Networks vs In House

[allaffiliatepro]

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I'll warn anyone reading this thread that it goes seriously off topic and devolves into a bit of a play ground.
Many thanks to those who contributed to the topic, your posts have been most helpful.
Note to my new 'best friend' - getting to know me before going off the handle would be advisable.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


Hello,
I've been looking at the advantages of using a network or going in house. Can you give me more points? What are your views?

Affiliate Networks
Advantages
· Affiliate pool to tap into
· Hands Off affiliate payment
· No software to maintain
Disadvantages
· Affiliates are not your own
· Do not have Affiliate contact details
· Your site is displayed to affiliates along side your competitors
· High monthly fees
· Large % takings from affiliate earnings
· Affiliate links do not go through your site
· Affiliate program must conform to inflexible affiliate network options

In-House Affiliate Programs
Advantages:
· You are in complete control of the program
· Affiliates are your own
· You have Affiliate contact details
· No commissions taken from Affiliate earnings allowing you to offer a higher %
· Small or no monthly fees
· Versatile and adaptable to your specific website needs
· Integrates with virtually any type of order system
· Offline affiliate tracking
· Affiliate links count towards link popularity
· Recurring commissions
· Greater tracking accuracy
· Private affiliate networks
· Advertise only your sites
Disadvantages:
· You must find your own affiliates
· Hands On Affiliate Payments


I'm sure I've missed things out.


Lyle Hopkins

[Chris Clarkson]

Hello,
and welcome to the board!

Quite a few of your points I would consider inaccurate,

Affiliate Networks
Disadvantages
· High monthly fees
· Affiliate program must conform to inflexible affiliate network options

I assume these points were written some time ago, as several of the UK networks have very low management fees. From our experience with Paid On Results, they couldn't be any more flexible or helpful.

In-House Affiliate Programs
Advantages:
· Recurring commissions
· Greater tracking accuracy
· Advertise only your sites

Again, recurring commisions are available and I doubt most affiliates would believe an independent merchant's statistics were any more reliable than a network. You'll also be hard pushed to find an affiliate who'll sign up to you exclusively, unless your commission was amazing!

I guess you posted this message with your own agenda, but I'd hate to think you'd mislead potential customers only for them to find out later that a network may have been the right choice for them given all the facts.

Sorry if that seems a bit harsh!

Chris

ps your sig url is wrong!

[Malcolm Cowley]

Hi

I agree with what Chris said and would also add that all merchants in most networks have access to contact their affiliates at will and some are in contact on a daily basis.

The competitor thing doesnt make sense as a decent afffiliate will find most programs in a genre anyway regardless of whether they are hidden or not - golden rule if its making big money then people will track it down if their interested in that area.

The percentage of earnings is variable but I could agree that in a inhouse program you could put more back to the affiliate but when you weigh up the man power of running your inhouse program and the resources then your overide to the network may look small in comparison.

Not sure on the monthly fees as we never charged for managment - we should really as I do shedloads for some of ours compared to what other merchants get for their money elsewhere but I dont think its justified so we dont do it even though others do.

On the advantages front you would be missing out the " I want an affiliate program - whats an affiliate " crowd

Myself and the other guys at networks in the UK will often have to handhold a merchant through from start to sale and then some and you aint going to draw on that kind of experience from a book - so even though some charge for it - working with a partner who knows the marketplace is worth its weight in gold and will save you a lot of trial and error .

Just my two penneth

ps what the hell its 3.41 am - been up checking programs are ok - you wont get that from your inhouse aff manager thats for sure unless its you lol and your an insomniac

[a4uforummember]

affiliate network is massive.

try 'in house' see how it goes,

if you try in house... try in house with, ''no network'', use affiliates directly', look at this forum, and PrivateMessage affiliates.

[justnozy]

ps what the hell its 3.41 am - been up checking programs are ok - you wont get that from your inhouse aff manager thats for sure unless its you lol and your an insomniac

Okay - so I'm weird !

No it's got to be horse's for courses surely.

Circumstances put me into an "inhouse" position,and its not over-rides. Of course no overider means potentially more for aff's - but if anyone used that with me as a sales pitch I would back off !

You cannot in all honest knock peoples "comfort levels" & expect them to react positively.

BUT - sometimes life, networks, aff managers, ideas do not always live up to expectations, so you need to look at alternatives.

