Greg Shepard

The Surge of Affiliate Networks Has Changed Affiliate Marketing

Now that technology companies have started offering affiliate network software, it seems new affiliate networks pop up each week, maybe even daily. In the past 12 months alone there have been over 200 new affiliate networks.

Like other online strategies such as search engine promotion, merchants should not limit themselves to the internal promotion available only through their immediate network. This would be like an SEO saying they want to be in just one search engine to attract visitors.

Naturally, this has changed the landscape of the affiliate space. Now merchants must look at running their offers in multiple affiliate networks and/or running their own private affiliate network.

A private network offers the ability to develop a real traffic annuity through the development of chosen partners with websites that do not compete, while multiple networks can offer exposure to a larger base of experienced affiliates. The combination of these two methods has created a new breed of affiliate program, the “multi-channel program”. The multi-channel program offers the best of both worlds. This approach has become a must as the pool of affiliates has been spread out between multiple networks, a process that is likely to accelerate in the future.

Promotion methods for this type of program are best implemented through combining affiliate network promotion with personalized affiliate recruitment and management efforts. The reason for this is that both forms of providers offer something that the other does not. Networks help to gain marketer affiliates and lots of them. Solution providers are able to attain more strategic business partners; these can be syndication partners, emails marketing companies, ad agencies and so on, adding large power affiliates to the their overall performance partner base.

The multi-channel program also helps merchants to achieve their program goals while remaining in control of their performance-based relationships and branding. It allows for promotion by marketing type affiliates and strategic high performing partners from many types of sites, such as email, Affiliate Network Promotion, Free Offer Sites, Informational/Content sites, E-Books/E-Zines, Coupons/Gift Cards/Sweepstakes, Shopping/Price Comparison, Newspapers/Classified and more.

In addition, this model helps to provide a long-term sustainable traffic annuity. This is something that virtually no other advertising method in the online space can do. With paid search, once payment stops, the traffic stops as well. With organic search, merchants must continually optimize their site to maintain top position. Most other strategies are “pay for play” as well. In contrast, the affiliate space will continually generate new traffic because the advertiser actually owns all of the power behind their program and can easily maintain lasting, lucrative relationships with affiliates.

The multi-channel affiliate marketing model helps to provide a united marketing front. By gaining large amounts of advertising on a pay-by-performance basis, and by gaining more control over branding, multi-channel affiliate marketing is the solution the online space has been waiting for. The shift to this model will prepare us for the influx of marketing dollars to come and help to provide advertisers with a pleasant transition in to the online world.

Greg Shepard

About Greg Shepard

Greg Shepard, the Chief Strategy Officer of Pepperjam, is a seasoned veteran in building and running sustainable growth businesses. Inspired by the unique perspective he garnered as both a merchant and affiliate in past ventures, Greg established AffiliateTraction and it has since expanded into the largest multi-national affiliate marketing agency with offices in Silicon Valley, Toronto, London and Sydney. In January of 2016, AffiliateTraction was acquired by eBay Enterprise Marketing Solutions. In April of 2016, eBay Enterprise Marketing Solutions became Pepperjam, resurrecting a familiar name in the performance marketing space.

14 Responses to The Surge of Affiliate Networks Has Changed Affiliate Marketing

  1. bryce says:

    Hi – Can you name a few of these new and/or improved networks that you are talking about and which ones you like best?

  2. What of offer cannibalization and the negative (cost inflation) economic impact they have on the bottom line (cost of advertising as percentage of sale)? In my experience consulting/talking with merchants, this is the number one issue for them when considering working in such a fashion.

    I would enjoy reading someone’s thoughts on how a merchant can control offer cannibalization and make a “private/affiliate” and “ad/CPA network” approach work.

  3. Beth Kirsch says:

    Not to mention, unless you control you offer and what is being offered by who, competition amoung networks eat into margins by networks as they compete for the same affiliates.

    Then offers become flat because no one is pushing them anymore.

    Moreover, unless you are staffed really well how do you police all those networks, they don’t all have your best interest in heart as an Advertiser.

    Beth

  4. patrice says:

    Hi, Greg…

    A problem for our company with regards to ad networks and email affiliates is that we aren’t always able to see precisely where our ads are located or with what other ads they are shown. How does the idea of multi-channel marketing as you described it solve for that problem? You mentioned that “The multi-channel program also helps merchants to achieve their program goals while remaining in control of their performance-based relationships and branding.” and I just wanted to find out which networks you were speaking of and how they help keep merchants in control. We’d love to explore that avenue but we have to do so in a really safe, very transparent manner. None of the networks we explored (the big aff networks and ad networks) were able to accommodate us to the extent that we needed.

