Billing Misunderstandings By Affiliates
Billing is often an overlooked factor when it comes to choosing offers. Learn why it should be something you consider with care!
As an affiliate, have you ever asked yourself why you should care about billing methods at the time of choosing an offer to promote?
Most of you will care about payout types (PPL, PPS, Revshare) and amounts instead of focusing on how users will be billed. Not your problem, right? As long as you lead end users to relevant offers, it’s all good. At least, this might be how you clear yourself of all responsibilities.
Today we’ll teach you why you should always be aware of the various billing methods used by content providers. But first, some quick definitions are in order.
What is offer billing?
Offer billing in affiliate marketing refers to a business model used by the advertiser to send online invoices to their clients for the products or services they offer.
Payment types can be one time or recurring. Most of the time with adult offers, end users are billed on a monthly basis (recurring) which allows you to gain more revenue through RevShare. This is also why you can make money from one single customer even years after the initial sale if he or she continues to spend.
What is pre-authorization billing?
A pre-authorization, abbreviated “pre-auth”, is the practice within the banking industry of verifying electronic transactions initiated with a credit card and rendering to assure there is a min $XX available balance on the card. This is commonly used to ensure the user is able to continue on a recurring membership once the trial has ended.
Concrete example of a pre-authorization billing method
Let’s use our FILF.com offer as an example. With our current full-auth at $50+ per trial sign-up, when the user enters their CC info a pre-auth is initiated to check if there is a minimum available balance to cover for the monthly membership (FILF is $39.95 USD). If the pre-auth meets the minimum requirement the sale will get credited at a payout of $50+ (whether or not the user decides to continue after the trial) but if the user does not have sufficient funds the transaction will be declined.
Now about our new $1 pre-auth. When the user enters his CC info the pre-auth will be initiated to check if at least $1 is available on the card. If the pre-auth meets the minimum requirement the sale will get credited at payout of $30+ (whether or not the user decides to continue after the trial). On the other hand, if the user does not have sufficient funds the transaction will be declined.
You might be left wondering just why you should send traffic to an offer that pays $30 PPS vs the same offer with a higher $50 PPS payout.
Well it’s simple… your traffic comes from different geos with a varying age range, income tiers, etc. Therefore, not everyone walks around with big limit CCs. Nowadays more and more people use prepaid cards. Younger users are more inclined to use prepaid or debit card. Then you have a lot of Tier-2 or Tier-3 traffic using lower balance or prepaid credit cards.
At the end of the day, no matter how HIGH the payout is, earnings per click (EPC) is what’s important. For instance, with a $1 preauth offer, your chance of converting users are greater than with a $40 preauth.
We’ve done some testing with the new $1 preauth billing methods for FILF, PunishTube, NarcosXXX, SheDoesAnal and StepLesbians. We concluded that using different traffic sources for the $1 preauth does better or evens out, but it’s definitely not making us lose money.
Some of our results using pre-auth billing
Our media buyers did some testing with pre-auth billing offers. The stats below were taken from a unique source (pop under) for hardcore adult site PunishTube, which ended up with a better EPC.
Here’s one more example, this time using FILF.com as the main offer.
Top GEOs for this offer were US, UK & Canada.
One important thing to note is if you want to push $1 pre-auth trials yourself after reading this—and seeing how they’re pushing through more conversions—you’ll need approval from an Affiliate Manager first!