Having said all that a list of pro's & cons on three threads sounds to me like a sales pitch - not a discussion - certainly from someone so close to the biggest G2G this year.

[Simon]

Not sure your approach is the best way to sell your software.

But I do wish you luck!

[allaffiliatepro]

Looks like I've stilled up a bit of a responce, not bad for a first post.

Calibration4U - I have to disagree, I don't see many of the networks with low management fee's. For example:-
CJ.com Setup fee- $2250
Annual fee- $250
Transaction fee- 30%
Monthly minimum fees-
$500
At the other end even affiliatefuture is £75 a month and 30% on top.

That 30% is the real killer it literally takes what would be a 10% affiliate commission and takes it down to 7%. 20% to 14%. That's a very large difference to any affiliate income.

Also due to the way they are stuctured compaired to an In House program a network will not be as flexible. I'm not saying they are not flexible at all, of course they want to offer features that their custoers as asking for. But in comparison to what you can do with In House software it would make them look inflexible. I don't think you'll be seeing features such as:-
CustomerID affiliate association - Greatly improved affiliate tracking when commissions are removed.
Offline affiliate tracking - Use coupon, access code, or subdomain systems so that affiliates can promote you offline.
Link Popularity increase - Search results benefiting from your affiliate links.
To name a few.

Advertise only your sites has got to be an advantage of running in house. With the new tracking feature such as CusotmerID affiliate association can really improve tracking. Of couse most in house programs aren't using this yet, but I'm sure they will all be following suit. From what I've seen in some of the forums some of the super affiliates actively look for good inhouse programs so they get a higher commission, and can even negotiate a bigger one.
Some of the networks have recurring commissions? I hadn't seen one with this before. Do they have scaled recurring commissions so you can give a different percentage for each rebill?

You can't expect an affiliate to signup to you exclusively unless you negotiate a special arrangement with them. Which is of course possible with in house.

I'm not trying to mislead anyone, I posted this message to find out what people thought. I personally believe in all the points I posted.

A lot of the customers I see have already had an experience with a network. It does put a lot of people off. I hear stories of them being told they must join the network for at least 6 or so months, to give the affiliates a chance to signup, by the end of it a lot of them end up out of pocket because the affiliates haven't signed up and they've had all the monthly fee's. This isn't the case for everyone who joins a network, but from what I've seen it's only the big names that really seem to survive on a network for a long time.


Perfiliate- "when you weigh up the man power of running your inhouse program and the resources then your overide to the network may look small in comparison." - I really cannot agree with this. Man power required to run modern In House affiliate software is very little. The minimum you need to do is run a few reports and a pay period at the end of each month. This takes less than half an hour. Any time on top of that you can spend promoting the program but that's optional. My larger clients with sites that already have quite high levels of traffic find that most of their affiliates find them from a simple link on their site.

I looked at your network and couldn't find any pricing. Have you adopted a similar strategy as AffiliateWindow by charging the client however much it looks like they can afford. I remember one of my customers was complaining than when he went to affiliate widnow for a quote for 2 separate sites on separate occasions he got completely different figures.

I mainatain some very close relationships with my affiliate customers. I let them know how affiliate marketing works, figure out what features would be best for them, can offer the services to do everything for them from setting up the software to designing them banners to use. I can also help them work on a strategy for finding affiliates, which in some cases even means joining a network for a short time.
When an affiliate finds you on a network at 14%, then sees your in house program is actually 20% they soon come over to your in house program.

At the end of the day I'm concerned with whats best for the affiliate and the merchant. An in house affiliate program is a low cost long term traffic solution. Which ever way you look at it, if there is reason to be on a network, there is plenty of reason to also have an in house program.

ps. Once your In House program is setup and in place you won't need to keep checking it

I'd better stop now I think I've probably written to much.

[allaffiliatepro]

justnozy - "Having said all that a list of pro's & cons on three threads sounds to me like a sales pitch - not a discussion - certainly from someone so close to the biggest G2G this year."

Not quite sue what you mean. 3 threads? I thought this was only one thread? What's the biggest G2G?

I want to thrash out a good list of points that people in the business (you guys) can agree on. Ok, I get the feeling not everyone will agree on everything (Me an perfiliate are from different backgrounds), but the good solid points should shine though.


