How To Manage Affiliate Program

 

Affiliate Program Management in 2024

In 2024, the landscape of affiliate marketing continues to thrive. Despite the evolving digital landscape, affiliate marketing remains a lucrative avenue for businesses. Recent data indicates a significant surge in global digital advertising expenditure, with projections suggesting a continued upward trend. According to WARC, the expenditure on digital advertising surpassed $560 billion in 2018, with forecasts anticipating a further 13% increase by 2022.

The trend towards affiliate marketing shows no signs of slowing down. Companies of all sizes actively engage with affiliates, recognizing the potential for expanding their reach and driving sales. Notably, smaller brands and newer products are increasingly embracing affiliate marketing as an integral part of their promotional strategies. This has led to a more competitive environment within the industry, with affiliates vying for partnerships and businesses seeking innovative ways to collaborate effectively.

What factors contribute to the widespread consideration of affiliate marketing among product owners in 2024?

It's quite straightforward. Affiliate marketing serves as an effective method for product promotion through partnerships with affiliates who drive sales via their online platforms. Essentially, it divides the tasks of product creation and promotion, akin to outsourcing parts of marketing efforts. The advantage for owners is clear: they can enlist numerous promoters and compensate them solely based on actual results, making it a cost-efficient approach to marketing.

Who is involved in affiliate marketing?

-Advertiser, The advertiser, who owns the product, also serves as the program owner, overseeing the affiliate marketing initiative.

-Affiliates, Additionally, publishers, or partners, play a crucial role in affiliate marketing. These affiliates are responsible for promoting the products of advertisers. Publishers employ various methods to promote products, such as leveraging landing pages, social media platforms, email lists, writing product reviews, displaying ad banners, offering coupons, and more.

-Affiliate network, An ad network or agency acts as an intermediary between advertisers and publishers in the affiliate marketing ecosystem.

-Customer, The online user who discovers the product online and makes a purchase is often referred to as the customer or the end consumer.

How do you get paid in affiliate marketing?

Before finalizing your partner program, it's crucial to grasp the various affiliate commission structures commonly used. Understanding these will aid in selecting the most suitable payment terms for your publishers.

CPC (cost per click) - a payment model where affiliates are compensated based on the number of clicks they drive to your product website. This model is widely favored by bloggers and affiliates with high-traffic websites. For them, it's advantageous because they aren't required to make sales; their sole objective is to drive traffic to a page, which can be accurately measured through clicks.

However, CPC is susceptible to fake clicks, which artificially inflate click numbers through unethical practices like 'bot clicks' or employing low-paid workers to click on ads repeatedly. Fortunately, there are numerous solutions available today to combat this type of fraud. If it's proven that clicks were automated, such as an unusually high volume from the same source, advertisers have the right to reject payment for this traffic.

CPM (cost-per-mile) - refers to the cost per one thousand impressions of online users with ad banners. In affiliate marketing, this model allows advertisers to pay for a specified number of impressions rather than clicks or conversions.

Due to the nature of CPM, where only a fraction of impressions leads to conversions, it may not be suitable for all ad campaigns. However, it's particularly effective for brand campaigns, enabling advertisers to gauge the reach and exposure of their brand to a wide audience.

CPA (Cost per acquisition)- The CPA (Cost Per Action) payment scheme has maintained its popularity over the past few years in affiliate marketing. In this model, affiliates are compensated for specific actions such as sales, leads, installations, or registrations, with the commission determined by the program vendor.

CPA-based pricing is particularly favored by product owners, companies, and major brands seeking to promote their products. It offers benefits to both affiliates and advertisers. Affiliates stand to earn higher commissions compared to PPC (Pay Per Click), while advertisers benefit from a more dependable payment structure tied to specific results.

Moreover, the CPA model is preferred by many affiliate marketers due to its resilience against fraudulent activities. Unlike CPM or CPI (Cost Per Install) schemes, which are more susceptible to spikes in fraudulent behaviour, CPA provides a more stable and secure payment framework.

