We covered the CPA in my previous article and as promised, CPL is here to strip.
If I may predict, the CPL is back and will be here for a long time. Even though it sounds like a taboo, the facts sustain my affirmation and here is why.
CPA to Be dethroned First
Even though this model is apparently better for everyone, it actually is by definition forcing the trader-broker-affiliate trio to step off the win-win stage. While the affiliate is on a CPA model, he needs to bring traders in order to thrive financially. His first step is investing in traffic, rather SEO (long-term), PPC (expensive), CPM (trial and error costs), social, Call Center (high investment and complex operation) and so on. In the CPA model the affiliate is remunerated at the moment of deposit (some brokers require a few trades to be rolled).
Taking in mind that the affiliate is already invested in traffic, he is restless to receive his payment fast. This is how the "make money", "work from home", "get rich instantly" models were born. As evolution never stops, these models become more and more aggressive as the prospects start being immune to such CTAs (call-to-action). The outcome of such funnels results in impulsive traders, the 2 per mille naive believers. These traders will get into impulsive trades, wipe the initial deposit, get frustrated and turn away complaining on forums how they have been scammed and warning other people not to pay the tuition fee for reality as they did.
Retention is the most complex task in the broker's operation and the actual gaining lies there. When dealing with swiftly recruited traders from the "make money" models, retention often doesn't manage to bring re-deposits. Eventually, the CPA of $XXX will not worth in matter of ROI so the broker isn't on the profitable side either. What happened? The affiliate got his commission, the trader is frustrated and the broker needs more traders to sustain his operation. That is what the CPA model is, and please, keep in mind it is my personal opinion.
CPL Break Down
While CPL sounds as a risky investment for the broker, it doesn't have to be. It indeed needs more attention from whom and what you purchase, but nothing in life is simple.
How does the CPL model actually bring the trio to the win-win stage? The affiliate has no financial risks. His ongoing operation will continue to be profitable as long as the Leads are satisfying in matters of conversion rate and ROI so he has to make sure it will happen, meaning no "make money" model, but long funnels of educated traders who know what they are going to do.
The trader gets to the trading zone after he deliberately opted in and understood that he is going to trade high risk assets that can remunerate him if he manages to outsmart the rest. Even losing will be covered intellectually on the cry-on forums.
The broker has longer life time value clientele and his retention department (assuming well-trained) will squeeze a better ROI on the long-term.
What Would be the Best CPL?
It is a challenge but it can be achieved. The best CPL would be a mixture of funnels and a periodically full disclosure reporting from the back-end towards the publisher. The mixture of funnels means that a full campaign should be leaning on at least 2-3 sources, may be display, email, social, assisted registration, pre-calls, etc.
The tight team work between the publisher and the advertiser can help tweaking and tuning along the campaign in accordance with existing resources and honey pots. Say the call center is not manned properly to handle Pacific time, GMT should be raised in the meantime. If a certain GEO and source bring good results within the campaign life time, targeting should be boosted and narrowed down.
All the above can work only on a tight relationship and a CPL model.
See you in Amsterdam and stay tuned for the next.
