to a mail list and mail them daily. That is the most lucrative and controllable thing you can do - and you can mail them with revshare till they drop, and test different sponsors as much as you want.
Originally Posted by 32rfs23f23f
Sure, it's harder to track CLV. But when that number can be literally hundreds of times what you would earn with PPL, and 4-5 times, maybe even more, what you would earn with PPS, putting in that extra effort can pay off handsomely.
Originally Posted by 32rfs23f23f
(Not to say that it can't be effective.)
Promoting revshare will work out better than PPS or PPL if:
a) Your traffic quality is extremely high (so you beat the average performance network-wide and take advantage of long-term renewals, plus massive earning outliers -- like the cams addict example)
b) Your traffic quality is extremely poor (in which case running PPS or PPL will just get you culled)
Either way, the ideal setup would be to promote a hybrid: Revshare for under 25s/30s, and PPL or PPS for the target demo.
You're right -- another way would be to opt in users and mail them continuously.
But from my experience, that's not cheap. And it's extremely difficult to keep a list alive in the adult space with the types of landing pages that we use. Certainly if you want to stay within the legal boundaries.
In your experience how long did it take to break even?
I used to do this 2.5 years ago and still today I get monthly payments. Also a good chunk of my initial users never cancelled :P
However I must admit that getting users to sign up 2.5 years ago was much cheaper.
Also did you split-test any other options besides AFF ( like datingfactory / whitelabeldating etc) ?
AFF isn't particularly 'clean', but I think it retains users a lot better than some of the networks out there.
As for breaking even on the paid side, difficult to measure as the PPL funnel drives most of the revenue and that is already profitable.
I stay on PPL offers much longer by restricting access, though. That alone is worth implementing age restriction, regardless of what you do with the rest of the traffic!
Originally Posted by 32rfs23f23f
The name of the game is finding value where others don't. Michael Milken and Howard Marks have a pretty good talk on risk on YouTube for those that are interested:
https://www.youtube.com/watch?v=4-uee9RfO6c
Milken sold junk bonds for Drexel in the 80's to finance hostile takeovers, for those that don't know. He hit it to the tune of $3,000,000,000 (yes, billion) before the SEC shut them down.
Long story short, the riskiest thing you can do is exactly what everyone else is doing. You will never lead the crowd if you are always following them.
I got it! We'll start a cam girl site targeted towards rich saudi princes, we can call it naughtysaudis.com or something of that nature. We'll dump all our under 25 leads there and hope for a whale.
On a serious note, this is a great idea because I am def. guilty of saying "fuck it, all ages are going to the offer" only to rue that decision a week later.
Awesome post Finch!
I want to incorporate this into my adult, but I'm javascript handicapped
Does anyone have the java script that allows me to send the person who clicks under 25 on the first question to a different url on the submit button? (typical rules lander)
Originally Posted by sciaq
It's 2-3 lines of code.
Cheers bbrock32, yeah was going to go the fiverr route.
But after some spying and brute force javascripting I finally got it to work!
Also, a lot of landers have these codes in them but they don't actually use it, it all redirects to the same link. I guessed they just jacked people that were actually using it
By any chance do networks track your unpaid leads? eg a dating offer which pays for 30+ but you send it all your traffic, so 18-29 would be tracked and any sales would be added to the value of your leads to them?
Nope, all I have worked with, they only track valid leads ( according to the offer guidelines )
The average life time of a new customer is worth £100 on Match.com.
Originally Posted by bbrock32
Thank you! It just seems silly to me that they put no value on these 18-29 leads when they are essentially getting them for free, so even if they are not worth the lead value (lets say $4) they may very well still be worth 0.10c-$2.00 to them, which goes un tracked.
Which in turn if everyone uses this redirect method, the advertisers with a 30+ age cap are all going to see a decent drop in there bottom line.
Nice write-up Finch following on the points you made at the London meet-up. Good discussion also!
