Carphone Warehouse reduce affiliates CPA by more than 50% for the Apple iPhone
Just as I predicted a few days ago, the Carphone Warehouse have announced (with 1 day until launch) that they are going to offer affiliates a lower CPA than standard for the Apple iPhone. Quite a lot lower as it happens, more than 50%.
The standard CPA for mobile phones on the Carphone Warehouse is between £45 and £60.
For the Apple iPhone its a measly £20.
So even though the iPhone costs customers far more (£269) than ANY phone the Carphone Warehouse sell, as most of its contract phones are free. And even though the iPhone minimum contract term is 18 months they still see fit to reduce affiliates commission?
Are they serious?
Apparently so. But wait, I get an increased commission rate of 10% (versus the standard 5%) in Apple accessories. Wow. And if I sell more than 150 iPhones in November then I will get a free iPhone. But lets just say I was on the lowest CPW tier of £45, the difference per sale between £20 for the iPhone and the standard rate of £45 is £25. So £25 x 150 sales is £3750. More than enough to buy 13 iPhones. Hardly a great incentive is it?
So come on Carphone Warehouse, why this terrible low CPA for such an expensive product?
If I were an affiliate promoting the iPhone I would use either the Apple Store who have INCREASED (did you hear that CPW? I said INCREASED) their commission from 3% to 4% for the 2 week launch period. Now I know its still only small change but hats off to them for any increase. Or more likely I would promote the iPhone through O2 who are offering their standard rate of £35 per application. Remember thats per application, not per sale like the CPW. So no reversals.
So how will you be promoting the iPhone? Take the poll below:
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Thursday, November 8th, 2007 at 6:55 pm and is filed under Affiliate Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Welcome to my blog. My name is Kieron Donoghue and I run UK Offer Media Ltd. I thought it would be fun to post a daily (well hopefully daily) blog, writing about my experiences in Internet Marketing and more specifically Affiliate Marketing. I'll include some personal stuff too, probably about my other passions, music and cars. Please feel free to post your comments and thoughts too.
November 8th, 2007 at 7:33 pm
Last week I stopped sending all my traffic to CW & The Phone Spot and transferred it to O2 instead. I’ve been losing thousands every month in reversals since TPS changed their terms this year and nothing annoys me more.
November 8th, 2007 at 7:46 pm
This is disgraceful mate - I really don’t get why they would do that, did it give any kind of reason in the email telling affiliates about the lower commissions?
A shame that yet again the networks (no idea who CPW use) lower the trousers and take it though - it shows that some care more about the merchants than the publishers who actually drive the sales and it’s about time that a network stood up and put their foot down on this kind of behavior.
November 8th, 2007 at 7:57 pm
A reader of your blog - I just wanted to add a post to clarify on the Carphone Warehouse Apple iPhone T&C’s! The CPW offer includes a bonus payment of £15 if the 150 target is met, which takes the overall commission to £35. We will also give you a bounty on your PAYG sales if you meet the 150 target - an additional £7 which takes the commission to £12, market leading and a nice earner in the run up to Xmas. One final point, we are absolutely committed to supporting Affiliates and so we are also offering Apple iPhone content to help you sell the product! We are, as ever, interested in affiliate feedback and I would welcome your views on this topic - either through this blog or directly. (Louise Mullock, Head of Online Marketing CPW)
November 8th, 2007 at 8:07 pm
Louise, even if we affiliates hit your target of 150 iPhones a month it’s still only a CPA of £35. Compared to £45 to £60 standard CPA with no targets attached.
Forget about PAYG sales, they aren’t the issue here. And while you are offering free content, thats nice but it won’t pay the bills.
So I’m still baffled as why one of your (if not the most) expensive mobile phones offers a lower CPA than your standard rate.
Surely you can see that this is a raw deal from an affiliates point of view? I can’t see any affiliate promoting the iPhone through the CPW unfortunately.
November 8th, 2007 at 8:15 pm
Cracking anaylsis of the 150 sales mate, and sadly its the same old story. If something has enough press coverage nowadays, some merchants see it as an opportunity to pay us affiliates less and keep more money for themselves. Thats business I guess.
November 8th, 2007 at 9:15 pm
We’ve been waiting for this baby to land now for over a year, and those of us with any sense will have built large prospect lists for very little outlay.
Think of it from carphones perspective - they’ve probably spent a fortune on promoting this product and everything in the media suggests Apple are taking the lion’s share of the profit on it, even some of O2s monthly customer spend! No wonder they can offer a couple of quid more…
I’m guessing carphone have little choice.
So I say let’s all grow up, stop grumbling about one of the best opportunities to come our way ever and make hay whilst the sun shines!!
Roll on iPhone II
November 8th, 2007 at 9:51 pm
O2 aren’t exactly being helpful either. According to the email I received : “All site copy, content and imagery must be pre-approved to promote the iPhone and recieve commission … Imagery will not be provided by O2 for promotion of the iPhone.”
