Running a Private Label or In-house Affiliate Program vs. an Affiliate Network Program

Should we run an ‘in-house’ program or join an affiliate program network?

It’s a question that Affiliate Program Managers have wrestled with for years and there’s no clear cut answer, but after you learn the advantages and disadvantages of each approach, you’ll be in the best position to make the decision that’s right for your business.

With the multitude of choices available today for one to run an affiliate program, there is not always a clear distinction between what is commonly referred to as an in-house vs. a network program. First let’s discuss some terminology and definitions…

Below are some basic attributes of each solution type and some examples:

Affiliate Networks: Refers to a place where multiple merchants/advertisers promote their affiliate programs, campaigns and offers to multiple affiliates/publishers who in turn promote these programs to their audiences. (Please note: For simplicity sake, and also because I do not generally recommend them, I am not including a discussion of “CPA” or lead networks in this article.)

Examples of Affiliate Networks include: Commission Junction, LinkShareShareasale, eBay Enterprises (formerly Pepperjam Network), LinkConnector, and AvantLink.

In-House Program: This usually refers to an affiliate program that is not offered through a public affiliate network. Sometimes called a private label program, in-house affiliate programs are typically administered using:

  1. Off-shelf Software purchased outright or on a licensed basis that is installed completely at the merchant’s site and runs independently. iDevAffiliate is one of the most popular affiliate program software products.
  2. Shopping Cart Plug-ins are often available to merchants, as shopping cart software commonly includes an ‘affiliate program module’
  3. ASP Solutions usually licensed on a month-to-month basis are very commonly used. Virtually all aspects of the affiliate program are administered through the solution vendor’s website. Program managers log in to the site to: set up program terms and affiliate compensation levels, run performance reports, provide promotions to affiliates, communicate with affiliates, etc.. Affiliates log in to their accounts to grab promotions and run reports of their activity. Examples of ASP solutions include:

DirectTrack is a very popular ASP solution, but over the years it has evolved into a solution that’s best for those who want to run their own affiliate network with multiple offers/campaigns. Using DirectTrack to manage a single program has become cost prohibitive for most. Years ago, DT costs $50 a month to run a program, now it’s at least $500 a month.

Infusionsoft is a very popular CRM platform that includes an affiliate program module. I’m devoting an entire article to Infusionsoft that will be released in November.

Advantages & Disadvantages of In-House vs. Affiliate Network Programs

As an outsource affiliate program manager for over 10 years, I’ve managed a slew of in-house and network programs. Recruiting desirable affiliates has always been an important responsibility in this role and it’s always been abundantly clear to me that affiliates prefer to work with merchants though a respected third party network.

The primary reasons why affiliates prefer to work with a network:

  1. Affiliates want to ensure they get paid. This desire cannot be emphasized enough. Affiliates know that merchant programs will be flagged or suspended by the network if they do not keep their accounts properly funded to cover commissions earned. Affiliates also trust that third party tracking is more reliable and they will earn proper credit for their referred sales. In addition, if you have a ‘young’ brand this concern becomes even more critical. Affiliates rightly have no reason to trust they will be paid the commissions they’ve earned by a company that has not been in business very long and is not well-known.
  2. Affiliates don’t want to learn how to use your in-house ‘system’.  In order to participate in any program, affiliates need to know how to get link codes, generate and interpret reports, access product datafeeds, post ever-changing deals, and more. Every affiliate solution, whether a network or in-house, is unique in how it handles these functions, so there is always a learning curve. There is often resistance by affiliates in having to learn the ‘ins and outs’ of another affiliate solution. This is why many will only work with a handful of network solutions only.
  3. Networks offer centralized reporting and consolidated payments.  Affiliates prefer to limit the number of places they need to go for reporting. They may be participating in many programs within one network and therefore can run reports all at once vs. logging into a single in-house program. In addition, most programs have a minimum payment amount which is often $100. For the small affiliate, they may never reach this threshold for a single program they are promoting, but since networks will consolidate earnings from all the programs the affiliate is participating in, it’s then much easier for the affiliate to reach the minimum payment threshold.

From the merchant’s perspective, the great advantage of using an affiliate network is your program’s exposure to lots of affiliates. Networks already have a base of affiliates – in some cases, hundreds of thousands – and when your program launches on one of these networks this exposure is tremendous and quite valuable.

There are still some important advantages of running an in-house/private affiliate program:

1. The Direct Relationship.  The single most important advantage of an in-house program is establishing a direct relationship with each of your affiliates. With some network solutions, it’s virtually impossible to do this. Typically, will you have not access to anything more than an affiliate’s email address – and some networks even allow affiliates to hide their email address and opt-out of your correspondence! This has often mystified me. Why networks would want to limit merchant communications with their affiliates is without explanation.