Simon - Not trying to make sales here (although wouldn't mind http://www.allaffiliatepro.co.uk ), trying to learn from the affiliates and network people what makes them tick. I can understand the lure of many affiliates already being on a network associated with other programs (emphasis on 'associated with other programs'), and that you don't have to send payments. But is there anything more? Have people really been misinformed into thinking that running an inhouse program is a lot of time and effort?



Lyle Hopkins

[drivetowin]

Speaking as an affiliate who is a member of most if not all of the uk networks and also a member of a number of independent schemes I would favour network schemes every time for several reasons:

1. Networks make my accounting simple - I promote in excess of 850 merchants across my sites yet use of the networks mean I only have probably 15-20 places to chase for money every month - if I had to chase 850 for payment every month I'd need to employ a couple of people just to do that.

2. Networks provide functionality such as trackingids (essential for serious affiliates to track the effectiveness of different ads/pages/visitor shopping patterns) that I have not seen supported on many independent schemes.

3. Networks save me hours of scouring the net trying to find merchants with affiliate schemes.

4. Most (if not all) schemes have payment thresholds - if you sell widgets and I make 50p on each widget but have a threshold of £50 I need to sell 100 widgets before I get paid - but if you're on a network your 50p is part of a global total which means I can hit the payment threshold month after month no problem - which is essential for my cashflow.

5. Experience of independent schemes has shown tracking to be far less reliable than network tracking - I had one independent scheme who despite publically stating a 30 day cookie had the cookie time set to 1 minute - result - thousands of visitors to their site from mine but no sales.

And your maths aren't quite correct - the network takes 30% on top of affiliate commission so a 10% commission would actually become 7.7% to the affiliate - so 20% becomes 15.4%

[Malcolm Cowley]

Hi Lyle ,

I think you assume to much.

Ill have a go at responding to some of your points but I must point out at this stage that I am network , merchant and affiliate with a strong emphasis on affiliate so please dont think that I argue the network route as that is my bread and butter.

Ok -

" At the other end even affiliatefuture is £75 a month and 30% on top "

This is buttons for the amount of effort these guys put in with affiliates .

If you run your own in house program you seem to think you just sit back and run a report once a day and make the payments???

Your program will be how good? the potential of your program will be reached when?

Who's running the program no one?

I think you are maybe lumping the networks together in one group we dont all just sit there as a technology partner.

I dont see how the 30% overide automatically gets put back into the program for the affiliate - I know plenty of inhouse programs who have an appointed aff manager who costs in excess of £25K a year to run the program - we have many programs that are not worth that to us but receive far greater knowledge of marketplace and effort in driving the program to reach its potential in return for 25-30% overide.

" CustomerID affiliate association - Greatly improved affiliate tracking when commissions are removed.
Offline affiliate tracking - Use coupon, access code, or subdomain systems so that affiliates can promote you offline. "

We currently have many different tracking technologies in a live enviroment including offline - your research in this area seems minimal.

Affiliate exclusivity - This is very few and far between - take credit cards for example - which affiliate in their right mind would tie themselves down to one cc provider in favour of working with the majority - bit of a mute point you made there due to the % of affs who would do it.

" however much it looks like they can afford "

Lol you will find it hard to paint me black in here mate - our network has a reputation for being honest and up front - we dont take money willy nilly from clients and I turn down 4 or 5 a week as does Clarke et al at POR .

We charge no monthly fees - depending on value of area we charge between 20-30% overide and a set up fee if I feel we are taking a gamble - if a merchant pushes me for a gamble then they can pay their money to do so - if I know it will work Im not so bothered about putting a barrier in the way so sometimes we will look to accomodate the merchant in terms of this - our rate card is £2000 set up and its not on the site as whats the point its not like just cos you have £2000 that i we would open a program for you anyway as i said.

By the way out of interest is it free to set up an indy program ? :-)


" Me an perfiliate are from different backgrounds "

I'm not sure what this meant but please do not think I am knocking inhouse programs I use plenty myself and understand some of the benefits of them but out of the ones you have used to push your own agenda I only agree with certain points of one which is the flexiblity as no matter how flexible you are as a network it would be hard to compete with an indy program for on the hoof changes out of office hours.

