New try, Networks vs In House

[allaffiliatepro]

Hi All,
For those of you that remember, I started a thread like this last year. It was very entertaining, but went way off topic.

Now I'm going to give it another try. I've got an updated list, and I'm going to give a bit more explaination from the start.


I'm trying to thrash out a list of advantages and disadvantages of affiliate networks and in house programs.

In this post this is from a Merchants perspective, not an affiliates. So please would all merchants reading this thread give me your views.

There are fundermental things that in house and network people aren't going to agree on, let's not argue about it.

This list is for a new internet marketing site I will be releasing toward the end of this month. Those that are most helpful will be offered free access. The site is covering everything internet marketing related, not just affiliate programs.


So here is my current list. It may look a little biased if your a network, but don't forget I'm in house. I'm trying to create as fair a list as possible.


Affiliate Networks


Advantages
· Affiliate pool to tap into
· Hands off affiliate payment
· No software to maintain
· Network branding can increase trust
· They deal with affiliate requests

Disadvantages
· Affiliates are not your own
· You do not have full Affiliate contact details (if any)
· A lot of competition on the network
· High monthly fees
· Large % takings from affiliate earnings
· Affiliate links do not go through your site
· Affiliate program must conform to often inflexible affiliate network commission structures
· Any affiliate program promotions are on behalf of the network, not your program individually
· Leaving an affiliate network usually means loosing all your affiliates


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
· Potentially greater tracking accuracy
· Private affiliate networks
· Affiliate program only advertises your sites
· Any affiliate program promotions are specifically for your affiliate program, not for the benefit of an affiliate network as a whole
· Can be fully scripted into dynamic sites

Disadvantages
· You must find your own affiliates
· Hands on Affiliate Payments
· You deal with affiliate requests



Let me know what you think is right, what's wrong and what's missing.

Remember this is from a merchants perspective, I'll do a post for an affiliate perspective later.


Stay Calm!

[matbennett]

One disadvantage of an in-house programme that seems to have been missed is that many affiliates will simply not deal with independent programmes.

[pistol101]

Looks a good start. You'd probably do yourself wonders if you had some links to explain the points further.

For example:

-Large % takings from affiliate earnings - Yes there's a surcharge, but you should note what the breakdown of the charges involves. For example on AffiliateFuture of the surcharge your getting affiliate recruitment bonuses, bandwidth on the adserving & cost of commission payments.

-Put some real life situation - Can they cope with an affiliate creating 100s of accounts overnight with false details, forging IP addresses, referals and putting through hundreds of orders.

or the affiliate putting up every banner you own on one page and then buying millions of pop-unders!

-High monthly fees. Some of us cost less than the independent programmes you can buy!! Do a comparision page.

And the biggest disadvantage of an independent system is that you need to have someone who knows how to make sure the system works on days when Microsoft release new patches and block cookies, banners, urls.

I've found another site that i think is doing something very similar to you, i'll see if i can dig out the details. Shout if you need any help.

[BenKowaBunga]

Just a comment.

You say 'You deal with affiliate requests' is a disadvantage of an inhouse system...is it? Would you rather rely on a third party to deal with your affiliate requests? Wouldn't you like to keep your finger on the pulse of what your affiliates want and what they ask for?

Yes, it's extra work, but I don't think it's a disadvantage.

Also, just to keep things balanced - on the other side you say a disadvantage of a network is 'Any affiliate program promotions are on behalf of the network, not your program individually' - when an email is sent to a merchants affiliates within a network promoting something, how is that NOT promoting your program individually?

[moogie]

One of the biggest advantages is the fact networks are used to dealing with both merchants and affiliates; I think the word is 'experience'. Pete pointed out the fact that the best networks vet their affiliates before they are allowed to promote their merchants. Believe me there are some very smart people out there who will rob you blind before you know what has happened.
Okay there are the overide fees, but this should be taken into consideration when you set your acquisition.

The best affiliates have a great working relationship with the merchants and this is passed on in the form of positive PR. You only have to work with Mal at Buy.at to appreciate this. We have introduced a few big programs with them and his PR work has introduced some excellent affiliates. Without that sort of positive PR the programs would not of done as half as good – Fact.

Affiliates are a close-knit community and word of mouth soon gets around. If you have no network back up and something goes dramatically wrong with your program you are in it up to your neck. Who is going to sort that one out?

All the networks have a technical knowledge second to none. Ryan (AW), Paul (Buy.at), Clarke (POR) just to name a few are experts in what they do. If there is a problem and quite often there are, you need these guys to act quickly to resolve the problem.

With the industry changing what seems almost daily you need to the networks to be at the sharp end to implement any new ideas and technology. Going it alone can be costly and unless you have the correct people and technology in place you are out in the cold.

Good luck!!!

[BenKowaBunga]

There are two different inhouse/independent programs;
Those that are hosted, maintained, customized and supported by the merchant...
...and those that are hosted, maintained, customized and supported by the software company.

[allaffiliatepro]

This is looking good.

matbennett - added to the list.

pistol101 - I'm always happy to get help. I'll put explainations on my site, popup ? marks should do the trick.

BenKowaBunga - Your right. I'll change it more imte consuming, and add that to the positive.

'Any affiliate program promotions are on behalf of the network, not your program individually' - when an email is sent to a merchants affiliates within a network promoting something, how is that NOT promoting your program individually?