  5. Greg Shepard says:

    In response to your questions about which networks allow you to control your branding…

    My exact quote was:

    “The multi-channel program also helps merchants to achieve their program goals while remaining in control of their performance-based relationships and branding.”

    What I mean by this is the affiliate/ad network provides the volume while the private merchant program allows you to control branding.

    It’s far too often that I hear merchants complain about controlling their brand, yet the merchant only has their program running in the networks.

    Merchants will be one step closer to brand control by running a private merchant program along-side the networks.

    As for email affiliates and where and how they show ads… Uploading an email creative into your private merchant program allows your affiliates to easily pull an email creative while you control what they drop as much as possible. By offering new offers or discounts on a regular basis, your affiliates will be more likely to return and use the email creatives you provide.

    Jeff, thanks for your comment, however, if you could please elaborate on the beginning of your comment, I’d be more than happy to respond.

  6. Peter Koning says:

    How does a merchant resolve which affiliate gets the credit if the customer has visited affiliates in more than one of these networks?

  7. Beth Kirsch says:

    Greg,

    If a merchant is running in a network they put their brand at risk, a private network is much, much better, but your argument is for many networks. I still don't understand your logic at all.

    While Jeff Molander and I don't agree on my, I do agree with him on what he wrote.

    Jeff is saying, I think, that there is one base of affiliates and they pull the offer from whereever the payout is greatest. If you have many networks, they fight for affiliates by cutting into their margin. As an result, as an advertiser, to keep your offer alive you need to pay networks more.

    I'm just curious have you ever been on the advertiser side managing multiple networks?

    From what I can tell, right now, you sell affiliate tracking software and network services and it looks like it has colored your view a little bit.

    Beth

  8. It's far too often that I hear merchants complain about controlling their brand, yet the merchant only has their program running in the networks. Merchants will be one step closer to brand control by running a private merchant program along-side the networks.

    This is precisely the point I hear others suggesting/asking. Placing the program outside of networks offers, by experience, less control… virtually by definition of working with a CPA ad network.

    Indeed, how will they be one step closer? Unless Greg is suggesting a true, private network and not a CPA network approach.

    I may have mis-read you, Greg. I'm becoming more clear now and thanks for setting me straight. What I hear you saying seems to click with my blog about your viewpoints here.

  9. Greg Shepard says:

    Due to the amount of responses I've gotten, I'm posting in a Q&A format.

    Q: If a merchant is running in a network they put their brand at risk, a private network is much, much better, but your argument is for many networks. I still don't understand your logic at all.

    A: I understand and respect your position; however I feel there is a misunderstanding. I am not saying that running in multiple networks is the solution for everyone. It is for some it is an approach that can work for some not everyone, as most marketing is. If brand control is the major concern then running a private network is the approach that we both agree on.

    Q: While Jeff Molander and I don't agree on my, I do agree with him on what he wrote.
    Jeff is saying, I think, that there is one base of affiliates and they pull the offer from wherever the payout is greatest. If you have many networks, they fight for affiliates by cutting into their margin. As a result, as an advertiser, to keep your offer alive you need to pay networks more.

    A: As you know affiliates choose networks they prefer and may not work with all of them, this means that you have affiliates that you will reach in some that you may not reach in others. In addition networks and merchants do not necessarily fight just based on payouts… I feel the affiliates you want are not just after payouts there is much more to earning an affiliates business. Cookies, thresholds, conversion, products, creatives, landing pages, service, and so on, plus the quality of the relationship is more of concern for the high-end quality affiliates.

    An article written early this year by Internet Retailer magazine stated "Retailers believe they're in the power situation because they are writing the check. But truth is, it's the affiliate, so you need to treat that affiliate as you would anyone in the power situation." I believe that you treat them as if they are what they are – top producing digital sales people, pay them well and make sure they're happy.

    A study done by CFO Magazine in fall-2005 asked the question. "If you wanted to increase the value of your company derives from its workforce, where would you focus? 65% said they would focus on employee training." Affiliates are people, your sales force, and there is more to them the just payouts.

    Q: I'm just curious have you ever been on the advertiser side managing multiple networks?
    From what I can tell, right now, you sell affiliate tracking software and network services and it looks like it has colored your view a little bit.

    A: Yes, in fact, I have been on all sides. While I can see your point of view, you have very little knowledge of my background so I will provide you some with my answer.