It’s pretty obvious O2 and CPW know they’ve got the market stitched up and the hype machine will see customers flooding through the doors tomorrow evening.
November 8th, 2007 at 11:26 pm
It’s also worth mentioning that credit checks are not done on the iPhone prior to dispatch, so the normal signup method isn’t applicable.
Unless they have somehow found a way of tracking from sale to itunes activation and back to the contract, I can’t see how they can realistically treat the iPhone in the same way as any other model anyway.
To be honest, I’m surprised they are offering more than just commission on the handset itself - if everyone buying it does so purely to unlock it, cpw/o2 would lose a small fortune (not going to happen, obviously - but just demonstrating what I mean).
November 9th, 2007 at 1:11 am
Both CPW and O2 are demanding to see all sites that will sell the iPhone - get this - including anywhere banners are placed, I’m led to believe. I was going to blanket my 300+ sites with iPhone links to turn int into some kind of event, but maybe not now.
Apple Store may be paying lower per unit, but they don’t seem to be making us jump through hoops, and are my choice so far.
November 9th, 2007 at 3:33 am
I just got set up with the Apple Store. I’ll be pushing all Apple products, not just the iPhone, which is gonna be super competitive.
November 9th, 2007 at 10:13 am
No votes for CPW yet speaks volumes. However, a note to their defence re the page/content approval. James at CPW approved my stuff within the hour yesterday and it was into the evening hours, long after many other people would have been at home. Thanks CPW but I still need convincing to send my traffic to you.
Come on Louise, time for a re-think. Just think of the positive PR & exposure you’d get if you were to increase your commission to your normal rate .. go on, you know you want to!
November 9th, 2007 at 10:18 am
Just had another thought - what’s everyone’s take on banners not being available until after the launch? I’ve just checked the O2 product feed and it doesn’t include the iPhone yet either.
November 9th, 2007 at 1:20 pm
Hi!
Thanks all for your feedback. Regarding banners - they are available now in a variety of sizes, directly from your affiliate network contact. They’ve all been signed off internally, and although we do need to check how they’ve been placed, using the official copy will make acceptance much smoother!
Best regards and wishing you a successful iPhone launch day!
Jamie Brown
The Carphone Warehouse
November 10th, 2007 at 4:38 pm
To be honest, the annoyance here is the way the reductions were announced only 1 day before launch. I suspect the commission changes have been in the plans for ages. Yet the announcement is only made shortly before the launch to keep affiliates putting in the effort on their sites up until that time. Then come launch day, the affiliate thinks, “well I’ve put in all this effort, I may as well promote the thing anyway despite the rubbish commission.” It works for the merchant, but it’s unfair on the affiliate.
November 11th, 2007 at 1:28 am
I couldn’t vote Kieron.. you left off the “I won’t touch this with a bargepole” option
seriously I just won’t play the game when it’s clear it’s rigged from the outset like this, a limited distribution launch so prices are fixed and profit is maximised, on top of that there’s brand management meglomania on overdrive and commission rates at starvation rations.
I’d rather work with merchants that value what’s done for them everyday for every product and pay accordingly, don’t have a pedantic brand management approach boarding on Obsessive compulsive disorder and respect who they work with enough to communicate and pay a reasonable commission.
This product is a minimum £899 sale at £35 tariff or even £1259 !!! if the £55 tariff is selected, when everything is taken into account (ok except accessories too !), sure lots of that is hardware cost but there’s an 18 month commitment to a minimum of £35 per month in that and most people prepared to wedge out £269 and make use of the iphone aren’t liable to be the cost concious type that don’t go over their plan limits so those levels of measly commission are a complete and utter joke for this product, price plans, and contract length !
good luck to all those that do push it as you’ll make some cash but not as much as you should have done.
November 11th, 2007 at 3:17 am
It is sad that they not only did this in the first place, but they also waited until the day before to do it. I know there’s probably some lame excuse, but it was done so that everyone who had things in place could either dump all the hours they put into this or go with the commission slash.
No matter what though it is good to “out” merchants like this. I hope they learn their lesson from far less sales then they could have had before implementing this greedy scam.
November 12th, 2007 at 10:47 am
So what’s everyone’s experiences been with sales of this? I decided to ignore it, simply couldn’t be bothered!
November 23rd, 2007 at 12:07 pm
Hi Keiron,
I have it on pretty good authority that the margin in iPhone handset sales is pretty appalling. The benefit for CPW is the ability to sell the accessories as well as driving footfall to the stores - hopefully boosting sales of the similar (and free!) phones on offer on better tariffs.
I’m sure that knowing how Apple have operated on this deal from the start you can appreciate the fact that a third party retail partner such as CPW would be left out in the cold when it came to a decent margin - Apple are even putting the squeeze on the o2 and it’s other carrier networks after all to the tune of 30% of the ongoing revenues!
If you want to blame someone for this - blame Apple. They are even less willing to part with their profits on this - 4% on an iPhone sale is still less than £11.
December 30th, 2007 at 9:06 pm
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