Affiliate programs
Affiliate Marketing is based on the classic sales-partner idea. A company makes all their advertising information on their products available for their sales associates, and the sales associate uses that information to acquire purchases for the company. In return, the sales associate gets a commission on every lead or sale they make. In Online Marketing, this is called an “affiliate program”.
Merchants offer affiliate programs to people – called publishers – who want to sell their goods. Those publishers are allowed to incorporate the merchant’s advertisements into their own pages or newsletter and get a commission for all leads or sales they make.
Affiliate programs can be offered either through an affiliate network (public affiliate network) or be organized and managed in-house (private affiliate network).
Offering an affiliate program through an public affiliate network
An affiliate program can be provided using an online affiliate network. These networks act as mediator between the merchants and publishers; they allow merchants to use their software and handle the commission payments to publishers. They also give the merchants detailed statistics on all sales and leads. Merchants pay a fixed percentage rate of commissions to the affiliate network for these services.
In-House affiliate programs
Merchants do not have to participate in public affiliate networks; they can have an in-house affiliate program. The process is basically the same, the only difference is that the merchant controls the entire process using their own software. The merchant is also responsible for all the accounting of leads or sales and payments to publishers.
The different affiliate software is dissimilar in the usability, clarity and variability of different software statistics. It is, therefore, very important to clarify all the requirements needed before selecting affiliate software.
Should you participate in an affiliate network or do it in-house?
The decision whether to manage the affiliate program using your own software or participating in an affiliate network depends on the merchant’s individual needs.
One advantage of a network is that there are already many trusted publishers participating in the network. Also, the set-up of the program is very easy: The affiliate network staff help merchants set up their programs and answer any questions along the way. However, one downside is that the data about the affiliate program is disclosed to all network operators. For merchants concerned about privacy, this solution may not be the best.
An in-house affiliate program takes much more technical and organizational effort on the front end and throughout the project. The merchant is responsible for getting the software set up and working correctly as well as all the accounting issues that may arise. However, all data remains in the company. Another advantage is that affiliate links will have a positive impact on the SEO ranking if they are implemented correctly.
