Paying affiliates to refer new customers to your website is the basis of every affiliate marketing program.
Though entering the world of affiliate marketing can be intimidating, there are many options available. When choosing to join an affiliate network or start your own, there are a variety of pros and cons to consider. The right decision for your business is dependent on the goals and available resources of your business.
Pros of Joining an Existing Affiliate Network
Reducing the cost and effort required, joining an existing affiliate network gives you and your business immediate access to publishers in your vertical. With no platform to build or maintain, most large programs have a developed and easy-to-use user interface. Providing a variety of online tools, an established affiliate network offers built-in options for tracking, maintaining, and communicating.
Convenient and cost-effective, an existing affiliate network provides fraud protection. Shady or poor-performing affiliate partners are regularly removed. Your business never needs to allocate resources towards vetting individual affiliates, an existing affiliate network does the work for you. The various features and options provided by an established affiliate network offer a quick and easy way to enter the world of affiliate marketing.
Cons of Joining an Existing Affiliate Network
Setup cost is the biggest con when joining an existing affiliate network. Paying someone to setup your account with an established affiliate network is often expensive. Generally requiring a deposit, a new account may require first time fees for a variety of items. Additionally, a network takes a percentage of your revenue or commissions paid. The percentage taken ranges from 1-2% of revenue or 15-25% of commissions.
Another con regarding existing affiliate networks is the loss of control over your affiliate marketing. An established network will allow you to customize a few items, but overall, the network will be largely organized by its owners. Any policies, rules, definitions of fraud, etc. issued by the network must be adhered to. If your business or brand wants to portray a specific image joining an existing affiliate network might not be the right option.
Joining an established affiliate network may also be detrimental to your business’s or blog’s search engine optimization (SEO). Links used to direct potential customers to your website will be redirected through a network’s site. Unfortunately, this method of tracking clicks can have an adverse effect on carefully crafted SEO. This is critical issue to consider before choosing to join an existing affiliate network.
Pros of Creating an In-House Affiliate Program
The biggest pro to creating your own in-house affiliate program is that it will belong to you. Providing complete control over your marketing efforts, your own program allows you to choose who you want to work with, how your products or services are marketed, what commissions are paid out, and a variety of other important decisions. Instead of worrying about policy and rule changes, you set the tone, brand, and methods used to run your affiliate program.
Another pro to creating your own affiliate program is the price. Often cheaper to build and use, you won’t be forced to pay any monthly fees to an existing network. Budget allocation for maintenance will still be needed, but, generally, an in-house affiliate marketing program generates more than enough income to cover any necessary maintenance fees.
The ability to create personal relationships with your affiliate partners is another plus to creating your own affiliate program. Your business will need to work directly with partners, carefully vetting each one. Maintaining a relationship is necessary and will most likely result in better, more targeted performance by an affiliate. With no middle-man, higher commissions can be paid to affiliates. Higher commissions or tiered commissions will attract better partners.
Cons of Creating an In-House Affiliate Program
Requiring a significant amount of effort, creating and maintaining a relationship with each affiliate in your personally crafted network is time-consuming. When choosing between an established network or creating your own, it is important to recognize the resource allocation that will be needed if you choose to create your own network. Though, business relationships are valuable, they are only developed with a continuous investment of energy.
Time is another necessity when creating an in-house affiliate program. A gradual process, building a program takes patience. If your business doesn’t have the resources to build up a program this isn’t an endeavor you should attempt. Requiring time to cultivate, poorly maintained affiliates can result in a low ROI.
Difficulty understanding metrics is another issue surrounding a personally crafted affiliate program. There are a variety of metrics to monitor performance and affiliate health. Requiring continuous updates, gauging the overall health of your program is necessary to fine-tune various strategies and performance initiatives. Understanding basic KPI’s and lifetime value (LTV) aren’t difficult to monitor, but do require some math skills. Providing insight into your affiliate program, if your business doesn’t have the resources to learn and monitor metrics crafting your own affiliate program may be a poor option.
A performance-based marketing strategy, affiliate marketing is dependent on promotional efforts. The crux of a good affiliate marketing program is its partners. Poor-quality partners or poorly developed partner relationships will result in a low-performing affiliate program. Depending on your available budget and resources, the type of affiliate program you use should reflect the goals of your business.
Whether you choose to join an existing affiliate network or create an in-house program, metrics must be monitored to ensure a successful, sustainable program.