I mean when a network is promoting to signup new afiliates to the network, not promotions to affiliates they already have. That's covered by 'Affiliate pool to tap into'.

moogie - Good point. But it would depend on who you buy your in house affiliate software from. The top software developers have unrivaled technical knowledge of how track, etc works as they have written the code themselves. They'll know exactly what's possible, and what to avoid. Depending on the company they can offer all kinds of support with your program. I know that I give free tech support to my customers and give all kinds of advice. I'm building guides and tutorials for my customers to help them through and answer any questions I get. I can't speek for other in house developers. I doubt you get the same level of support from low cost or budget solutions.

If you have no network back up and something goes dramatically wrong with your program you are in it up to your neck. Who is going to sort that one out?

Depends on who you got your affiliate software from. I know for a fact I drop everything if any bugs or security holes surface in AllAffiliatePro, and get everything fixed ASAP. I pride myself on the quality of my software.

By the way, when version 5 finally lands (hopefully next month) I'll be offering a free copy to one merchant who is active in this community. Anyone who's interested in helping with the development can PM me.

[km8]

Originally posted by allaffiliatepro Affiliate Networks Advantages · Affiliate pool to tap into · Hands off affiliate payment · No software to maintain · Network branding can increase trust · They deal with affiliate requests In-House Affiliate Programs Disadvantages · You must find your own affiliates · Hands on Affiliate Payments · You deal with affiliate requests Let me know what you think is right, what's wrong and what's missing. Remember this is from a merchants perspective, I'll do a post for an affiliate perspective later.

Stay calm! - I like your style!

OK, I'm speaking as an affiliate but I suggest that if affiliates see advantages and disadvantages, that's relevant to merchants too - so I'll add my tuppence (if you don't mind ) It seems to me that the object of an affiliate program, indy or network, is to recruit affiliates.

As an affiliate I'm far (and I mean far) more likely to join your program via a network.
Why?
- It's easier to find you in the first place
- I get a single cheque (provided you don't join LinkS***e) oops, for the sake of clarity, the missing letter are not h*t
- I'm dealing with a known quantity. ie, I trust them as far as I trust them, whereas with an Indy, I just don't know.
- I can see 20/50 merchants performance at one login, not 20/50 logins and time is money
- The network has an interest in seeing that the program is fair, it tracks, pays on time, etc, which just hapens to coincide with my interests

OK, there are disadvantages too (from an affiliate point of view):
- I'll have more competition to deal with
- Ummmm? - OK, that's all I can think of

Maybe the best course is a combination - network and Indy.
If you perform on the network, I can find and screen your program via the netword, then move to the Indy program if there are benefits for me as an affiliate, once I know your program performs.

Actually, maybe that's a benefit for you too - the network does the initial screening, compliance checking (except LinkS***e), etc - then you invite the winners to the join the Indy program?

OK, they're just some thoughts - remember what the man said, Stay Calm!

KM8

[drivetowin]

As someone who as well as being an affiliate also runs a merchant programme independently and as part of a network (AF) let me comment on these



Affiliate Networks

Disadvantages
· Affiliates are not your own

True - but not exactly sure this matters

· You do not have full Affiliate contact details (if any)

Depends on the network

· A lot of competition on the network

Depends on your offering - if your offering is unique you have no competition

· High monthly fees

Depends how good you are at negotiating - my network monthly fees are extremely low

· Large % takings from affiliate earnings

Again, depends how good you are at negotiating

· Affiliate program must conform to often inflexible affiliate network commission structures

Havent yet found a commission structure my network cant cope with

· Any affiliate program promotions are on behalf of the network, not your program individually

Not true - I can issue an email to all of my affiliates via the network interface

· Leaving an affiliate network usually means loosing all your affiliates

True - but then you should look on the whole merchant/network/affiliate relationship as a long term thing imho


In-House Affiliate Programs

Disadvantages
· You must find your own affiliates
Takes hours and hours of sweat and toil
· Hands on Affiliate Payments
Takes hours and hours of sweat and toil
· You deal with affiliate requests
Takes hours and hours of sweat and toil (sure you're spotting a trend here)
- add

When the tracking goes wrong you have to fix it
When an affiliate queries why a transaction has not tracked - you have to deal with it
When an affiliate places fraudulent transactions - you have to deal with it

To put it in perspective, managing my affiliates via the network (and I have about 100) takes me less than a couple of hours a week

Managing my independent affiliates (and I only have a handful) takes me about 15 hours a week

For me, having experienced both scenarios, network wins hands down every time

[SillyJokes]

I suppose I should throw in my opinion here.

Networks do not deal with all the queries affiliates have, particularly minor affiliates, by which I mean 90% of them. Affiliates still contact the merchant direct with some queries which means the merchant must deal with them. The point i'm trying to make is, having a network does not mean zero input from the merchant.

You pay the network and you still have to do the work if you want the program to succeed.

I've always felt a lot closer to 'my' affiliates. I have either found them or they have found me. Effort has been made and therefore they are far more likely to actually put finger to keyboard and promote my site, rather than sign up to every single merchant offered by a network.

Having a network does not mean you have a lot more productive affiliates. I have more productive affiliates on my indy than on my network. The network has a higher proportion of people who sign up and do nothing.

For a smaller merchant I would think one of the few advantages of a network is that some affiliates prefer to be with networks for the reasons detailed above, however in my experience I had affiliates who were doing fine on the indy who moved to the network when it was introduced and are now costing me more. If I never had the network I suspect they would have continued with the indy.

Another major advantage, if a rather miserable one, is that the likes of Kelkoo and Pangora prefer to work with a network and it is difficult to work with them unless you are on the networks they are prepared to work with. Therefore remember this when picking your network if you plan to promote your site through these channels.