What steps are involved in launching an affiliate program?

In affiliate marketing, selecting a vertical is typically the first step, but since you already have a product, that's not applicable. Instead, the next crucial decision is determining the technical aspects of implementing your affiliate program. Currently, there's a noticeable trend among brands towards managing their partner programs independently rather than relying on agencies. The choice between working with an intermediary or managing the program in-house largely hinges on the tracking technology you opt for.

Do you have a clear idea of the services and additional tools required to establish and operate an affiliate program? In the following paragraphs, we'll explore various alternatives available in the affiliate industry. If you already have specific tools in mind, it's advisable to compare them thoroughly before reaching a final decision.

Affiliate program management: how do you ensure proper affiliate management, campaign tracking, reporting, and payouts? 

Opting to establish an affiliate program introduces additional obligations and costs associated with the necessary services to operate it. Depending on the chosen solution, you'll either conduct a comprehensive assessment of existing options or allocate a significant amount of time to business analysis and custom software development.

Running a partner program offers three potential solutions.

1. Joining an affiliate network.

2. Utilizing a SaaS (Software as a Service) affiliate platform.

3. Developing an in-house solution from scratch.

Joining an affiliate network

Affiliate networks serve as intermediaries between affiliates (publishers) and advertisers (brands or product owners). By joining an affiliate network, advertisers gain access to a platform where they can create their program, establish affiliate rules, and attract publishers to promote their products.

One of the main advantages of affiliate networks is that they handle essential functionalities such as tracking technology, reporting, and affiliate recruitment. This relieves advertisers of major responsibilities associated with managing the platform.

Joining an affiliate network streamlines the process of finding suitable affiliates to promote products. Several well-regarded affiliate networks exist, such as AffiliNet, Amazon Associates, Clickbank, Commission Junction, Rakuten, RevenueWire, ShareASale, and Webgains. Researching these networks and reading reviews from advertisers and publishers can help you make an informed decision

Step-by-step guide on how to start with affiliate networks:

1You register at an affiliate platform.

2 The platform reviews your application and accepts it if you meet the requirements.

3After approval, begin crafting your program by inputting essential details. This includes providing a comprehensive description of affiliate products, outlining the payment model and commission structure, defining payout timelines (often contingent on reaching a threshold), specifying cookie duration, and setting parameters for target demographics and acceptable traffic sources. Additionally, you may designate preferred days and times for ad campaigns if pertinent to your product.

   4Create a database of marketing materials.Furnish publishers with campaign materials to utilize, such as sample ad banners, articles, promotional emails, and other relevant content.   

5At the same time, start promoting your program. Don’t solely rely on the affiliate platform. Join affiliate communities and social media, attend affiliate conferences, simply reach influencers, etc.

How to choose an affiliate network?

Affiliate niche

Affiliate networks often focus on specific niches, catering primarily to those within your own niche. Whether you aim to onboard affiliates from the network itself or attract them independently, being part of a niche-specific network ensures access to a wider pool of potential affiliates.

Possible payment plans

Once you've formulated your strategy and determined the payment plan aligned with your campaign, it's crucial to select an affiliate network that offers this payment structure.

Reputation

Before joining any network, it's essential to conduct thorough research. Explore affiliate forums to gather insights and opinions from users about various networks. Look for popular networks with thousands of affiliates and a strong reputation within the industry.

Fraud Prevention Policy

Assessing the trustworthiness of an affiliate network involves evaluating its policies and measures against affiliate fraud, a prevalent challenge in partner programs. Look into the network's approach to safeguarding campaigns from fraud, including measures such as click-level fraud detection, rejection of IP duplicates, and screening conversions based on CTCT reports. Additionally, consider whether the network integrates with ad fraud prevention platforms like FraudScore, FraudDefence by Inmobi, Forensiq, or Fraudshield. These integrations can enhance the network's ability to combat fraud effectively.