[Simon]

"Simon - Not trying to make sales here (although wouldn't mind http://www.allaffiliatepro.co.uk )."

We are all here to make money, but are you sure your getting the votes on here.

"trying to learn from the affiliates and network people what makes them tick."

You might try asking, rather than telling. If you want to be educated then you should take on board the comments made to your post.

"I can understand the lure of many affiliates already being on a network associated with other programs (emphasis on 'associated with other programs'), "

It is the affiliates that make money for a merchant not the software, and as you say the affiliates are lurred by the networks.

"But is there anything more? Have people really been misinformed into thinking that running an inhouse program is a lot of time and effort?"

Most in house programmes do not take a lot of time and effort simply due to the fact that they will receive little affiliate take up, so yes people have been miss informed

[Tyson Pearcey]

Ok interesting point here..............

"Perfiliate- "when you weigh up the man power of running your inhouse program and the resources then your overide to the network may look small in comparison." - I really cannot agree with this. Man power required to run modern In House affiliate software is very little. The minimum you need to do I run a few reports and a pay period at the end of each month. This takes less than half an hour. Any time on top of that you can spend promoting the program but that's optional. My larger clients with sites that already have quite high levels of traffic find that most of their affiliates find them from a simple link on their site."

You have a very different approach of affiliate marketing then AllAffiliatePro if you only take the time to run a few reports at the end of each month. You obviously experience as you have clients.............. and ............. have been in business of a while as well (as I do believe I have seen your site around before). I would say though that I couldn't back your statement one bit as there is a lot more to Aff management than what you have stated. (Perfiliate spot on as per normal). But if it is down to just soft ware, then any old monkey can run an affiliate campaign as it would run itself/ optimize itself/ and effectively be intelligent. If you rely solely on your technology and little human effort I feel that you are not going to get the most out of your campaign. That is where you’ll need the experience of a good solid network to guide you along the way. However we all have our own models and ways of doing things so good luck to you and your future promotions on and off the forum.

Cheers
Tyson

A person who has never built a house before; then decides to build his own, in some serious trouble.

[Receptional]

The best thread for me to read yet. I see dilemmas and opportunities.

It seems to me that affiliates themselves are saying they prefer networks, according to this thread. I am surprised a little, but not totally. It may be partly a reaction to the way the thread was started, but if that is genuinely true then independent programs have a real disadvantage. It doesn't really matter which actually IS the best route, it is what is PERCEIVED as the best route by the affiliates. Affiliates are, after all, the hand that feeds.

That isn't going to make my life easier, sadly. But I learn a little every day.

Dixon.

[Rich]

For me everything comes down to trust. At the core you need to trust the stats you are given and that you will receive payment.

It is alot easier for me to trust a network as I know a lot of people are in the same position as me and that together we will be able to notice if things arn't going smoothly. But its not just networks. I also trust say the GreasyPalm independent program for the same reason.

Its harder to feel secure promoting an indie program, particually if you don't know of anyone else that is promoting them.

It is easy to see the 30% override as a pure cost and on some networks I would agree. But there are networks that will use part of that 30% to fund promoting your program to new affiliates and working with exisiting affiliates to make the program perform better.

Having said that, only having a few payments to track, a few central sets of stats to log in to, etc are all big advantages.

I think a comparison of inhouse or network from the merchants view will probably always seem to be in favour inhouse. But you need to combine that comparison with a comparison of inhouse or network from the affiliates view point to get the whole picture.

As I see it that will always swing towards using an active network as the best overall solution.

[SillyJokes]

This is an interesting thread.

We have both. Our original indy scheme and a network option for those who prefer this with POR.

We will not be dumping either of them in the forseeable future. They both have their place and their supporters.

As I said in the Internet Works article - everyday admin on the indy program is a piece of cake but for extra results more effort must be put in, but the same is true of being on a network - it's often down to the merchant to contact the affiliates and recruit more - so then what are the networks doing for their money?

In the early days I contacted a cheese merchant (no honestly I did) who was on with one of the networks. This guy sold cheese and was not technical beyond the use of rennet. He didn't employ an affiliate manager - he paid the network for that role. He expected the network to bring him traffic and sales and he was sorely disappointed and felt his money was wasted.

Therefore I suggest, whoever you go with, indy or network, if you are merchant you cannot sit back and expect that simply by paying the network you will gain business.