One thing I'm unclear on: why would anyone ever get booted from a PPS offer? The only time you get paid is if the punter pays. The advertiser would be taking their slice too and there's been no expense on their part up until the point of conversion. Everybody's happy right?
The only reason I'm coming up with would be charge-backs. But surely if that's a problem their gonna incur similar costs regardless of the payment model?
Originally Posted by Finch
Originally Posted by prof
But they will pay the affiliate up to $130 per order.
If the affiliate delivers a ton of weak sales that cancel straight away, or in the first couple of months, then they will lower your payout or kick you back to revshare because their model requires those members to stick around.
This goes back to what I was saying about revshare being the best option for affiliates with a) very poor traffic or b) very good traffic.
If you have poor traffic, it's the best you're going to manage.
If you have amazing traffic that refuses to cancel and keeps paying for 2-3 years, you can easily cash out $500-$700 for a single member that would have earned you either $4 or $130 with the other models.
The PPL and PPS models generally work best when you are in the middle -- if your quality is average.
Originally Posted by 32rfs23f23f
"Total revenue looks like this:
Month 1: $600
Month 2: $900
Month 3: $1200
Month 4: $1500
Month 5: $1800
Month 6: $2100 "
Becuase you assumed that you only lose 50% of 1st months new clients.. while actually you lose them every month.
Now assuming that the drop rate is 50% each month the calculation would be like this:
600
600 + 300
600 + 300 + 150
600 + 300 + 150 + 75
600 + 300 + 150 + 75 + 37.5
600 + 300 + 150 + 75 + 37.5 + 18.75 = 1181.75
And if you stop sending fresh traffic, your residual income declines very fast.. Basically month 6, the past residual income is only 581 bucks..
So in 6th month you are making barely 1200 usd instead of 2100.
Also as a paysite and dating program owner I can tell you that the pps/l comission to affiliate is constructed from the revshare data.
For a typical paysite with a rebill of 2,5 on average (eg client generates 30 + 30 + 15 = 75 usd to program totall) the revshare would be 50%, maybe 60% but the pps would be 30$
so its basically the same , the only difference being that on the revshare you would also be hit with the chargeback costs and on pps we would switch you to revshare if the numbers you are sending are not performing as expected
.And another point:
In the revshare case you are assuming the program will do its best to convert signups to spend more money but that is wrong. Most of the companies do this very very badly and are non optimized and are squeezing out way less
money than they could be. And why should they ? They are not on at loss , since they only pay for revshare (they dont do it intentionaly but are just restricted either legally or administratively).
Perhaps it would be much better long-term and would make more sense also (if you think you can pull it off) to approach these companies and offer them to consult or actually do.. marketing to their existing clientele and try to sell more to them and thus increase the company earnings. So ultimately you would become a specialized ad agency.. marketing and remarketing the existing customers and increasing their spend.
But usually, it was better to take the $30-$40 PPS payment than risk it with revshare. In some cases, with site owners where I had good relationship with the affiliate managers, they even told me to go for PPS after looking at my data, because I was able to make more that way. What I usually saw happening after using the revshare model for lets say a year, I would have made the same amount of money if I took the PPS straight away and I wouldnt have to wait 12 months for it to happen. Another fact is that plenty of adult affiliate programs simply closed shop the last 2 or 3 years, so goodbye rebills. So now when I join a new program, I usually pick PPS straight away, only with proven partners with high rebill rate I go for revshare. And thats only because I love one bonus that comes with revshare, the rebills cover your ass if you hit a bad month in terms of initial sales
Originally Posted by Finch
Originally Posted by Sweet Tooth #3
Can't wait to be over 40 lol.
Love is a wonderful thing created for during 3 years, the time for us humans to perpetuate the species... But when it's finally gone, the real fun begins!
Thanks for the great post, Finch!
May be it's a silly question but... why are the under 25 users better for the Revshare? I always thought that people over 25 were more likely to make a payment.
Originally Posted by joan_f
By using revshare for the under 25, you can take the risk and still use this traffic.
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