Groundswell Publishing

Dead Horse Alert: Is Clickbank Shaving Commissions?

Posted on 09. May, 2009 by joefission in Affiliate Marketing, PPC

Yes, this subject has been beaten to death. Not a week goes by that you don’t read a forum where someone is discussing how Clickbank stole their commissions. And I don’t want to add to the drone, but . . . let me share some screenshots with you.

I’ll preface this by saying that these screenshots indicate a problem only, and the cause of the problem is undetermined. But one possible explanation leads us back to the topic announced every week: “It looks like Clickbank is cheating me!”

A Quick Intro to PPC and Conversion Tracking

If you’re unfamiliar with PPC marketing, here’s a quick rundown on the process so that these screenshots make more sense.

It usually starts with compiling a good keyword list. I usually end up with 200 or more keywords. From there, you create your ads and measure results. The goal at this point is to separate the dead keywords from the ones that convert. I usually keep the most profitable keywords only, and will even cut off the marginally profitable ones just to keep my overhead as low as possible. This keyword paring process usually takes about 45 days, during which time I also split test ad copy. 

After this process, I ramp up spending so that I triple my spend on the top keywords. Usually this results in anywhere from a 500 to 1000 percent increase in profits, because the overall campaign spend has been increased, and because I’m only focusing on 10 keywords or less, instead of over 200. The point is, what you see in these screenshots is the campaign during optimization.

To determine profitability, you can use conversion tracking. In this case, the Clickbank product I selected enables me to add my Google tracking ID to their thank you page. So on the front side, Google can tell me what was clicked, and on the back side, any of those clicks that reach the thank you page (a sale) will read as a conversion.

The Case of the Disappearing Conversions

Okay, so the bottom line is that the sales Clickbank says I make should equal the conversions Google says I make. If those numbers don’t match, there’s a problem. I should also point out that most Clickbank publishers do not offer conversion tracking, so what you see in these screenshots you won’t be able to find in most campaigns. That is, the problem might still be there, but it would be hidden from you.

Screenshot 1: Adwords

This cropped shot shows my Adwords campaign for this Clickbank product. The conversions reported here come directly from the publisher. That is, I pass them my Google conversion ID, and whenever any of clicks makes a purchase and reaches their thank you page, the number of conversions is incremented.

So according to this, I have 21 conversions, with an average conversion cost of $35.50. This is the startup / optimization portion of the campaign. Running this campaign for only those keywords that convert brings the conversion cost down to about $24. 

Screenshot 2: Clickbank

This cropped shot shows how many conversions Clickbank has credited me with. 

According to Clickbank, I made 13 sales, and they’re going to pay me commissions on this number. As you can see, for every three conversions Google shows (i.e. the number of people who reach the thank you page after a complete purchase), Clickbank actually credits me with two.

So where does the other 1 out of every 3 conversions go? That’s the question. Clickbank can’t or won’t answer that question. Any ideas?

Short-sighted Shaving

If Clickbank is shaving, it’s short-sighted. At a conversion cost of $24 and a commission of $32.50 (what this program pays), this is a profitable campaign. It’s not a home run, but I would still run with it and optimize it. This is only about 30 days of effort. If I tripled spending on only the top 5 keywords, I’d be looking at between 150 and 200 sales per month, and Clickbank would receive their 7.5% commission on each sale.

But as it stands, this campaign is losing me a couple dollars per conversion, so it will be dropped. For 8 large commissions (under $260), Clickbank bypasses 150 to 200 smaller commissions per month ($500/month).

That actually leads me to believe that Clickbank is not shaving. After all, how stupid would they have to be to make it this easy to find discrepancies? And how stupid would they have to be to cheat themselves out of ongoing commissions?

I don’t know the answers to any of these questions, so my action plan moving forward is to simply avoid promoting Clickbank products via PPC. It is just not worth the hassle any longer.

I’d like to hear your thoughts. Anyone experience anything similar to this? What else could explain these numbers?

Tags: Affiliate Marketing, clickbank, commissions, PPC, shaving