What do you think is the right amount to set to advertise a social networking site with a pay per sign up affiliate program. I don't want to spend like $1 per sign up but i also want a lot of publishers to sign up and promote. What amount do you think is right? I'm trying to stay below $0.50..is that too low?
Let's do some simple math here.. if you have a social networking site. lets say you pay $1/sign up. i am guessing you pay the affiliate $1/sign up. not the actual people who signs up. you get 50k sign ups.. thats $50,000.. lets say 20% of users visit the site daily. thats 10,000 visits a day. average of 10 p/v per user (high because of social networking sites).. thats 100,000 pv a day or 3m pv/month with a very conservative .4% CTR thats 12,000 clicks/month. at an average of 50c/click thats 6,000/month along with banner ads, subscription, etc. it can be about $9,000/month if you know what you are doing. subtract promotion, server costs, etc.. thats $7,000/month or $84,000/year. incorporate, file taxes, etc.. and it is a legitimate business and is worth about 3 to 4 times the annual income.. or rough estimate of about $250,000. now, would you pay $50,000 to be worth $250,000? ofcourse it is not that easy but i used conservative, close to real life figures. hope this helps
You may want to consider going with a network, paying approx $1.10 per sign-up and then the affiliates will be paid about $0.80 but the volume will be a lot bigger and there won't be trust issues between you and the publisher.
I agree, don't go below $1. What you can do is: everytime a user signs up they have to sign up to ___ as well (which is your advertiser's $$$, ask for $1 or more from the advertiser per sign up). So they can basically pay for this promotion.
Good post. I would decrease the 50c/click though. With social networks the click value is more likley to be in the teens to single figues. So it could be around $0.03 - $0.20 with Adsense. But with YPN, it probably will be more. Also the CTR may even be less that .4% depending how good you are at optimizing the ads. People go to social bookmarks not to click on the ads, but to socialize.
But something like this you never tried, you would never know. Try try out for a month or two and see the result is good or not. It's liek adsense, keep trying diferent methods till got the best way.
The first rule of affiliate marketing is to try stuff out. If you never try stuff then you will never know. For example, you see an affiliate program and you think about joining it, but then decide that you will not quite yet as it may not be all that good. About 6 months later then it is accrossed the whole of the internet that this program is earning people thousands and then you join it, the earnings end up being less no that you joined it because you didn't get in at the start. That what happened to me once. If you want to earn online then you have to spend money to make money even though it may be risky at times. If you don't take risk then having an online business may not be the best idea.