The other critical factor with a direct relationship is that you do not have to pay a performance based fee to the network each time one of your affiliates refers a sale. Furthermore, some of the networks base this fee on a percentage of the commission rate – usually from 20-30% of commissions paid – vs. network performance fees based on sales revenue – usually 3% of sales. This is another pet peeve of mine…as it seems unfair to be required to pay more to the network when it’s decided to increase overall commission rates or even to raise the commission for an individual affiliate. For example, if you are paying affiliates 10% and the network is earning 30%, then their net fee is 3% of sales. If you increase commissions to 15%, then the network automatically gets a ‘raise’ to 4.5%! This amounts to a disincentive to raise commission rates in order to grow one’s program – something the networks would want to encourage!

2. Increased Control and Flexibility. With an in-house program you have the ability to create a custom-built solution that allows for more integration with your business. With more integration with your business, you can much more easily track affiliate referrals for the lifetime of the customer. This means affiliates can be paid true residual income on the customers they refer. With integrated, database tracking, this is a straight-forward process. Cookie tracking is all that most network solutions can offer which is a very unreliable way to track future purchases.  And with a custom solution comes greater control. However, this will put more demands on IT Resources that may or may not be available to you. Still, even with a third party or software solution, you typically have more control than when part of an affiliate network.

So Which is Better — In-house or a Network Program?

Jim Gribble of LinkProfits has been managing affiliate programs for over a decade.

Of course, there is no clear choice, it depends on the particular needs of the merchant and how they match up with the advantages and disadvantages cited above.

However, I generally recommend to successful merchants to consider running both an internal affiliate program and also have a presence on at least one of the large affiliate networks. This is the strategy that I have seen work well and have implemented successfully myself numerous times.

If you are a merchant interested in pursuing a robust affiliate program, I invite you to contact me to discuss your particular situation and objectives.

 

Automated Coupon Datafeeds are Preferred by Most Affiliate Deal Sites

If you are an affiliate marketer and run a coupon or deal site, then you are probably using one of the many ways to receive coupon codes from merchants via some type of automated feed.

Virtually all of the major affiliate networks offer some type of coupon datafeed, including Commission Junction’s Coupon-Only Offers RSS Feed, LinkShare’s LinkLocator, Shareasale’s Deal Database Feed, LinkConnector’s Coupon/Promotions Feed, eBay Enterprises’ RSS Feed, and AvantLink’s Dynamic Coupon Feed.

It’s pretty much an accepted fact that using coupon codes to promote a merchant is a proven-successful way for affiliates to boost clickthroughs and conversions — and ultimately, earn more commissions. And you don’t need to be a coupon site to promote coupon codes. Plenty of affiliate publishers include them in blog and Facebook posts and in their newsletters to subscribers. Typically, if you’re only going to feature a handful of coupon code deals, then one does not necessarily need to subscribe to some type of coupon datafeed. But if you do run a ‘deal site’ then some type of automated method to retrieve and update promotions is a must, since it can save you hundreds of man-hours.

However, using one of the feeds or API solutions from the large networks can be difficult to fully integrate into your website and to automate these activities. There are tech-savvy folks out there who are happy to help you with this challenge OR affiliates can utilize one of the tools available that will help you to fully automate the various Network feeds into your website.

couponfeeds

I’m happy to highlight four tools that will help you to automate coupon code integration into your websites. Here’s my alphabetical list of these services. Please note, there are other similar services out there, but they do not appear to be active businesses judging by their lack of current news published on their websites, so I am not including these services here.

1. Coupilia — According to their website, Coupilia currently disseminates coupons from 6,994 merchants across 15 affiliate networks. “We are very selective in the merchants and networks we partner with and only offer quality merchants for our clients.” They currently offer two different subscription plans: Their Professional Plan which has a 14-day free trial, costs $499 per month and is valid for one URL. For rev-share or multiple domains, Coupilia asks that you contact them for custom pricing.
2. For Me To Coupon — This is one of the most popular coupon integration tools.  According to their website: “For Me To Coupon takes the hassle out of running an affiliate coupon or deal site. We spend thousands of hours each month testing, fixing, and categorizing coupons and links so you don’t have to. In addition to aggregating offers available through the networks, we also build deep links to sales and clearance, promotional shipping offers, and provide extensive data on every merchant we support.” They offer three subscriptions from $500 to $1499 per month and each has a free 30-day trial.
3. GoldenCAN — This long-standing tool is primarily focused on product feeds, but it also has a Coupon Integration™ option which “provides an opportunity for the affiliates to display thousands of online coupons, promotions and recent price drops for the products of their selected merchant(s). All these information will be available to their store with just a single line of code. This store can be created for single as well as multiple merchants. Different styles and display options are available that enhance the store functionality and visibility. For example you can create a store for coupons only, for price drop products only or even for both.”
4. PopShops – They have been around a long time and were purchased by Rakuten Marketing (owners of LinkShare) earlier this year. Originally focused on product feeds, Popshops also offers a “coupons and comparison shopping” solution.  Plans range from Free (with rev-share) to $59.99/month, with a 30-day free trial. LinkProfits has no referral relationship with Popshops, but we can offer readers a 10% off coupon for PopShops subscriptions by using the code: LINKPROFITS10

Click to learn more about FMTC's Deal Bank

Please note: I included Prosperent in the graphic, but upon further investigation it is felt their model is more similar to ad serving than it is to an automated coupon data feed service.

