Affiliate Networks Explained

Chad Willis Marketing, Uncategorized 0 Comments

We’ve established that affiliate marketing is where someone sells a product or service for someone else in exchange for a commission.

An affiliate network is essentially a business that has a tracking system that houses thousands of offers from a variety of advertisers, and provides affiliates access to their platform so they can promote their offers.  Think of a network as a broker between the affiliate and advertiser.

A relationship with only two parties involved, an advertiser and a publisher, is known as a direct relationship.  While this may seem like an optimal situation, affiliate networks can often provide value to affiliates that improves their bottom line, making working with a network more profitable than going direct with an advertiser.

Here’s how this relationship would flow:

Advertiser > Affiliate Network > Affiliate

Let’s see an example of how this works in the real world.

Jack has a product that he doesn’t want to have to sell himself, but not only that, he doesn’t want to spend time finding compatible affiliates who can do the marketing for him.  Because of this, Jack goes to SickDope CPA Network, who adds his product to their inventory and exposes all of their clients to it.  Matt, an affiliate and member at SickDope, sees this offer on the platform and decides to promote it.  Jack pays SickDope $100 for every sale, and SickDope pays Matt $80 per sale, netting SickDope $20 for their efforts in facilitating the relationship between the affiliate and advertiser.  

As you can see, there are benefits for everyone to using an affiliate network.  Advertisers are able to get their offer out to more affiliates, and publishers can access offers that are all consolidated into one tracking system, without having to have accounts at the advertiser’s website for every offer they decide to send traffic too.

Below, I’ll detail some pros and cons of working with a network as a publisher.


Benefits

 

Payment Consolidation & Speed

If you’re running offers from several different advertisers, you’re going to have to manage payments coming from each one.  Since an affiliate network is brokering the deals between you and all the advertisers on their network, you only have to worry about receiving one payment from the network, rather than several from all the adverts.  In addition to this, direct advertisers tend to pay on a slow schedule to ensure an affiliate’s traffic is converting for them before they pay out, so it can take up to 60 days after you send traffic to receive your payment.  Most affiliates networks worth their weight in salt payout once a week, so you’ll have access to more cash flow, providing you capital to scale up your campaigns.

Offer Selection

Affiliate networks can often have exclusive deals with advertisers to whom they send a good amount of traffic, so if you as an affiliate go directly to the advert, they’ll just refer you to the network to run the offer.  These exclusive offers can have improved landing pages, higher payouts, or lower scrub rates. Also, networks flat-out just have a massive amount of offers for you to pick from, basically served up on a silver platter.  It would take months for a single person to get setup with every one of the offers that is featured on an average affiliate network, so this saves you valuable time to focus on your campaigns.

Financial Security

If an advertiser goes out of business and can’t pay their affiliates, a reputable affiliate network will typically pay their affiliates that were running that advertiser’s offer out of pocket, as taking that risk is what they’re getting paid for.

Drawbacks

 

Cost

A network is providing a service to affiliates, and they get paid for their service through the commission they make on each conversion.  Typically, this ranges between 10-20%, which in the long run is a fair amount of cash.  It’s up to you to decide if it’s worth it, but I would advise beginners to always work with affiliate networks.

Scrubbing

Networks can scrub.  I’ll write more about scrubbing in a future post, but it’s essentially where networks can steal leads from affiliates by preventing conversions from showing up in their tracking system.  Evil shit.

Financial Security

Both a pro and a con.

Affiliate networks can go under just as quick as an advertiser.  It’s even more devastating than losing an advertiser’s payment, because if you’re running all your traffic to one network (rookie mistake, DON’T DO THAT), your entire payment is gone, not just the one from a specific advertiser.


Being both an affiliate network owner and publisher, I can tell you from experience that working with a network can be great in numerous unique situations.  Yes, you will on the surface make more money working directly with an advertiser, but often affiliate networks offset this by providing tools and advice that can make you even more money.  If anything, the extent to which a network makes your life easier makes working with them worth the cost, as going direct can be a hell of a hassle sometimes.

On a whole, affiliate networks play a key role in the industry as they provide a perfect environment for advertisers and publishers to connect.

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