Do networks deserve their override?

[lurker]

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Very strange to see the magic 30% figure bandied around so much. I'm personally aware of many products where rival networks have had price wars + over-rides are 10% or 15%, I can also think of one particular network that I know take 50% of commission on a certain product, leaving the affiliate with only 50%.
It's a free market + any network taking too big a slice will sooner or later find a rival offering a better deal. If the merchant leaves a network with a monopoly on their brand then they give that network a license to take the p*ss.
We're still in a relatively young industry.

[pricethat]

It takes a lot of investment to make a network and one that affiliates can be "assed" with. I think the 30% is quite fair what they charge for the amount of work they put in. I think a lot of affiliates see simply a script and a machine which really isnt the case. I personally have seen hardware setups that make even a modest data centre look like something from the 80's and some of the most technical staff around permanently watching it 24 hours a day.

As well as this the cost of development, trial and error etc. And all of this has to be right before they even have a business of any kind. The day to day operating costs of offices and the needed flamboyant behaviour to woo new corporate clients, it all adds up. If there was any less then there would be a real shortage of top names in our lists as the networks would not have enough money to go after them.

Do some affiliates even realise the cost of getting some clients? a 50-100,000 pound project is not uncommon.

What i do think they need to do though is work harder on moving things forward now, with the exception of one network (sneeezes) we can safely say what the have is stable for the best part, there needs to be a more investment into more automated service for affiliates to allow them to get on with some real work. Even with data feeds for example, the average amount of time dealing with them is around 80% messing around and 20% marketing and that for me was only after 2 years of programming. A lot more needs to be done in other areas as well.

With a push forward this year i think the 30% will stay, otherwise lots of people will just come into the market at 20-25% with the same effective product. Whilst the networks have great staff they are not the only "nice" or "great people" in the world.

[helsby]

The networks that provide 360-account management, and develop communication between affiliates and merchants probably do earn their fees.

However, its affiliates that want to keep merchants at arms length that use networks....and its merchants that can't deliver a strong affiliate proposition of their own, or want a quick-fix, that use networks. Yes there are exceptions, but it is affiliates that view the customer as their own that demand custom attention (and use direct programmes), and in this the networks tend to fail, and not justify their fees.

The barrier to using networks (as a merchant) is that any chance of developing scaled rewards to affiliates is hampered by the add -on cost of the network fee. If a partner jumps from £2k a month to £200k it is invariable because the merchant has worked damned hard with the affiliate to develop sales. So where does the networks right to a 30% cut on this effort come from?

Networks are obsessed by big numbers, and as a consequence dilute the quality of their added value. However, as long as some affiliates want to be able to jump on what ever the latest quick buck is, there will be a place for networks.

[pricethat]

The networks that provide 360-account management, and develop communication between affiliates and merchants probably do earn their fees.

I do not need to communicate with a merchant to feel like a network is any less due the money to them. The whole benefit of a network to many affiliates is that they dont have to talk to each and every merchant, the networks can do all that rubbish for us.

However, its affiliates that want to keep merchants at arms length that use networks....and its merchants that can't deliver a strong affiliate proposition of their own, or want a quick-fix, that use networks.

I really disagree, the main purpose benefit of a network is consolodation, one central platform (or a few) where affiliates can go to collect merchant information, and collect statistics in a way that can not be offered by merchants directly for a direct return. For each merchant to offer the level of specific support or experience in affiliate marketing, user interfaces, staff members, uptime and all the rest it would cost them almost as much as running a network themselves, this is not cost effective and therefore all the more reason to use a network. Then add the tens of thousands of pounds to get their affiliate scheme off the ground in terms of marketing its a kind of no brainer that they SHOULD use a network, not because they are unable or cant deliver...what kind of an idea is that?

Yes there are exceptions, but it is affiliates that view the customer as their own that demand custom attention (and use direct programmes), and in this the networks tend to fail, and not justify their fees.

If the merchant is happy to pay them then surely that is all the justification they need? Seperately affiliates may not feel inclined to work with a merchant without third party tracking, i do not work with merchants directly because the rule of sod will dictate they will mess around, mess things up or all the rest of merchants balls ups, at least with a network there are hundreds more people like me to verify when things go wrong.

The barrier to using networks (as a merchant) is that any chance of developing scaled rewards to affiliates is hampered by the add -on cost of the network fee..

There would probably not be that reward anyway by the time the merchant had to spend more money managing all the different rewards and tracking of such anyway when they number crunched it all down

If a partner jumps from £2k a month to £200k it is invariable because the merchant has worked damned hard with the affiliate to develop sales. So where does the networks right to a 30% cut on this effort come from? ..

I am sure an affiliate can earn that kind of money without the help of the merchant, seperately i would say that an affiliate it less likely to be able to achieve those figures as the amount of tools or reports that are available to them decrease. Removing the network from it would probably not assist the affiliate in achieving those figures but work against them.

You make it sound like the merchant did all the work and the merchant shouldnt have to. Working with a network is the start, not the end. Maybe the merchant worked very hard with individuals, however the individuals probably would never of known how hard the merchant works unless the network existed. I certainly know much greater finders fees than 30%. It costs tens of thousands of pounds, affiliates hate to feel like they are a number but it costs hundreds of thousands of pounds to build up a community of numbers. The networks did that by working hard to let you know they were there, you may think that you was an affiliate and you found them so its no cost, its rubbish, they do deserve a return on their investment.Return on 250,000 software does not come back from 15% or 20% it comes back probably from that last 5% and its probably that 5% bracket that banks and investors rely on when considering future ventures.[/QUOTE]

Networks are obsessed by big numbers, and as a consequence dilute the quality of their added value. However, as long as some affiliates want to be able to jump on what ever the latest quick buck is, there will be a place for networks.

So your definition of the majority of affiliates that use networks is a bunch of people that want to jump boat on to whatever is the latest quick buck. Charming........ So we dont use them because it makes our life much easier, we dont use them despite the money they charge the merchant to handle all payments, program enquiries, we dont use them because they stay awake all night to make sure things are running smoothly, we dont use them to deal with the creatives, we dont use them to deal with managing all the setup in technical tracking, we dont use them to shout at when things go wrong, plus the other hundred odd reasons......... I think the few i listed quit justify the 30% but even then its erroded in many cases already as networks fight to keep their levels.

If the value around is 30% it is because it is market value, or all the networks feel that is what it is worth to do the job, with every less penny we get even less back as affiliates.

[pistol101]

I think we need to charge more then we can have sugar and i can get paid

[drivetowin]

See what happens - you let them have an office with daylight and next they want the world!!

[pistol101]

The sugar is purely for the affiliates...Jason wont come and visit us anymore becuase of it!

[Qui Gon Jinn]

Blimely this is going back to Limo club days ... Are beverages like tea & coffee still being served out of jam jars or vases?

[pricethat]

Blimely this is going back to Limo club days ... Are beverages like tea & coffee still being served out of jam jars or vases?

Last i heard they were rolling a4 peices of paper into cups.......beverages however have been renamed to "affiliate executive bonuses"