The Multi-Network Myth: Facts for Growing an Affiliate Program

MythCropMany retailers with affiliate programs have been sold on the idea that they should run their programs on multiple affiliate networks. They’re told that with more networks, they will have more reach and, in turn, will drive additional sales. While this logic seems sound and there are certainly cases where multiple networks can add value, for the majority of e-commerce players multiple networks can add unnecessary complexity and unintended consequences without reaching the desired objective.

Some Myths vs. Reality in the question of one or more affiliate networks include:

Myth 1: Running an affiliate program on multiple affiliate networks will build up a larger, more valuable affiliate base.

Reality: The number of total affiliates may be higher for programs running on multiple networks, but the good news often ends there. Merchants must take into account the quality of the affiliates in the program and focus less on the quantity. As with most things in life, the 80:20 rule applies. If an affiliate program includes large coupon and loyalty/toolbar sites, it is likely that greater than 90% of sales are being generated by just a handful affiliates.

Most of the larger affiliates, and almost all of the coupon and loyalty affiliates, work on multiple networks and are usually able to work with a program on the network of choice, especially if it’s a well-known brand. Adding more networks might not increase the number of partnerships with large affiliates, but it may increase the number of potentially fraudulent affiliates who now have the opportunity to move across multiple networks. To create and grow a successful affiliate program, it’s better focus on recruiting quality affiliates to the program and then work on getting them active and engaged.

Myth 2: Running an affiliate program on multiple networks is easy to manage because the manager can just repeat what’s being done across all of the networks.

Reality: The reality is that running an affiliate program on multiple networks is a lot of work and can be difficult to manage. The program must be set up on each network, which includes adding banners, text links, Terms and Conditions, application emails, and fees. Once each network is set up, they need to be monitored daily to approve or decline affiliates. This process includes going to their websites and doing a careful review to see if they will be a good fit for the program. Program managers also need to create and send newsletters across all networks, update banners and text links, correspond with affiliates, and monitor for fraud, all of which can be different processes on each network. Don’t forget about funding multiple accounts and all of the work that the accounting team will have to do to reconcile. And then there is reporting. Reporting varies across networks and at times it may be difficult to compare affiliate stats and consolidate data.

Bottom line: Managing an affiliate program across multiple networks is a lot more administrative work. More work = more time and more time = more money spent. This time and money could better be spent on creating ways to empower high-value affiliates to drive new customers and incremental revenue (i.e. affiliate contests, giveaways, or other incentives) as well as targeting and recruiting new affiliates to the program on the current network.

Myth 3: Multiple networks will help drive order volume.

Reality: Although a program’s total number of orders may increase when it launches on a new network, many of these orders are often duplicates, which means merchants might be paying two commissions on an individual order. Two scenarios can create duplicate orders and both are caused by having an affiliate program on more than one network. The first scenario occurs when an affiliate signs up for a program on two or more of the networks being used by a merchant. After that affiliate has affiliate ids with more than one network, they now have the ability to set two cookies for one order which results in the affiliate getting paid commission twice. The second scenario that can result in duplicate transactions is when a shopper goes to more than one affiliate site prior to making their purchase. If a shopper clicks one affiliate’s link from network A and then clicks on a different affiliate’s link from network B, when a purchase is made, the merchant would have to pay both affiliates in both networks a commission for the single sale (unless they have sophisticated de-duping in place).

In general, the biggest players in the affiliate industry are active on all of the major networks and joining multiple networks will not increase the likelihood of them working with a program. While they may prefer one network to the other, when push comes to shove if they want to work with you they will join the network that you are on. When a program starts working with multiple networks they expose themselves to increased administrative time and expenses that would be better spent growing the program on the current network. From one-time set up costs to legal fees and contract negotiations, merchants often spends thousands of dollars on a new network only to find that there are few high value affiliate opportunities that weren’t already available in their current network. The most effective use of time and budget is to focus on growing a program to its full potential. Never assume that the network alone will bring affiliates to your program.

 

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