Shady affiliate offers

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Alpha55

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Jun 17, 2007
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I'm seeing some pretty obscene affiliate offers out there and am wondering what their ploy is. Here is an example:

Health insurance broker offering $4.50 pay per click. Says conversion rate is "144%" with a footnote saying they average 144 clicks per 100 visitors (This means they're willing to pay for duplicate clicks apparently)

Paying so much per click is ridiculous right? If so how are these guys going to scam me? I figure that if they skim conversions for even a couple months by any significant margin it will be obvious to their affiliates what they're doing.
 


well i guess it might make sense because health insurance is almost $10 per click on google and probably similar on yahoo...so in essence they are actually saving money as long as you are not committing fraud... because they only allow you to put contextual based ads..
 
Are you serious... I can't believe google charges that much! I thought their motto was "do no evil" lol

EDIT I just did the math: $10 per click at 2% conversion (people actually buying something) would cost them $490 per sale. $4.5 per click would cost them $220 per sale. Insane!
 
I guess their scam is that they expect high quality clicks or they're not paying a dime.
 
That's a good point, but it goes agaisnt them paying more for clicks from the same person. What % does high quality traffic usually convert at?
 
I believe you don't actually get paid per click, but rather their numbers are based off their average earnings per click through sales/leads.

For example, if 5 clicks generated $100, then it would be $20 per click.
 
Alpha55 said:
Are you serious... I can't believe google charges that much! I thought their motto was "do no evil" lol

EDIT I just did the math: $10 per click at 2% conversion (people actually buying something) would cost them $490 per sale. $4.5 per click would cost them $220 per sale. Insane!
Click to expand...

well google doesn't set the price. people bid for those terms. i am guessing health insurance companies are profitable thats why they can pay $10/click and still profit..

mortgages for examples are anywhere between $25-$40/click...
 
Alpha55 said:
I just did the math: $10 per click at 2% conversion (people actually buying something) would cost them $490 per sale. $4.5 per click would cost them $220 per sale. Insane!
Click to expand...

They would still be making money though. Price out health insurance, and you'll find that it's very expensive. I used to sell it and the average family of four, cost between $600 - 800 per month.

So, even at a cost of $490 per sale, payout of $700 to the agent (125% commission) $600 revenue per month, they are in the black by the end of month 2.

Even better if the agent is on taking a cut of the monthly instead of a getting fronted 125% and risking a chargeback if the client doesn't stay a full year. Then their cost is only $490, plus $120 (20% recurring commission). Now, they're in the black by the beginning of month 2.

The commission structures and costs of health insurance varies from place to place, but those were rough averages that I was seeing around 10 years ago.
 
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