Account Management

The role of your account manager is crucial to your success when working with affiliate networks. Upon registering with a network, you're typically assigned an account manager who serves as your guide, familiarizing you with network rules and settings. While some issues may seem straightforward, others may be more complex and require expert assistance. Your account manager can provide support with setup, and ongoing issues, and offer valuable insights on optimizing your program for greater effectiveness. Building a strong relationship with your account manager can significantly contribute to your overall success within the network.

The Price

The expenses associated with working with an affiliate network as an advertiser encompass several components:

• One-time setup fee:

Trustworthy networks with a substantial number of publishers often charge a one-time setup fee upon registration, typically ranging from $500 to $2000. This fee covers technical setup assistance for your program and onboarding for your team. Smaller networks may waive this fee, but they might have a: limited publisher database, affecting your advertising reach.

• Commission from sales

A significant portion of your overall expenditure at an affiliate network is the commission from your sales, which you pay to the network. On average, this commission amounts to 20-30% of the revenue generated by affiliates. Additional costs may apply for extra services and customized settings.

• First-time deposit (for gambling niche):

In the gambling niche, some networks may require a first-time deposit as a guarantee of commitment from advertisers to promote their affiliate programs on the platform. The deposit amount varies widely, from a nominal sum to several thousand dollars.

• Other fees:

Some networks may impose small fees if your affiliate program fails to meet minimum thresholds for clicks, installs, conversions, etc. These fees may cover monthly platform maintenance costs if your program is not yet profitable

Can you join several networks?

Beginners might wonder why they shouldn't join multiple affiliate networks. After all, more networks mean access to more publishers and potentially more sales channels for promoting their affiliate products. However, the reality is quite different.

While it makes sense for publishers to diversify across different networks to access various affiliate programs, the same strategy doesn't necessarily benefit advertisers. When advertisers join another network, they often encounter many of the same publishers they already work with. If only 20% of the publishers are new, it's considered fortunate.

However, the risk of affiliate fraud poses a significant concern. Even if 20% of the publishers are new, the potential for fraudulent activity remains. Fraudulent affiliates may engage in tactics like emulating actions across different networks to claim multiple commissions for a single transaction. With multi-day cookies and multiple touchpoints, proving such fraudulent activities can be challenging.

One compelling reason for joining multiple networks is to expand internationally. Accessing various geographic markets may require joining different networks, as each may specialize in different regions. This approach enables advertisers to tap into diverse international markets effectively.

When faced with the situation where desired affiliates decline to work within the network an advertiser uses, it's essential to understand the reasons behind their decision. Engaging in dialogue with network representatives can provide insights and potentially resolve any issues.

However, if this challenge persists, it might be worth considering transitioning your affiliate program to a SaaS affiliate platform. Concentrating your efforts on growing affiliates within a dedicated platform can offer several advantages. By doing so, you have more control over the affiliate program's structure, policies, and operations.

This brings us to the second option for starting a partner program: establishing an in-house affiliate program using affiliate management software. This approach allows you to tailor the program precisely to your needs and preferences. With in-house control, you can customize commission structures, track performance metrics more effectively, and provide personalized support to affiliates.

Ultimately, the decision between using an affiliate network and adopting a SaaS affiliate platform or establishing an in-house program depends on factors such as your specific business goals, resource availability, and desired level of control over the affiliate program.

Creating your partner program

Contrary to some misconceptions, establishing your partner program on a separate platform doesn't mean taking on the responsibility for the technology yourself. Advertisers don't need to handle the technical aspects; instead, they choose an affiliate management platform much like they would select an affiliate network.

Affiliate tracking and management platforms are specifically designed for affiliate programs, offering all the necessary functionality built-in. Upon subscribing to a platform, advertisers can create their program similarly to how they would on a network. The key difference is that now they own the program and have access to all data regarding their ad campaigns. This shift grants advertisers greater control and visibility over their affiliate program's operations and performance.