    I started as an affiliate and then became a merchant, then into the side you reference. I am for the industry and feel that by becoming active in the community that I could help the industry grow. I stand WIN-WIN partnerships, where both parties win. Articles like the one written by Kurt Peters, Editor in Chief of Internet Retailer, that said "Overshadowed by its bigger cousins e-mail marketing and search engine marketing, affiliate marketing nevertheless plays a key role in introducing new customers to a retail web site and generating sales" have encouraged me to play a more active roll in our industry.

    Thank you very much for your questions, and I hope I have provided a satisfactory response.

  10. Beth Kirsch says:

    "As you know affiliates choose networks they prefer and may not work with all of them, this means that you have affiliates that you will reach in some that you may not reach in others. In addition networks and merchants do not necessarily fight just based on payouts… I feel the affiliates you want are not just after payouts there is much more to earning an affiliates business. Cookies, thresholds, conversion, products, creatives, landing pages, service, and so on, plus the quality of the relationship is more of concern for the high-end quality affiliates.

    I was talking about a specific offer from a specific advertiser and you don't answer that all. And I have to tell you, if you are in CJ/Linkshare/Performics and one or two of the big CPA networks, you'll catch most of the affiliates.

    And if you are in more than than two or three CPA networks, count your offer dead in six months.

    Yes, affiliates do prefer networks, but they like money better. 🙂

    I'm sorry this is a rough hazing for your first post on RN, but if you are going to take a stand, you have to back it up with details here.

    ReveNews gets easier. 🙂

    Cheers,

    Beth

  11. Greg Shepard says:

    Q: How does a merchant resolve which affiliate gets the credit if the customer has visited affiliates in more than one of these networks?

    A: The main point here is that it's happening now and will happen more and more as networks grow. I see this as an opportunity for you and others to develop solutions. I would welcome suggestions to this challenge. Here are a few that were sent to me recently. There a few solutions, one solution is to use separate transaction ID's, another is to this have someone actively managing your program and monitoring sales. If they see two sales with the same transaction ID then they would dismiss the sale that came from the former of the two affiliates.

    I respectfully disagree, I think it is your opinion, not fact, that three networks out of literally hundreds have most of the affiliates, it even sounds as if you are a promoter. The larger networks have many affiliates but as you are aware there are many affiliates who are not happy with them and look for new homes. In addition affiliate networks are all working very hard to build their own bases and I think it a bad business move to count them out. In our companies we have over 100,000 affiliates and I know based on just that there are many that do not like nor wish to work with the networks. Regarding the CPA networks I think your statement again is too broad, however if you have solid facts I would love to hear them. Your comment "Yes, affiliates do prefer networks, but they like money better. :)". This is happening now and we must work together to find the best solutions.

    It seems that questions have an objective of shredding ideas not embracing new direction and changes in landscape. My intent in presenting ideas is in the hope that other peers in the industry will build on and overcome obstacles. I am honored that a few of the responses believe that I have all the answers; however I have ideas and information of current changes. I hope that moving forward we can work together to develop advancement and over come obstacles instead of spending my time and yours undermining ideas. You seem to have great questions, what ideas do you have?

  12. "It seems that questions have an objective of shredding ideas not embracing new direction and changes in landscape. My intent in presenting ideas is in the hope that other peers in the industry will build on with me and overcome obstacles. I am honored that a few of the responses believe that I have all the answers; however I have ideas and information of current changes. I hope that moving forward we can work together to develop advancement and over come obstacles instead of spending my time and yours undermining ideas. You seem to have great questions, what ideas do you have?"

    I think people shredding ideas is a natural response to feeling "preached to"… This is common with a few of the "know it all" type writers.

    Greg, I don't think your intent is to come and force industry changes on us, but to spark an industry conversation on how to deal with changes you observe.

    – Eder

  13. Adrian Bold says:

    This is a great article that has started an interesting debate. One concern I have with the surge of affiliate networks is that there still doesn't seem to be any credible resource monitoring these (unbiased). In an ideal world, affiliates would be able to go to an independent auditor to verify the credibility/honesty of these networks and those networks who want to be listed would pay a fee to be audited and approved. What do you think? Is that viable?

  14. Mike Johnson says:

    What do you think of the new Printeritems.com ink affiliate program that is designed to give more control to the publisher by providing them free websites.

    This new program allows the affiliates to keep their customers forever, not just 180 days as with most, ability to control retail prices which most don't offer, while maintaining much higher commissions than others. Sounds like a great idea.