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Old 11-10-2001, 01:37 AM   #1
wly
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Default The Pyramid - A View on the Future of Making Money on the Internet

Year 1997 - 1999 Pyramid

Top - CPM
CPC
CPA
Bot. - CPS


Year 1997-1998 --- Undoubtedly CPM was King. Rates are going sky high of $40-100 CPM. CPC was a young prince still in development stage. CPA/CPS were sleeping giants.

Year 1998-1999 --- We see the crowning of CPC as the new prince.


Year 2000 --- The internet was in a state of great change. Turmoil, Destruction, Uncertainty....

All of a sudden the pyramid was utterly reversed.


Year 2001 - (undisclosed) Pyramid

Top - CPS
CPA
CPC
Bot. - CPM


Year 2001 --- CPM is virtually dead with rates at an all time low of $0.01 CPM (offered by Clickxchange). CPC is also dying fast. CPA has become the new hero. A new breed of new CPA networks were born. CPA was crowned prince of the new millenium. But the arrival of the imminent king cannot be stopped. The prophecy must be fulfilled.

========================

Based on the model above, these 4 actions were inherently connected. After displaying an ad, one has to click on it, do an action, and later buy something. CPC and CPA are betweens thus they both can never be king. I believe CPM will someday make a comeback (maybe 3 years from now) but only for the big boys. CPM is for branding. You need to have a site like Yahoo and an advertiser like Ford to make it work. The internet is changing and changing fast, those who ride the wave of change will survive and those who go the next step will prosper. It's more hard work for us webmasters because CPS is definitely 100x harder than CPM but with determination and hard work I know we can make it. Actually from one of my new site which I use CPS, I am starting too see a CPM of $12 (month to date). Hope this helps.


P.S. This is just my view, not Nostradamus' What do you guys think, will CPS be crowned king in a year or 2?
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Old 11-10-2001, 02:12 AM   #2
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CPS/CPA definitely will be king in the next couple years. However, there will have to be a great evolution in how CPS/CPA works for this to happen. At the moment, the vast majority of CPS/CPA programs are not geared towards a good relationship between the merchant and the affiliate (this is coming from me, someone who generates nearly 100% of his online revenue from CPA/CPS/Selling own products). In the evolution of CPA becoming the preferred method, we'll see quite a few companies revise their programs to make them much closer to a fair and equal relationship. The sad part about this is that many merchants abused this system for many years and will only be forced to change when it becomes adopted by larger web sites as a fair and equal way to conduct business. All I know is the next few years should be a lot of fun for webmasters relying on CPS and CPA.

Of course, all the other types will have their place and continue to be used in certain situations.
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Old 11-10-2001, 02:20 AM   #3
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Default interesting

Very interesting way of analyzing the market these days.. I think I actually prey at night that CPM will return to a state where it is worthwhile to use on a site. 1 cent cpm.. c'mon give me a break.. Running cpc ads will pull a higher cpm than that garbage
Feels like we're heading into a recession or something...
I agree with you on the riding the wave out of this sunken economy.. I think the people who are capable of making any sort of money throughout THIS period will be in absolute heaven when the market decides it needs to come back up for air.
Anyways..
Just my 2 cents..
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Old 11-10-2001, 08:48 AM   #4
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Quote:
Year 2001 - (undisclosed) Pyramid
Top - CPS
CPA
CPC
Bot. - CPM
I would say this is an accurate picture with one exception.

Direct Seller
CPS
CPA
CPC
Bot. - CPM

The biggest money maker by far, if you are able to do this, is selling your own products.

On a positive note, sales this Christmas are already more than 3 times higher than last year. I would think this would translate into good news for those running CPS programs too.

The problem of course selling your own product is that its more time consumming. The key to getting online sales is to deliver prices they'd expect at Walmart with the service you'd expect at Nordstroms.
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Old 11-10-2001, 06:07 PM   #5
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:::Feels like we're heading into a recession or something.

er we entered a recession on September 11th. The internet has been in a depression for about a year.

::I would think this would translate into good news for those running CPS programs too.

A great CPS program is Amazon.com. Sales have gone way up since I started using there recommended links. For example, in the first 16 days of this quarter I sold 16 items. In the last 20 or so days I've sold 129 items, best day so far is 20 items sold.
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Old 11-10-2001, 06:43 PM   #6
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With the reversal of the pyramid, the ballgame has also changed. Before when CPM/CPC were tops, cheaters were affiliates who cheat the merchants with hitbots, etc. But now that CPS is at the top, cheaters now comes from the merchant's side. They could track losuy or not track at all. So it's now double hard to make money on internet.
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Old 11-10-2001, 11:41 PM   #7
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drbones: what happens when we are "in absolute heaven" right now? What Am i going to be like when the markets come back?
Anyway, just offering my 2 cents, and this game is the exact same game economics play, the market is a roller coaster boys and god knows whats next!
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Old 11-12-2001, 05:42 AM   #8
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Very interesting analyze, I seem to agree with you all. BTW, I'm still dreaming about the CPMs we once saw. Ah...those were there days . CPMs isn't really dead though, but most ad networks don't offer great rates for regular banners.

But didn't you forget to include popups? Or do you consider popups to be CPM? I know they are CPM, but banners that are CPM and popups that are CPM are quite different. For a lot of people, the popup alternative is a nice little addition to raise revenue.
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Old 11-12-2001, 05:45 AM   #9
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A downturn is when small businesses fold
A recession is when large businesses fold
A crisis is when banks fold
A catastraphoe is when governments fold
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Old 11-12-2001, 06:51 AM   #10
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Quote:
Originally posted by Dave1
A downturn is when small businesses fold
A recession is when large businesses fold
A crisis is when banks fold
A catastraphoe is when governments fold
Those are great guidelines. I'd never heard the different phases of economic strife described that way, but it's a pretty good analysis.

For those who aren't familiar with the official definition of the term "Recession", the word describes a state in which a country has experienced two consecutive quarters of declining GDP (Gross Domestic Product) or, stated more broadly, two quarters of negative economic growth. Japan is presently in a deep recession, and the US has officially experienced one quarter of negative growth, but it's adamantly clear based on other indicators that the US is in recession right now.

Fortunately, Australia has thus far escaped this level of turmoil, and with the maintenance of the Liberal government, we could just make it through the Ansett collapse and global strife without falling so dramatically. What is clear, however, is that the war on terrorism and the damage done to consumer confidence has put the entire world at risk of plunging into recession/depression (at which time, marketers will remain increasingly interested in direct marketing campaigns than long-term branding efforts - suggested just to bring the thread back on-track).
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Old 11-12-2001, 07:10 AM   #11
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Quote:
Originally posted by Nintendo
A great CPS program is Amazon.com. Sales have gone way up since I started using there recommended links
Sounds good. I had a look at it and one thing seemed a little odd. In the FAQ, they ask you to email them if you want to use recommended links with different keywords on different parts of your site.

That is fair enough but the html that they generate for each link contains the keywords and everything so it's not as though there is any need for technical intervention.

Do you have any idea as to what their issue is with this?

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