Networks or Direct Affiliate Management?

[madferritacidburn]

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I have recently started at a new company who operate a number of different websites. 4 of these sites have affiliate campiagns in place (currently 2 on TD, 1 on AW and 1 on DGM).

I have been asked to look at the positives and negatives of stopping these campaigns and trying to run a direct solution with the best performers from each network.

Has anybody else tried this - if so how did it go? Or does anyone have any view, positives/negatives or things that should be seriously thought about prior to embarking on such a solution.

We could offer higher commissions, effectively splitting teh networks costs with the affiliates, which should be appealing, but there is also the side of having to get robust internal recording systems in placxe and wjhether the top affilaites have too much to deal with already, let alone a further bespoke system etc?

Any thoughts would be appreciated on this subject

Regards and Happy New Year

Matt

[scifind]

IMHO
The majority of affiliates will only use networks UNLESS there are extenuating circumstances (Huge brand, huge commissions, no competitors on networks already, big time USP by the company etc) simply as networks take a lot of the hassle out of reporting, collecting payment, logins, tracking reliability etc. (though they are not perfect)

I presume that the standing fees are not the concern - but the override, this is tricky.
Adding an extra 15% commission to the affiliates cut 11.5% instead of 10% may not be enough to swing a lot of the affiliates into promoting you direct.

Also don't forget your 'other affiliates' (ie not the 'best performers') as they are a very valuable resource and cutting them off at this time - and loss of accessibility to new, upcoming and other prime affiliates who have not yet seen your programs may ultimately do you more harm than good.

[madferritacidburn]

Thanks for this response - much appreciated.

We are a netwrok of Retail sites and hence pay a percentage of the product value to the affiliate. In a very low level example if our only product cost £100 and we paid the affiliate a commission of (for example) 15% then at the moment our costs would be £15 to the affiliate and £5 to (Tradedoubler for example).

Total cost £20, there if we could go direct with the affiliate the affiliate we could save money and improve our commission offering to them by offering 17.5% (for example).

This would be an improvement in commission of 16.666 % in my view? Maybe I have looked at this wrongly?

So do you feel that (if I am correct) that additional cash would still not be enough given the extra work that may have to be completed by both parties?

Regards and thanks

Matt

[scifind]

I was working on a 50% split of the 30% override that the network charges.
The whole thing pivots on what your stores are like and analysis of your current stiuation and why you are unhappy with it.
I presume that you are just thinking that the networks are not doing enough to warrent their override. Is this true?

It would be nice to know which sites you are talking about - you can post here or email me / pm me the details.

[drivetowin]

Scifind has covered it well

Unless you have a really unique product, then an increase in commission of 2.5% is not going to woo affiliates to you - after all if you now have an extra £5 on each sale 'going spare', why should you not pay all of that £5 to the affiliates?

Speaking for ourselves we only deal with merchants independently of networks when there is a really really compelling reason to do so (and more money isn't enough of a reason) - across our network of 57 sites we currently promote over 600 merchants - to deal with each merchant individually would just cost too much time - in my experience it is always the invoices to independents that end up being the ones you have to spend time chasing.

[Steved]

Also, don't forget the extra resource you will need to support the system technically, pay the affiliates and recruit new affiliates.

[darrensl]

Feel free to give me a call and we can discuss all this in more detail.

Darren
Online Marketing Solutions UK | SEO UK | SEO Company for SEO Services in UK
T: 08456342823
MSN: darrennewmark@hotmail.com

[Dave@Profitistic]

We had a merchant (sports retail) who launched with us and we sent decent traffic/sales to his site.

He then decided that he could avoid paying our (lack of) fees by approaching the top affiliates directly with slightly higher commissions. He actually didn't tell us he was doing this (we could have helped!) and left the network.

He came back 3 weeks later with a watery apology and asking if we could contact the affiliates to see if they would rejoin the promotion of the campaign.

Some did immediately, some did after time and some didn''t. Couple this with the 'dead' 3 weeks and the credibility loss andit's not hard to imagine what happened. He is clawing it back now (with our kind and sincere help), but he certainly took a hit.

Just an individual case, but it may help you...