An affiliate network is essentially an intermediate between publishers and merchant affiliate programs. Affiliate networks help publishers or affiliates as they are commonly known, to easily find out the affiliate programs that will generate more traffic and hence more revenue for their websites. It also allows the online merchants to promote their affiliate programs to all publishers who are participating in the affiliate networks. It is a mutually beneficial scheme for publishers and online merchants to gather at one place and reap in the benefits.
Affiliate networks are based on the concept of revenue sharing that is, they let merchants offer a part of revenue generated to him from visitors to the publisher’s site. This may also be a fee for each visitor on the site that undertakes and completes a particular action like making a purchase, or for registering and subscribing for a newsletter or a magazine. But generally revenue sharing is the common method as compared to or opposed to a fee-per-action model. Affiliate networks with many advertisers also attract a large pool of the publishers. Big affiliate networks generally do not need to recruit publishers as the publishers already flock to them on their own. Generally websites that attract the same kind of target audience as the advertisers but without any competition in them are typical affiliate network partners.
Affiliate networks have grown rapidly since their inception. Viewed as marketing toys in early days of internet, they have become an integral part of business plans of many organizations around the world. In fact they have been so successful that they have grown into bigger businesses than the existing offline business. The total sales amount generated according to one source by affiliate networks is £2.16 billion in UK alone for the year 2006. In the same year for the USA the total bounty amounted close to US $ 6.5 billion.
Affiliate networks are primarily used in variety of sources like retail, gaming and gambling, personal finance, travel, education, telecom and publishing. Traditionally the affiliates are allowed to join the network free of cost while there is generally a nominal fee for the merchants to participate. The network also charges an initial setup or a membership fees which can be recurring. Although affiliates join for free but they pay a certain percentage of their earnings as commission to affiliate network.
Affiliate networks are a large conglomeration of publishers and merchants working towards a common goal, profit realization. Merchants derive benefits like tracking technology, payment processing, reporting tools and a large pool of publishers from the affiliate network. On the other hand affiliates derive services and benefits like affiliate programs, reporting tools and payment aggregation using the network.
Hitching your wagon to a star is a time-tested way of getting far. Advertisers need to hook on to robust affiliate networks and further their cause through illustrious affiliates. Win-win-for-all affiliate networks are the order of the day for merchants seeking world wide audience for their products, especially of the software variety.
Most networks follow a revenue-share model with the advertiser. If he sells via the network affiliate, he pays the affiliate as well as the network a commission. Commissions to the network may be 20% or even 30% in some cases. Affiliates lend their technology, reporting tools and creatives (banners, spot, links) and charge per click, per lead or per sale. Rather a costly affair, if you are a merchant. You pay even if there is no sale.
What, then, is the best affiliate network for you? Obviously an affiliate network with low operational costs and the willingness to go the extra mile. Fortunately, affiliate networks around the world are sprucing up their act. For starters, there is no set up fee, for advertisers and for publishers and there is free real time service and support and quick turnaround for advertisers. Then there are networks that charge no commission. They are simply an interface. They generate their income from pop-ups on the publisher’s screen, at no extra cost to the publisher. To make things easy for registered members, there is a control panel reporting service where you keep track of your orders and payments.
Networks also do other nice things for members like placing 120-day cookies in the visitor’s browser. If he places an order during this period, the advertisers account is credited. Affiliate networks are also increasingly taking on accounting services and affiliate payouts on behalf of merchants. In fact, they have organized support cells to deal with customer queries. Also, the convenient prepaid MasterCard’s offered by some networks have wide acceptance. In addition, check if the local affiliate network propels you easily into a global network. Do read through the FAQs on the network website to get the details of how they work.
Networks have a list of affiliate programs and publishers and advertisers are free to strike a deal with the other. Typically, the best networks are the CPA variety – Cost Per Action. As an advertiser you would pay the publisher only if your banner on his website sent the visitor to your website to make a purchase. You also get the benefit of the publisher’s affiliate network. CPM and CPC networks, where you pay the publisher for every lead generated (form filled) or every mouse click, respectively, are more publisher-centric than advertiser-centric. The flip side is that there are heftier commissions to pay on the CPA networks, though you gain on volume.
All it takes is a thorough research to zero-in on a program that works best for your site.