Recently, a friend of mine pinged me about an idea for a network. That he came out and started talking about a network made it initially challenging to take him seriously. Instead of sounding like the smart entrepreneur he is, it comes across sounding like someone who says, “I have an idea for a social network.” The idea might be a good one, but given the competitiveness of the landscape and the number of others that have tried and not necessarily succeeded, it taints the concept regardless of the overall business viability. In his case, once past that he wanted to start a network, the type of network he wanted to start seemed to make sense. Technically starting one is not that hard (HasOffers will even give you a 30 day free trial), but creating one that has the potential to scale and with differentiation is a lot harder.
Concept
Unique offers. That is one of the clarion calls from the dawn of time (circa 2004). Want to start a network and don’t have unique offers? It has happened, but you better have one of the following – a deep rolodex, higher payouts on the existing offers, a higher cap, or the ability to run said offers on traffic sources that others will not allow. The other option is having something that others do not. It sounds easy at some levels. Here is an example. Were we a network, we would find a hot new startup in the subscription commerce space that is doing well and wants to grow. They have an idea of what they make per day per customer, and they have had some success doing Facebook but haven’t really invested in their customer acquisition. They could hire someone, but they would much rather pay the equivalent of that person’s salary (or more) to a third party that has the experience and is willing to take the principal risk for the media spend.
Tracking
As a new network who happens to have an idea on which companies to target, the next question is which platform do you use. If you have a few direct advertiser relationships, you might even decide to take it to an existing network. But, you might want to try and own as much of the value as possible yourself, so you might still open shop under your own brand. Who do you use? Direct Track, Has Offers, HitPath, Cake, LinkTrust? Each has their strengths, some of which has less to do with their technical capabilities as their branding. The tracking space has turned into the performance marketing equivalent of the email service provider space. There are a few ultra dominant players looking to sign on not just any network but ideally existing brands looking to grow and manage their third-party relationships.
Going Live
You’ve signed up the advertiser(s) and decided on a platform. Now you must go live. In the old days it meant loading up creatives into a system; in the really old days it meant people actually using the creatives you put in there. Today, it is primarily for show with going live being about what traffic implementations you can accept. Is it a host and post? Can it run on incentivized traffic? Does it run on mobile? In a co-reg path? As if that weren’t enough, you have to worry about fraud prevention and in today’s marketing world, monitoring the brand. You can’t afford someone running the offer in a non-compliant manner where compliance is a multi-part function of what is said and where it is run.
Balancing Traffic and Performance
Making sure you have tracking is only one piece of the equation. The second is making sure that your end clients do. Then, you have to make sure that they actually know how to judge the value of the traffic that is being sent. They may say that they will spend hundreds of thousands of dollars per month, but saying that and writing the check are two different things. It gets harder, too, when you try to start out slowly. Let’s say you find a few direct publishers (since you can’t go to another network). They do an email drop only for you to find out that it didn’t test well. You have received a few thousand in revenue but all new traffic has slowed to a trickle. The same applies for those doing Facebook tests. Perhaps the conversion funnel wasn’t good. Or, maybe there was a pixel issue. Whatever the reason, it didn’t back out. Now, you’ve spent six weeks onboarding only to have a few hundred dollars in profit. You now need to either raise rates or work on the flow. You are going back to someone for more. And, we wonder why offers that shouldn’t be on incentivized traffic end up there. Yes, this space sounds so easy. That crazy thing called hope has us believe that it will be each new time. Thank goodness for hope.
Network