Indeed, advertisers stand to gain significant benefits in terms of transparency and access to comprehensive analytics by managing their affiliate programs on dedicated SaaS platforms. This enhanced visibility enables advertisers to make informed decisions and optimize their ad campaigns effectively, ultimately improving the bottom line.

It's common for advertisers to transition to creating their programs after gaining experience with advertising or utilizing the services of affiliate networks. Additionally, new advertisers who anticipate a substantial volume of affiliates and ad campaigns may opt to launch their programs directly on a SaaS platform. This approach allows them to leverage the platform's features and capabilities from the outset, facilitating smoother campaign management and optimization.

Step-by-step guide on how to with an affiliate SaaS platform?

1You sign up on the website of the vendor.

2Sales or product representatives contact you to learn more about your program and help you set up an account.

3Usually, affiliate platforms offer a free trial during which you can decide whether the platform goes with your program and meets our expectations. Depending on the platform trial period can vary from 7 to 30 days.

4During a free trial your program is fully operational. You can start running ad campaigns. You create a new offer, set tracking, specify targeting groups, and add advertisers, and affiliates. Along the way, you can adjust settings. 

How to choose an affiliate software?

Analytics

Analytics play a pivotal role in every affiliate program, serving as the compass for advertisers to navigate campaign effectiveness. By scrutinizing the data, advertisers glean insights to discern successful strategies from those that fell short, thus informing future campaign iterations.

Through robust analytics, advertisers can distil the performance of their affiliate efforts, identifying trends, strengths, and areas for improvement. These insights pave the way for informed decision-making, enabling advertisers to refine their strategies and optimize future campaigns for maximum impact.

In essence, analytics serve as the cornerstone of strategic refinement, allowing advertisers to evolve their approach based on empirical evidence rather than conjecture.

Customization

For some customization may seem not very important upfront, but it will play a difference in the long run Customization typically involves three tiers: integrating a company’s brand and design, configuring the system to match specific operational processes, and enabling the implementation of new modules. Opting for a platform that offers all three levels of customization ensures that as your business expands, the platform remains aligned with your evolving needs. This comprehensive approach guarantees that the platform can adapt alongside your growth, providing the flexibility and functionality required to support your business at every stage.

Technical Support

Tech support plays a huge role in any tech business – you are never alone with your program. Prompt assistance from tech support can save you much time figuring out how to handle certain setting issues. And better look for 24/7 support. Ad campaigns don’t have a stable eight working hours day, and can indeed be more effective during evenings and night time.

Integrations with 3rd party services

When considering the operational workflow for your affiliate program, it's crucial to assess the existing integrations offered by the platform you choose. Pay close attention to the most in-demand integrations, including:

• Fraud Prevention: Look for integrations with fraud prevention services to safeguard your program against fraudulent activities and ensure the integrity of your affiliate network.

• Billing Services: Seamless integration with billing services streamlines payment processes, making it easier to manage affiliate payouts and financial transactions efficiently.

• CRM (Customer Relationship Management): Integrations with CRM platforms enable you to synchronize affiliate-related data with your customer database, facilitating better customer relationship management and personalized marketing efforts.

• eCommerce Platforms: If you operate an eCommerce business, integrations with popular eCommerce platforms allow for seamless synchronization of sales data, inventory management, and order fulfilment processes with your affiliate program.

• BI (Business Intelligence) Tools: Integration with BI tools provides advanced analytics capabilities, allowing you to gain deeper insights into your affiliate program's performance, track key metrics, and make data-driven decisions to optimize campaign strategies.

By leveraging these integrations, you can enhance the operational efficiency of your affiliate program and streamline various aspects of affiliate management, from fraud prevention and billing to customer relationship management and data analysis.

