“A Network is the way to go – I hear they have all the affiliates and handle EVERYTHING.”
“You Should use Hosted Software (SaaS) as it gives you more control.”
If you are at the stage of looking around for the best technology platform – chances are you might have run into other people mentioning the above in reviews, forums, or by general recommendation. I too remember a time when researching the BEST platform for one of the first programs I managed and just felt lost at all the mixed advice.
Know what? You are in good company…many if not all business owners or CMO’s I work with ask me what they think is the best platform that trumps others and the truth is…
There is no one-size-fits all platform
to run an affiliate program on.
The truth hurts sometimes but don’t be discouraged. It’s best to learn the attributes of each type of platform so you can make an educated decision based on what works best for your company.
Below, I discuss the various options: Networks, SaaS providers, and Self-Hosted Solutions and the pro’s and cons of each.
An affiliate network is a “middle man/woman” between Advertisers (You & and Your Company who has offers) and Publishers (affiliates) who promote these offers. They provide a platform to equally handle Advertiser and Publisher Needs.
Why would you go with a network?
TL;DR: For convenience.
- They handle final payments, Tax implications (collecting W9’s or other required forms from affiliates), and any issues with payments between Advertiser & Publisher.
- They have a lot of affiliates registered which for an affiliate is some times an advantage; They use one platform to manage all their relationships with Advertisers (i.e. your company and other affiliate programs they are a part of. ).
Why would you NOT want to go with a Network?
- They are expensive: Not only are you paying commissions to affiliates but you are paying a percentage (%) to the network for each sale. On top of that, many networks have extraneous fees like access to their Network (Network fees) and other small “gotchas” for how your affiliate program is found by affiliates in their system
- Communication: You don’t have access to contacting affiliates directly; you have to work through their platform which often makes it hard to connect with valuable prospects.
- While the network makes final payments, it’s still up to you to: make sure there is enough funds in the account to pay affiliates, ensure that you are not paying affiliates for orders that are fraud or no longer active. If you don’t have the resources to a) have someone pull this each month or b) using a technical solution (like API integration) to check orders referred by your affiliates.
- Lower control: you have to work with limitations of the functionality and reporting of these networks.
SaaS (Software as a Service):
The Software as a Service option is provided by a third-party company: They host the platform/application and then you pay a monthly fee (as the Merchant) to utilize their application.
The Pro’s of using Software as a Service option?
TL;DR: For less dependence on Technical know-how.
- Work 1-on-1 Affiliates: You have direct access to working with the affiliates that are in your program. You can collect the information from affiliates when they sign up
- Technology Reliance: Your company is not on the hook for uptime of your affiliate platform or any tracking issues.
- Feature rich: Most providers offer significant amount of features- reports, advanced affiliate tools, and other options that can really boos your program.
- Support: Many if not most of the SaaS providers offer some level of support to you (the Advertiser) and some of them offer some limited support to your affiliates.
Why you wouldn’t want to use a Software as a Service solution?
- Can be Costly: Many SaaS providers charged based on your affiliate clicks, impressions and/or how many payments you issue to your affiliates each month. If one of your affiliates pumps up their traffic (despite if it is legitimate) or has a spike in sales – it can cost you $$$.
- Ability to Migrate: If you ever decide to move away from a SaaS platform it often can be hard as many providers don’t have good export tools or just plain don’t allow them.
A self-hosted platform is exactly what it sounds – you download software, and then upload and run it on your own server.
Why would you go with a self-hosted solution?
TL;DR: For the budget-friendly and the ability for full control and customization.
- Lower Costs: Since Self-Hosted Solution are typically one-time, fixed costs to buy the software license, it makes it easy on the wallet.
- Complete Access: Since you run the software on your servers, you have full control of all the data, tracking, as well as the ability to tie in any other technology you use within your organization (Google Analytics or other tracking platforms).
- Program Customization: You can setup your affiliate program guidelines how you want them completely up to you. If you’d like to control how affiliates sign up for your program, send them emails a certain way, collect data a certain way – all is a possible with a self-hosted solution.
Why would you reconsider a self-hosted solution?
- Technical Infrastructure required: It’s very important to have your affiliate program up and running all the time so you can track all sales when they happen. If you don’t have the technical team or infrastructure to support it – it can be quite tough.
- Maintenance: You will need to upgrade the software whenever there is a new version. If you don’t, there could be serious security concerns.
As you can see, there are a lot of points to consider when picking the right platform and remember: no matter what platform you choose you still need to be responsible for recruiting affiliates, optimizing their performance, as well as reviewing activity for compliance and potential fraud.