Аffiliate marketing is one of the most effective ways to keep a steady stream of high-intent leads besides earned media. The numbers don’t lie: affiliate marketing spending in the United Kingdom reached £1.1 billion, where UK publishers see an incredible 229% sales boom from affiliate marketing.
Thus, many marketers want to join this lucrative opportunity. However, one question constantly weighs on the minds of merchants: should I create an affiliate programme on my own, or should I join an established affiliate marketing network and draw customers from there?
Without any further ado, let’s review both options.
Learn affiliate marketing through and through with Phonexa’s Affiliate Marketing Podcast.
Affiliate Network Definition and Operating Principles
An affiliate network, or affiliate marketing network, is a platform that connects businesses willing to buy traffic (known as advertisers or merchants) with companies willing to sell traffic (known as affiliates or publishers). These platforms act as intermediaries, facilitating the partnership and tracking the performance of the affiliate marketing campaigns.
There are various platforms: B2B affiliate networks, B2C networks, and even B2D platforms. The general process of joining a network (whether it is a health affiliate programme, retail, real estate or any other affiliate) looks the same:
- Advertiser joins network: A business looking to promote its products or services joins a global affiliate network. They create an affiliate programme, setting terms like commission rates, payment methods, and tracking cookies.
- Affiliate joins network: Individuals or entities interested in earning commissions by promoting products or services join the same network. They can browse available programmes on affiliate network platforms and choose programmes that align with their interests or audience.
- Affiliate promotes products: The affiliate creates content (e.g., blog posts, social media posts, videos) to promote the advertiser’s products or services. They include unique affiliate links within their content. These links track clicks and conversions.
- Customer makes targeted action: When a customer clicks on the affiliate link and makes a targeted action, the affiliate CPA network tracks it and attributes it to the affiliate.
- Affiliate earns commission: The advertiser pays the affiliate network a commission based on the agreed-upon terms. The network then pays the affiliate their commission.
Source: Understanding Affiliate Marketing Ecosystem
The Pros of Joining an Affiliate Marketing Network
| Unlimited Choice of Affiliates | Top affiliate network programmes unite hundreds and thousands of affiliates, so you can tap into a constant stream of leads while getting the target lead quality at the predetermined price. On the other hand, if you decide to start an affiliate programme on your own, you will have to start from scratch and gradually grow your network. |
| Cost-Effectiveness | Joining an affiliate network is free, and you only pay a commission from sales, leads, or clicks on affiliate links. You pay for what you get with little to no upfront costs and no risk. Choose a desired action and look for a CPA affiliate network where you only pay once the action is done. |
| Unlimited Reach | An affiliate programme network gives you access to advertisers from various related niches, allowing you to tap into untapped markets and test specific audiences. Meanwhile, you can set your own precautions, like a budget limit or lead quality screening. |
| Access to Affiliate Software | Most affiliate marketing networks will provide you with affiliate network software that tracks your affiliates, analyses your campaigns, and issues payouts.Some networks will even provide white label affiliate marketing software you can brand as your own proprietary software. |
| Fraud Prevention and Compliance | Affiliate networks use sophisticated fraud prevention measures like traffic quality control, conversion validation, payment verification, and more, maximising the performance of leads, clicks, or conversions you pay for.Top affiliate networks comply with the FTC Guidelines, the CAN-SPAM Act, and other nationwide and local compliance requirements. |
An advanced affiliate marketing network allows you to pinpoint target audience characteristics (demographics, psychographics, etc.) and run an affiliate programme to collect perfect leads for your case.
The Cons of Joining an Affiliate Marketing Network
Joining an affiliate network is the easiest of the options, but you should still be aware of potential challenges along the way:
- Fierce competition: There are dozens of advertisers in the same network. All things being equal, the highest price per lead wins a competition and gains a potential customer. It can lower the cost-effectiveness even of the best affiliate network.
- Lack of control: Despite the strict screening most affiliates undergo, you may not always guarantee the quality of the traffic source. Muddy schemes like cookie stuffing, brand bidding, or cookie dropping might harm your potential campaigns.
- Commission costs: Affiliate marketing networks can eat away your profits quite significantly, charging up to 30% of the affiliate’s commission earnings. For every $1,000 paid in affiliate commissions, you might have to leave $300 on the table.
Finally, it may not be the best idea to rely on a single affiliate marketing network as your primary traffic channel. Marketing is a constantly changing industry, so what could work today may become irrelevant tomorrow.
Why Choose Joining an Affiliate Network Over Creating an Affiliate Programme?
Running affiliate programmes will work best for small businesses with limited resources, companies under time pressure, those unwilling to spend their resources on affiliate programmes, and those trying to figure out how things work before committing to an independent affiliate programme.
Source: Understanding Affiliate Marketing Ecosystem
Can You Start Running an Affiliate Programme on Your Own?
Creating your own affiliate programme is challenging but still possible. Top affiliate marketing networks like Amazon Associates, Awin, and ShareASale unite hundreds of thousands of affiliates, with smaller brands also running independent affiliate programmes.
Affiliate programme management is easier than you thought. Many platforms offer automation features that can streamline tedious tasks like tracking sales, paying commissions, and generating reports.
Affiliate Network As A Way to Grow Your Brand Name
Starting your affiliate programme is a great, affordable way to increase brand awareness and generate leads. By leveraging the efforts of affiliates who promote your products or services, you can tap into new audiences, increase visibility and enhance your company’s credibility.
Affiliates often include backlinks to your website, which can improve your search engine rankings. It’s easy to scale up or down your affiliate programme based on your marketing goals and budget.
Use this guideline to keep track of affiliate programmes to ensure you’ll get the most out of this marketing practice.
