Do you find performance incentives, which many advertisers offer for their programs, confusing? Are you curious how they are calculated, if you have any, or how they are paid? Then this article is for you.
We receive a lot of questions about the performance incentives, which many advertisers offer in their programs. Explaining the specifics isn't exactly simple, so we decided to prepare this manual for you.
What are performance incentives?
Performance Incentives are extra payments to reward a better performance.
How do I know if the program offers performance incentives?
This information can be found in the program description and if it isn't there, it's always included in the Program Terms:
What are performance incentives based on?
The incentives tresholds are usually based on:
- the number of sales generated
- the total value of the sales
- the total value of commissions
How this looks in practice?
- POINT 1: The performance incentives are calculated separately for each calendar month
It's not that once you reach the incentive threshold, you have a higher commission from now on. Each month you start from the beginning and try to reach the incentive threshold again.
- POINT 2: The increased commission is due for the period in which you reached the incentive threshold
Let's say for example, the threshold is set on 1 000 Eur sales value per calendar month. If you earn 1 200 Eur in July, your higher commission will be calculated from these 1 200 Eur.
How are they calculated?
Let's continue with the same example. The program's commission is 8%, but if you bring sales over 1 000 Eur during the calendar month (July), you will get 10% commission instead of 8%.
The calculation process is as follows:
Your July sales have a total value of 1 200 Eur without VAT, so you are going receive 8% commission (you can see this amount in your July reports, for each individual transaction). So far you have 96 Eur (1 200 * 0.08) on your CJ account.
All orders have to go through approval process, which in our example is 60 calendar days. So you will see in CJ the final amount of the transactions approved by July by 29.09. (a transaction from 31.07. can be canceled until 29.09.). Only then you can see in CJ whether what is left is enough to reach the threshold for earning performance incentives.
Let's say you are lucky and none of your transactions are canceled. In this case, you still have enough to reach the threshold, and now CJ will add to your payment the remaining 2% of 1 200 Eur. Within a few days you will be able to see in the transaction report a new transaction, called Performance Incentive for the amount of 24 Eur (1 200 * 0.02). The sum of both amounts – 96 and 24 eur – is the 10% commission you have earned by reaching the performance incentive threshold.
When the incentives are paid?
It depends on each advertiser's terms and the way they approve transactions. Most advertiser choose Standard Locking Period, which means in practice that they can cancel each month's transactions by the 10th of the following month. Performance Incentives are calculated and added a month later.
Example:
All July transactions are approved by August 10th. In the second half of August you will receive the standard payment (without the incentives). The performance incentives are going to be calculated during the second half of August and paid with your September payment.
Some advertisers choose prolonged approval period of 60 calendar days. In this case, the transactions from 01.07. are approved by 30.08., the transactions from 02.07. by 31.08. and so on. The last transactions from July (31 July) are approved by 29.09. Only then the performance incentives are calculated and paid on your account. So there's longer delay, but everything is calculated automatically and you don't need to worry that your incentives have been forgotten or lost.
You can always find advertiser’s order approval period in the Program Terms:
EXAMPLE – STANDARD
EXAMPLE – 60 DAYS
Where I can see if I got any incentives?
You can see if you have earned performance incentives in your account in Reports – Transaction. As Action Type, select Performance Incentives, set the period of interest and click Run Report.
If you have any performance incentives for the given period, you will see them here:
If you have more questions about the performance incentives, please contact us at support@vivnetworks.com
