Over the past few years we have seen more and more brands move to private networks. The flexibility coupled with their cost makes them a very attractive option for both large and small brands. Below I wanted to discuss a few pluses and minuses for both working with a private network or sticking with a traditional network.
Recruitment
The pull of an affiliate network can not be ignored when looking at recruitment. Focusing on content sites, if they aren’t utilising third party tools like Skimlinks to monetise content, then what would interest them to sign up to a network? It would have to be the brands on there. If you boast a ton of well-known brands (Mr Porter, Nike, Boohoo, River Island etc), then publishers are more likely to join up.
What about Saas platforms then? Well this is a little trickier. With these, the management and subsequent recruitment is up to your in-house team or your chosen agency. There isn’t an ever increasing pool of easily discoverable publishers to choose from. You need to be a lot more proactive with your recruitment. How effective this is, depends on your setup. When using an agency for example then they should have the connections and resources to recruit the best publishers. Working with multiple clients (private and network), gives a birds eye view of what works and what doesn’t. Network account managers obviously do the same. But their talent pool is largely restricted to publishers on their specific network.
Payment Types
Saas platforms are able to enter a mature marketing channel like affiliates and spot the opportunity to grab new clients. Restraints put on networks by technology and dashboards built many years ago, means this also means a lack of diversity in payment models.
The affiliate channel has been a predominant last click battle for publishers to influence the purchasing decision of customers. As a result the types of publishers that lend themselves so well to this are those like cashback or discount. In many occasions the customers has decided on their purchase and look to these partners to either grab a last minute coupon code or receive some cashback. Networks have relied upon these partners to drive considerable amounts of orders for their brands. As a result, sometimes they lack desire to formally implement different types of payments.
Working with a large mix of affiliates in various ways means a need for flexible payment models. Including but not limited to CPC, CPM, CPA, SKU level commissions and customer journey influence.
Customer Journey Views
We all know that customers can visit multiple websites before completing their purchase. This could be a review site, comparison engine or Youtube video. But the channel we work in is still a traditional last click model. The last affiliate visited is mostly winning the commission in its entirety. I’ve noticed many bloggers becoming disillusioned with the affiliate channel as a result. The effort put in to research, create, and promote content is rarely rewarded with significant commission from that individual article, video or social post. I’d prefer an upfront media fee over the potential of my commission being taken!
Third party tracking tools have evolved to show brands touch points during customer journeys. All affiliate networks need to effectively do the same. Slowly, some have. They can show the journeys between publishers as a customer travels towards checkout. Others show ‘influence’, which is rather arbitrary for me if there is no context. Journey position, time on publishers site etc are all more important. Also, it is crucial for affiliate strategy to know who is taking the last click from a publisher. This feeds in to your affiliate strategy, commission models, recruitment and more. Subsequently, is the need to pay on that influence. If a brand has to pay a bonus to a blogger whilst giving another site the full commission, then this creates additional cost. Most brands will just continue to overlook the bloggers influence rather than incur this new cost.
Protecting Margins
The e-commerce landscape is brutal, and new brands are popping up all the time trying to disrupt different verticals. Analysing product margins is one tactic that can help you get, and maintain a competitive advantage.
A particular tool I will focus on to implement this tactic is SKU level commissions. If you have a product range that your margin is really strong on, then it makes sense to maximise. By offering higher commission, bigger discounts or increased cashback, this will help to beat rivals. All private Saas networks that I have tested have this option built in as standard. Do all networks? No! So, if this is a tactic as a brand you want to utilise, then be aware of what network can and can’t do.
Gravitas
This sits alongside recruitment really. I do feel that as a content publisher if a brand reached out to me to join their private network, it would have more gravitas than a network. I feel I would be more inclined to join as it feels handpicked, exclusive and my expectations would be heightened.
Cost
I’m not one that focuses solely on this, as this is only one part of the overall strategy for your affiliate program. Seeing the override on offer from networks in isolation can focus the mind on pure bottom line. What about the potential to make significantly more revenue.
That being said, as Saas platforms come with no dedicated account management, obviously there is a cost saving to be had. Without the resources in-house or an external agency to manage the program, then the cost saving is irrelevant. You just won’t be able to generate significant revenue to make it worthwhile. Networks charge an override or monthly fee so that they can offer a level of service to their brands. Whether that service is adhered to, and if you see the value varies. My experience, has been mixed. I have had some fantastic network management but also some very poor support.
Conclusion
There is no one definitive answer as to whether you should be working with a traditional network or taking the plunge with a private affiliate network. Circumstances play a major part, as you’d expect. If your resources are limited, then having a traditional network account management team can be vital in maintaining a strong affiliate program. Working with an external agency or have a dedicated in-house team? Then, I would say that a private network could be ideal. But, take into account your brand positioning and current awareness. It can be difficult to persuade publishers to sign up to yet another network if they feel they won’t gain anything extra from it. If you have the pull, and can offer them good commission rates, payment on influence, additional content, invites to special brand events etc. Then this can all help to create a vibrant private affiliate program.