Step 1 – Set Your Goals
The first thing you should do is decide what you want to achieve. Base your decision on your value proposition, the current state of the market, and the analysis of your affiliate network.
Whether you are to tap into complex markets – say, an insurance affiliate programme or less competitive markets like digital goods or beauty, you must quantify the numbers in the first place.
Here are some statistics that might help you choose the right affiliate market, according to the Affiliate Marketing Benchmark Report from Influencer Marketing Hub:
- The three most popular affiliate markets are retail (44%), telecom & media (25%), and travel & leisure (16%).
- The most rewarding affiliate categories are SaaS affiliate programmes (up to 70% commission from the sale amount), finance (up to 40%), eLearning (up to 30%), and beauty & health (up to 30%).
- For 67% of marketers, affiliate fraud is a concern, with 69.1% having experienced it at least once in their career.
Wonder how well you are protected from affiliate fraud? Complete this fraud prevention quiz.
Source: Affiliate Marketing Benchmark Report
Step 2 – Choose Your Payment Model
Once you choose a preferable network, it’s time to determine your payment model. The most common are the next 4:
- Pay-per-lead
- Pay-per-sale
- Pay-per-click
- Pay-per-action
Depending on your business objectives, you are free to combine multiple commission types and objectives, from cost-per-lead programmes to pay-per-call affiliate network programmes to hybrid programmes where every affiliate can choose what they are paid for.
Source: Affiliate Marketing Benchmark Report
Step 3 – Choose Your Affiliate Software
With affiliate marketing SaaS software growing increasingly popular – 73% of marketers prefer it to affiliate network software – there’s almost no viable alternative to renting your software from a third-party provider.
Even though you have less control over such software because you don’t own it in the background, white label affiliate software appears as your own proprietary platform on the affiliate’s side while perfectly serving your marketing goals.
The market offers affiliate software of any type, from simple open-source affiliate tracking software that helps you monitor links to multi-tier affiliate software to comprehensive solutions like Phonexa’s Lynx that synergise affiliate programmes with your other marketing efforts.
Book a demo to learn more about Lynx and how it blends into Phonexa’s performance marketing ecosystem, or order your all-encompassing affiliate marketing software suite if you already know the tool’s benefits for your case.
Step 4 – Design Creative Materials
Promoting through an affiliate programme goes far beyond placing a link on the publisher’s website. You should look for affiliates whose promo channels suit your strategy. At the same time, you need to ensure that their content fits your strategy and use approved promo materials.
For instance, Instagram and Pinterest users are more likely to react to quality images, whereas TikTok audiences are most susceptible to visual storytelling.
Source: Statista
To stand out from the crowd and increase the quality of inbound affiliate traffic, develop creatives for every type of affiliate you are going to partner with. It could be links, banners, product images, email templates, landing pages, infographics, case studies, testimonials, product data feeds, etc.
If you want to build an affiliate network and simplify things for your publishers, let them use your affiliate software and assign a dedicated affiliate programme manager to help them set up and properly run a promo campaign for your business.
Step 5 – Launch Your Affiliate Marketing Programme and Onboard Affiliates
Double-check the agreement of the white label affiliate programme before you kick things off. You need to ensure that all parties understand all peculiarities of the collaboration, including affiliate programme compliance with all regulations. Pay attention to the following:
- Definition & interpretation of the terms used in the agreement
- Application process and acceptance
- Payment terms and commission structure
- Affiliate programme compliance
- Consequences of programme violation
Some niches like healthcare, business, finance and insurance need special attention. With those industries, one wrong word may lead to huge charges. As an advertiser, you need to ensure that an affiliate agreement is enforceable, clear, and comprehensive.
Write down penalties for an affiliate programme violation. It might be a good idea to consult with a legal professional to make sure you are on the safe side.
Source: Understanding Affiliate Marketing Ecosystem
The Hard Choice: To Create an Affiliate Programme, Or To Join an Affiliate Network?
Those who want full control over their affiliate marketing campaigns or are looking for more direct relationships with affiliates will appreciate the idea of developing their affiliate programme. However, you need to be sure that you have enough resources to manage the programme.
Lastly, owning an affiliate programme and enrolling in third-party programmes run by affiliate network platforms are not mutually exclusive. You can combine both strategies to boost your exposure and leverage your online promotion strategy.
Frequently Asked Questions
What is an affiliate network?
An affiliate network is a platform that connects businesses (advertisers) with entities (affiliates) that promote their products or services. As an advertiser, you join the network and ask affiliates to promote your product. Affiliate joins the same network, agrees on your terms and starts to create content to promote your product, earning commissions from leads’ targeted actions.
What are network affiliates?
Network affiliates are individuals or entities that promote the products or services of businesses within an affiliate network. They earn a commission for each sale or lead generated through their efforts. The most common affiliates are website owners, content creators, influencers, and email marketers.
Can I use my own affiliate link?
In most networks, you can use your own link to track performance. But it’s rare that you can earn commissions from using your own affiliate link. However, in some networks, this practice can be considered a violation of network rules. So, we recommend you to read its terms and conditions.
How to create your own affiliate programme?
The first step in developing an affiliate network is to define your goals, choose a niche and select a network where you can create your own programme. The next step is to set rules, commission rates, tracking methods and develop marketing materials. Later, recruit affiliates by offering attractive incentives. Track program results and provide constant support to affiliates.
What are sub-affiliate networks?
These are networks where affiliates can recruit additional affiliates ( “sub-affiliates” or “downline affiliates”) to promote products or services. When a customer makes a targeted action through a sub-affiliate link, the multi-tier affiliate software tracks it and both affiliate and sub-affiliate earn a commission.
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