Eric Nagel

For some reason, in one of the niche’s I’m in, over half of the merchants that have affiliate programs decided to use (or create) an in-house system, avoiding networks. While there may be some benefits to using an in-house system (such as avoiding network fees & overhead), I think in the long run, merchants will have greater success with their affiliate program if they use a network.

Networks not only handle the tracking and payments for an affiliate program, but they also act as the policemen, making sure affiliates are not defrauding merchants, and that merchants are not cheating affiliates out of their commissions.

But when an in-house program is used, affiliates must assume that what is reported in the tracking reports is accurate, and hope they get paid on time.

Lately, that hasn’t been the case for one particular merchant I’m promoting. Tracking is way off and completely inaccurate (for example, they tried to tell me I sold -40 subscriptions last month (that’s negative forty. When I questioned this, they sent over a new report with new numbers, but insisted the payment was not affected)). In addition, payment was late this month.

Affiliate’s Point of View

I asked a few industry friends about working with merchants in and out of a network.

Lee Robertson of LGR says that when working with a merchant who uses an in-house affiliate solution, It can be faster to get special deals, (and) coupon codes. There seems to be a closer relationship with the in house affiliate managers. However, in-house programs lack… decent tracking.

Joe Sousa works with in-house programs only because they have something to offer that you can’t get through the network such as creatives, promotions, datafeeds, etc. Joe also mentioned tracking and trust regarding networks: I like the security of the networks. But, that doesn’t necessarily mean he’ll avoid in-house programs. If I can switch to in-house and get a bigger commission it can be worth the extra hassle.

Tricia Meyer from SunshineRewards.com reports problems with both tracking and payments when working with merchants & in-house programs. One of the biggest problems is that there is less accountability. With a network, I can have my rep check out their numbers… With an in-house program, I have no one else to advocate on my behalf.

Lee, Joe and Tricia all said they prefer working with a network versus an in-house program, thanks to regular payments, easier tracking, and programs / scripts that are already integrated with the network APIs.

Lee adds, I am more likely to promote a merchant that is a part of a network. It shows the merchant is serious about their program.

Merchant’s Point of View

To try to fully understand this topic, I asked a couple of OPMs the same questions.

Greg Hoffman of Greg Hoffman Consulting told me about moving a program from an in-house system to a major network:

The affiliates had never been communicated with; they had never been paid and they had no creatives. But with one text link, they had sold thousands of dollars worth of product. They happily changed all of their links to sign up with the new network because of the accountability and safety offered by the network. That program is thriving today.

Geno Prussakov, OPM with Affilinomics by AM Navigator, recommends merchants …start their very first affiliate program on a network, and, if it makes sense to migrate to an in-house platform in the future, do so later down the line. Geno has even written about this topic before, Network or In-House?

In-house affiliate programs certainly help save money on network fees and may seem to provide a greater degree of control, but it should be remembered that running a program inhouse will necessitate tracking software (self- or remotely hosted) or a shopping cart with affiliate features. Internal resources will also have to be made available to run reports, be accountable for all technical issues, and for paying affiliates.

I’m not going to get into what network is best for you (again, Geno wrote a piece on this published in FeedFront). Sometimes, one has a different advantage over another. And don’t believe the hype that affiliates will only work with certain networks: if they want to be in your program, they’ll join the network.

However, I am going to recommend that merchants running (or thinking of starting) an affiliate program seriously consider signing up with a network, who are experts in tracking, payments, and can act as a mediator between affiliates and merchants.