How do competition websites make money?

[khalid]

Hi,

I've seen many (especially American) networks offer revenue of over $2 for a "cost per lead". (I noticed one wanted you to download a toolbar so I get how they'll make money.)

I've also seen many UK competition sites offer £50 to win a car etc

How are they making money?

Are they selling the data...if so, to whom? Or can anyone explain to me how these sites actually work?

Examples from paidoffers dot co dot uk includes;

"Enter this price draw to win a car and get £50"

"Take LOVEFiLM's Free 30 Day Trial For £70.00 "

"Join OfferX, Potentially Win £15K Cash & Get £30.00 From Us Too! "

...I am clueless as to how this work and really interested to know more.

 

[Retired_Member42]

It's a mixture of CPL / CPA. Paid offers will make money for selling your name / address and also when you purchase something via one of their offers be it product / service trial etc. To make any money on Paid Offers you need to complete ALL of there offers before you can cash out. 26 of them. There are offers you can simply fill in your details to complete but some require you to register for trials e.g. Love Film and some actual product purchases too. I'm guessing once all 26 are completed Paid Offers are paid £X in total and pass a % of it onto you.

 

[Edwin]

If you read the PaidOffers faq extremely carefully, they never state that ALL the offers themselves are free. However, they do state that you have to complete all 26 offers to get paid.

My guess is that somewhere in the middle of the 26-offer chain they start introducing offers that cost money to participate in, but people get sucked into paying for fear of losing the money they've "made" up until there (e.g. if there's £700 "on the table" already, people may be willing to spend money here and there for fear of losing that £700).

Presumably over the whole 26 offers, what they (PaidOffers) make in affiliate fees for supplying leads and trial signups adds up to more than what they pay out. If indeed they pay out much at all.

Note: I am not suggesting for 1 microsecond that they won't honour payments - this is nothing to do with the company's reputation - I am simply saying that there is no way to see from the outside (without joining the site and completing the offers) how much ALL 26 are worth, so it may be even the users shown at the top of the leaderboard on the front page haven't completed sufficient offers to get paid (yet).

An example might make that clearer: if all 26 offers generate a total of £2,500 in kickbacks to users (we have no way of knowing the total) then none of the users have reached the magic number to get paid yet.

 

[Edwin]

It could also be that the closer a user gets to completing 26 offers, the more expensive participating in the remaining offers becomes i.e. not all users are necessarily seeing the same 26 offers in the same order. That's another way to boost commissions to the max, and keep the number of payouts down.

 

[Retired_Member42]

You have to complete all 26 offers in order also, you can't view them all at once. Perhaps offer 26 requires you to spend £1,000 which may seem attractive to keep the £1800 or whatever you'd made. If nobody does it PaidOffers get paid on the other 25 offers prior and you don't earn a penny. Good work if you can get it

 

[khalid]

Thanks for the explanations so far. I get the jist with Paid Offers, but what about general competition sites where all you need to do is enter some personal details.

Are they selling your information on? If so, to whom? I can't see to find a company online buying data...they're all selling

 

[Retired_Member42]

There are lots of companies who'll pay you for a name/address in a given niche. Just look how many e-mail submit offers are out there for $1/$2 a time. The payout PaidOffers for example offer for this is not related to how much they're paid from the merchant. They offer their members £50 for something they'll only get paid £1 on as it's a lure to the next step which they'll get paid more on and so on. Across all 26 offers they'll make a lot more collectively than they pay each user and if someone bottles out on offer 26 they'll have money on all 25 offers previously without having to pay the user a penny.

 

[khalid]

There are lots of companies who'll pay you for a name/address in a given niche.

Who?

 

[Retired_Member42]

It depends on the niche. If you just want to sell an e-mail address for $1/$2 a time there are literally thousands. PeerFly offer quite a few http://www.peerflyoffers.com/search.php?keyword=email+submit or http://wolfstormmedia.com/ or even see what's being offered via offer vault - http://www.offervault.com/email-submit

For the higher paid ones you'll need name/address/d.o.b e-mail but lots of affiliate programs in all niches offer CPL instead of CPA with CPL literally just being the contact info of the interested party, regardless of sale.

To go back to PaidOffers again, on completion of the first offer, along with your personal info, you're asked if you'd be interested in specific products / services etc which will then be used to decide who to send your info to. 20 or so options. With CPL you can send that lead data to all 20 of the companies asking the question based on what's selected and you'll be paid.

 

[Retired_Member42]

Going back to PaidOffers, I just tried offer 1 on a throw away e-mail address and on submission it looks to have pinged several survey sites with a registration such as mysurvey.com. Whether they pay $X for each sign up confirmation or you earn if the user confirms I don't know but the ping list could be huge. I'm guessing most of the competition sites that simply require you to enter an e-mail to earn directly will literally just be pinging however many sites with sign ups and your either getting paid for each or when they participate. Given that they're free I would imagine the sign ups to be significant.

 

[jdswansea]

It's all about generating leads and collecting data. Tbh I've not seen paidoffers before - but have seen similar and the way they work is described above.

Competition sites - e.g. MyOffers, GetMeATicket are slightly different - but the goal is the same. Hook people in with the chance to win a car or prize and bank their data.

Now a lot of people will look at a site and see "win a BMW, win an Audi, win £10K" etc - and think "wow, three prize draws".. yet the terms will show there's in fact one prize of either the BMW or Audi or £10K! However, average punter will have given three lots of data to the site and whoever is after the leads.

Oh yes - sometimes these prizes will also appear on another site - punter may think "more cars and cash to win" - but in fact it's still the original one prize.

From the other side of the fence, folks who love competitions hate these kind of sites. Weirdly freebie people seem more responsive - and folks less in the know are more than happy to have a go.

My advice - for what it's worth - if you're getting involved in competitions - collect as much data as you can. Don't ever consider running a free listing of comps around the web site!

8)

Jason