Flexible API

If you're considering integrating with a specific operational service that TrackX isn't currently connected to, the integration process will hinge on API accessibility. If a platform provides a robust API, future integrations shouldn't pose a problem for TrackX.

The Price

When considering the cost of renting a SaaS platform, it's essential to understand that billing typically occurs on a monthly basis. This billing structure is primarily determined by factors such as the volume of clicks, conversions, or anticipated revenue generated each month. Additionally, it's important to be aware that there may be supplementary fees associated with extra services or potential integrations down the line.

If you come across tracking solutions priced at $40, it's important not to confuse them with comprehensive platforms. These $40 options are primarily trackers designed for affiliates to monitor clicks. While they may start at this price point, their costs can escalate significantly, potentially reaching several thousand dollars, based on factors such as the volume of clicks and domains being tracked.

However, if you're launching your own program, those $40 tracking solutions may not suffice. You require a more sophisticated platform capable of managing advertisers and affiliates, optimizing ad campaigns, and enabling you to create your own network—a comprehensive affiliate management solution. While such solutions typically cost anywhere from $400 to thousands of dollars, TrackX offers all these features and more for free, ensuring accessibility and empowering businesses of all sizes to thrive without financial constraints.

What should you keep in mind?

When contemplating the transition of your program from a network to a SaaS platform, concerns about platform migration and data transfer are understandable. In the past, these challenges often hindered advertisers, particularly when faced with the task of transferring multiple offers. However, advancements in technology have addressed these issues effectively. With the emergence of solutions like CPAPI, automated data transfer tools have streamlined the process, eliminating the previous hurdles. CPAPI, integrated with numerous sources, seamlessly handles the transfer of your data. Through API integration, CPAPI accesses raw data from offer sources and imports it into your system, adhering to the recipient system's specified rules, and ensuring a smooth and hassle-free transition.

Dedicated affiliate software from scratch

Another approach to running a partner program involves launching it on a dedicated, in-house software platform. However, developing software from scratch is a significant endeavor that not everyone is prepared to undertake, especially newcomers to the field. Typically, advertisers or networks opting for in-house software are major brands with extensive ad campaign volumes and specific customization needs. Companies like Amazon and eBay, for instance, operate their partner programs on proprietary software. To embark on this path, the initial step involves finding a company that can provide a dedicated development team. Subsequently, you'll define technical requirements and conduct a comprehensive business analysis of the entire development process. Depending on the complexity, the development phase can span several months until the project reaches completion.

The Price

Opting for in-house software entails significantly higher costs compared to the previous options discussed. Developing in-house software for affiliate management can range from $250,000 to $500,000. However, the expenses don't stop there. You'll also need to budget approximately $15,000 monthly for developer maintenance to ensure platform stability, along with server costs. The final price range varies widely, contingent upon the volumes you work with. A more precise cost estimate can only be determined after thorough business evaluations.

SaaS Platform & In-house solution. Which one to choose?

When weighing the available options in the market, it's clear that opting for the first choice, the SaaS platform is the more prudent decision. This assertion is supported by key arguments centred around its speed and cost-effectiveness.

Of course, advocates of in-house solutions will emphasize the transparency and security of in-house solutions. But with modern-day security and privacy regulations, there is no way that tech providers will exist unless they perfectly fall under data security and privacy requirements. You shouldn’t be tricked by that. Considering the alternative of building a solution from scratch, one must factor in the considerable time investment required. Additionally, there's the challenge of sourcing specialists with expertise in the intricacies of an affiliate partner platform.

Let’s wrap it up!

Indeed, comparing options and experiencing them firsthand is always beneficial. With the free trial periods offered by SaaS platforms, you have the opportunity to explore and evaluate their features, allowing you to make an informed decision based on your specific needs and preferences.

TrackX provides a unique offering with both a free trial and a lifetime plan at no cost. You can dive right in and experience its features without any financial commitment, ensuring you have ample opportunity to explore its capabilities from the start.