Technology plays an essential role in the Performance Partnerships® framework.
You and your partners could have a mutually beneficial, transparent partnership that’s based on trust and respect and be completely aligned with a cost per action compensation structure. However, if the technology isn’t in place, managing, scaling, tracking and measuring the performance of these partnerships in an efficient way is virtually impossible. At the very least, it would be mind-numbingly manual, time-consuming and unproductive.
Fortunately, there are multiple technology platform options available to those who want to make performance partnerships part of their marketing and business development endeavors.
Affiliate networks are broken down into two types: full-service and independent. Both types act as an intermediary between performance partners and brands. Affiliate networks are set up to handle the tracking and reporting of affiliates’ activities and automatically pay out commissions to them based on specific rules set by the brand.
Many networks also host brands’ program creative (banners, links, etc.) and promote their program to a large pool of affiliates who are members of that network. For their services, affiliate networks primarily charge their clients a performance fee, which is typically a percentage of program revenue (e.g. 1-2%) or commissions paid to affiliates (e.g. 30%).
Full-Service Affiliate Networks
A main difference between a full-service affiliate network and an independent affiliate network is that full-service affiliate networks offer affiliate program management.
Independent Affiliate Networks
Independent affiliate networks do not offer affiliate program management. As such, independent affiliate networks are typically a lower cost option than full-service networks.
SOFTWARE AS A SERVICE (SaaS) PLATFORMS
SaaS platforms are not “networks” in the traditional sense as they do not provide traditional affiliate program management services. Their focus is on offering high-value technology for an affiliate program to run on and offering white-labeled affiliate network technology to manage “direct” affiliate relationships for brands. SaaS platforms also have the ability to create custom technology solutions for their clients.
If a company does not have the resources or expertise to manage their performance partner program in-house and chooses a program management agency (e.g. Acceleration Partners) to handle the day-to-day management of it, the SaaS provider will work closely with that agency to ensure all affiliate performance is being properly tracked, measured and compensated.
SaaS providers tend to offer a variety of fee models, including fixed, volume/transaction-based and performance fees. Several SaaS providers also offer fixed-fee or usage-based pricing models that are not tied directly to revenue or to commissions.
TECHNOLOGY OF TOMORROW
Companies are now asking very different questions related to their performance partner programs than they did ten years ago. They want to know about strategy, innovation, incrementality, attribution and account management, whereas previously they were more interested in tracking and payment details.
Industry-leading companies increasingly want control over their brands and their partners in the same way they would if they were setting up brand licensing programs. They want to understand exactly what technology and services they are paying for. They want clear accountability and separate service-level agreements for each segment of their contracts. They also want the ability to combine the data from their affiliate programs and their partners with other areas of their marketing-technology stack.
While technology exists that delivers on these needs and wants, it’s growing in sophistication and efficiency.
Thanks in large part to these advancements in technology, future performance partnership programs will become increasingly customizable and personalized. Brands will find it possible to design their programs to reward very specific behaviors that match their desired business strategy and establish entirely new types of partnerships that companies in any industry or business vertical can benefit from.
To learn more about affiliate networks and SaaS platforms, check out our quick guide.