Green Screen Wizard Software is Holiday Fun — New Specials for Affiliates

The Holidays are the best time to promote Green Screen Wizard Software. Have you seen our program EPC lately? IT’S WELL OVER $100! That’s because November is the busiest month of the year for Green Screen Wizard sales. And to help you to maximize your commissions we have two Holiday Specials, a Coupon Code that’s valid for the whole month, and new product images and descriptions for you to post on your site.

Affiliates should let there readers know about Green Screen Wizard software. Over 20,000 professional photographers and photo hobbyists (and we’re all amateur photogs these days!) have already unlocked the magic of powerful green screen technology with our easy-to-use software. Plus, Green Screen Wizard offers exclusive photo backgrounds, portable green screens and money-saving bundles for all your chroma key photography and video needs!

Look at these great Holiday packages we’ve put together! There’s something for all types of photographers!

Give them the Green Screen Wizard Holiday Gift Special for only $79.95! (Save $104) The Holidays are a great time to do Green Screen Photography and Green Screen Wizard is fun for the whole family! Everything you need is in the Green Screen Wizard Special Getting Started Kit! It contains: a copy of Green Screen Wizard Lite a $50 value, a 5×7 Popup Screen a $34.95 value, the Essential Background DVD a $69.95 value, and the Christmas Backgrounds Collection with Snow Globes a $30 value. Click to learn more about Green Screen Wizard Photography!

Get your own Green Screen Studio for the Holidays!! Just add a camera and some studio lights and you have everything you need to setup a professional Green Screen Studio. You get: A copy of Green Screen Wizard Pro Studio with editor (normally $199.95), Essential Background DVD (normally $69.95), Christmas Backgrounds with Snow Globes (normally $30), Ken’s Sandwich Overlay Collection (normally $39.95), and Portrait Mega Disk (normally $49.95). Special price is just $240 (SAVE $150!!). Click to learn more now!

Plus, your readers can use this coupon code to save even more!

Take 20% off all software and background disks at Green Screen Wizard, where it’s easy to get started producing green screen effects for photography and video! Enter GSPP20XMAS during checkout. Expires 1/3/14. Click to try a Free Demo today!

We’ve also created new art for our software boxes and new text link descriptions as well:

Click to learn more and try a Free Trial!Green Screen Wizard Software Full Version offers the latest in green and BLUE screen software power and control behind an amazingly simple and accessible user interface. It provides professional photographers, as well as photography enthusiasts, a simple way to do green screen removal and substitutes their choice of digital background. Green Screen Wizard is a self-contained chroma key removal program that does not require Photoshop or other photo editing application to produce beautiful green screen photos. Learn more now and try a free demo!
Click to learn more and try a Free Trial!Green Screen Wizard Pro Studio Editor In addition to having one of the best green screen removal systems, the Green Screen Wizard Pro Studio’s proprietary Airbrush Editor puts ultimate flexibility and quality at your fingertips. Its special brushes allow you to restore lost green areas, adjust brightness and contrast in specific areas, fix unwanted screen shadows, and do unprecedented fine hair restoration. Other ‘powertools’ allow you to magically smooth face wrinkles, generate realistic shadows, create 5-layer sandwich overlays, fully annotate and create magazine covers or attention-getting ads, and much more. Impress your friends and clients with your artistic images – you don’t have to tell them the new Green Screen Wizard special effects tools made it a snap! Learn more now and try a FREE DEMO!
Click to learn more and try a Free Trial!Green Screen Wizard Photoshop Plug-in offers the same green screen software power but it is encased in a Photoshop plug-in. It provides professional photographers a green and BLUE screen solution inside of Photoshop. The unique "Three Layer System" makes it easy to edit your Green Screen Image. And as a plug-in, you can take advantage of all of the Photoshop editing capabilities. In addition Photoshop can read and save many more file formats than Green Screen Wizard standalone. Learn more now and try a free demo version!

Green Screen Wizard links and promotions are available on three different Affiliate Networks:

Please click here to learn more about our Affiliate Program on the ShareaSale Network.

Please click here to learn more about our Affiliate Program on the LinkConnector Network.

Please click here to learn more about our Affiliate Program on the eBay Enterprise (formerly Pepperjam) Network.

The Green Screen Wizard affiliate program is managed by LinkProfits. Please don’t hesitate to contact us anytime with your questions or comments — we want to hear from you! Our valued affiliates earn from 10% to 20% commission on sales that average $150. Green Screen Wizard consistently has one of the highest EPCs of any program.