Big CPA Networks = Not So Big Anymore?

by Josh Todd on January 15, 2010

As a CPA network owner myself, I am a member of a lot of CPA networks.  We do business with a lot of them, others we used to business with, and some we mean to but just haven’t gotten around to it yet.  So many offers, so little time…

Anyways, when you are a member of a lot of CPA networks you get a lot of newsletters from said networks.  One thing that they always like to do is put the names and contact info (and sometimes a picture) of all the Affiliate Managers at the bottom of the email.  Over the last year, I’ve noticed an interesting trend: the number of Affiliate Managers per network is shrinking!

This trend is especially evident in large CPA networks such as Affiliate.com and MediaTrust (formerly AdValiant).  So why is this happening? I think it’s simple: the industry is evolving in favor of smaller boutique networks instead of the giants that thrived before.  With margins on offers getting cut razor-thin, it’s the companies with low overhead and lower expenses that are winning the favor of affiliates today.

The new CPA network business model isn’t going anywhere anytime soon, since new affiliates are joining the industry by the day and these boutique networks are better at training and growing the revenue of these newbies.  It’s almost getting to the point where affiliates (especially super affiliates) are becoming like superstar athletes, and CPA networks are like agents.  Can you run an agency with just a couple of key clients?  Absolutely.  That’s why this trend is not going to stop any time soon.

At some point there might be too many networks for the affiliates out there, but I think that day is a long ways away.  As long as new people keep flowing into the industry, and as long as network owners keep innovating new ways to educate and involve the affiliates in their business model, there will be a place for them in the performance economy.

{ 5 comments… read them below or add one }

David January 16, 2010 at 3:35 am

Maybe its because the market has low barriers to entry that everyone is starting their own boutique agency?

Anyways, are you going to Summit? If so, email me above – would love to meet up. Love to learn more about PPV stuff.

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Kiley January 16, 2010 at 2:14 pm

One of the reasons Hydra is going to the crapper. Overhead.

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Josh Todd January 16, 2010 at 5:30 pm

Totally. I can't believe that I didn't mention Hydra in the post, their trouble is definitely part of what inspired it.

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Victory January 20, 2010 at 11:43 am

I would be interested in your thoughts on discontinuing affiliates who under perform. When/if you do it. What "warnings" do you give. How do you put a fire under there ass, etc…

thanks!

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Travis February 6, 2010 at 2:40 pm

Great post! I completely agree with all of these comments. I happen to manage a major part of a CPA network owned by Shawn Casey and I couldn't agree more with the part about being able to run a CPA network with just a few heavy hitters. We in fact manage our network on a concept much like that. Awesome to see there are still good conversations about CPA networks and what is ACTUALLY going on.

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