Public and Private Affiliate Networks – which is worth your while?

The world of affiliate marketing has evolved so quickly in a span of a few years. Has your business kept up? If you are placing your bets on your marketing partners to push your business forward, you will want to read on.

When businesses consider affiliate marketing, often their first thought is on public affiliate networks – that’s how established they have become. The networks themselves have become a million-dollar business, as they have succeeded in developing a large network of affiliates, and thereby businesses. The larger they become, the harder it is to get around it – just like a social network. What is often forgotten, however, is the value in creating your own private affiliate network.

 

What’s so good about having a private affiliate network?

There are three primary benefits to owning and managing your own private affiliate network, even though it looks like more work at the first glance:

• More control
  Having a private affiliate network means having a direct contract with your affiliate partners. This direct working relationship leads to better control of whom you wish to include in your network, being more personal with your partners, and working together more intensively together. As you know your affiliate partners better this way, you also reduce the risk of partner fraud and quality over quantity of partners – for long-lasting partnerships.
• Lower costs
  Public networks often charge a network fee, as well as commissions. Depending on the network, this amount could end up amounting up to 25% of the total affiliate marketing budget. And working with a private network means you can skip all of this. Since there is no middleman, there is also no middleman fee. It would then be up to you, if you would like to use this money saved to invest in the top publishers or in other marketing activities.
• Data ownership
  Having a private affiliate network also means that the data of both you and your publishers do not lie in the hands of a third-party network. Why should they have the power to share these data with someone else?

As you see, there are clear advantages in building up your own private affiliate network.

 

Does it mean I shouldn’t work with public networks anymore?

Well, we don’t mean that either. Public networks have their advantages too. Especially since there are well-established public networks out there, they have a large pool of (relevant and non-relevant) publishers that businesses would otherwise not have known of. If your business is in its early stage, it could also be hard to expect requests to join your network to be flowing in.

It could be that what you need is a combination of both public and private affiliate networks. Our client Logitravel shows a great example of this, by having direct relationships with strategic partners through their private affiliate network, yet maintaining presence in public affiliate networks to reach out to partners they are not yet aware of.

 

What else do I need to consider?

Once you’ve made your choice to start your own affiliate network, the next natural step is to find out where and how you can do so. There are several technology providers in the market that enable you to do so. However, when choosing, you may wish to consider the following questions as well:

• Is tracking implemented on your domain? (Otherwise the data ownership benefit doesn’t count here.)
• Is your technology neutral? (If it doesn’t also sell media, it’s a rather good indication.)
• Can you monitor the performance of your public and private affiliate network on one platform?
• Does it allow you to incentivise your partners depending on their performance? (e.g. customise your commission models and rules for each partner)
• Does it allow you to communicate the changes in your network and ad media easily with your partners?
• Does it enable you to manage a voucher campaign with your partners?
• How easy or complicated is the partner billing process?
• Does it allow your partners to gain transparency over their performance and commissions?
• Does it meet yours and your partners’ expectations regarding user-friendliness, stability and reliability of the system?

After all, the point of an affiliate network is to help boost your business, be it by increasing brand awareness, leads, or sales. Its performance is best improved when you know which is strategic to your business. And you would know which is strategic to your business when you have an accurate analysis of your business.