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View Full Version : Merchant Question: Affiliates vs. results based networks


WildComputer
01-30-2001, 06:51 AM
I was wondering if anybody (merchant) has experience or comments on using a pay-per-action network as opposed to starting an affiliate program.

I realize from the host/affiliate's point of view the two are very similar, but what about from the merchant's point of view?

(by the way I realize this might be read by some, as an invite to send me e-mail about your results based network, that is fine within reason, my address is webmaster@ans2000.com - but please do not send any massive Word or PDF files as attachments)

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Czar
01-30-2001, 05:49 PM
The obvious drawbacks regarding launching your own affiliate program are these:

1. You need to send individual cheques to affiliates and possibly make necessary filings to the IRS, or similar tax office.
2. You'll be required to provide all support to affiliates.
3. You'll have to place your own anti-fraud systems in place, and monitor these for cheats.
4. The affiliate management software that you choose may require expensive outlay.
5. You'll have to promote the program yourself, rather than tap into an established group of publishers.

PROs:

1. The whole program is branded to suit your site.
2. Possibly more affordable over the long term, since commissions aren't taken into account.

Using an existing pay-per-action network has these drawbacks:

1. Difficult to offer custom solutions to individual affiliates.
2. You're subject to the anti-fraud systems used by the network (could be a Pro, or Con, depending on network)
3. Need to pay commissions, and reach minimum levels of activity/month (CJ)
4. You must compete against other sites in network for publisher attention.

PROs:

1. Easy to manage affiliates, and smoother rejection process.
2. Network provides all hardware, resources and support, which reduces your bandwidth and support expenses.
3. Anti-fraud systems in place.
4. No need to promote program, as you are automatically given access to 1000s of publishers interested in lead and sale-based programs.
5. Generally inexpensive setup, which can prove to be cheaper than even a free CGI-based system, when your time is taken into account.

Personally, I've tried both of these methods, but gave up on running an individual affiliate program due to payment problems (being based in Australia is a big hassle in this regard, when most publishers want to be paid in $US - things may be better these days, now that PayPal is in place).

I've used ClickXchange and ClickTrade as a merchant, but will be starting my next program with CJ, who seem to provide the highest-quality program, while also attracting the highest-quality affiliates. If you need a highly customisable program, and would like to maintain some branding, BeFree's Reporting.net may have a solution to suit.

Overall, I'd say that the networks provide better solutions to most sites. You are required to send payment to just one source, while they handle all tax issues, payments to affiliates from all over the world, removal of cheats, etc. There's nothing more valuable than your time, and you'll find this leeched away if you need to manage 100s of individual affiliates.

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Czar
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