There are countless ways to market your product—and even narrowing it down to affiliate marketing can lead you to a crossroads: are you looking at an affiliate program or an affiliate network?
It might sound like they're similar, but there are significant differences to note.
In this article, we’ll take a closer look at what the benefits and challenges of each of these tactics are, and how you can choose which one is right for you.
TL;DR
What is an Affiliate Program?
Let’s set the stage and make it clear what we’re working with here.
How Affiliate Programs Work
An affiliate program is a direct arrangement between a merchant (a business selling products or services) and affiliates (marketers who promote these products or services in their own network). It's a structure where you reward affiliates for directing customers to your products or services. Here are some key details on how it runs:
- Setting up an affiliate program: generally, you’d use specialized affiliate management software to craft, oversee, and track your program.
- Recruiting affiliates: this is done by engaging with individuals or companies passionate about promoting your products.
- Managing commissions: there are different ways you can determine commission structures and rates to fairly compensate affiliates based on their performance.
The Benefits of an Affiliate Program
- Control: you have absolute control over who promotes your products and can set up rules to have some control over how they promote them. For instance, you can create rules on what is allowed in terms of advertising in search engines.
- Direct relationships: you can build strong relationships with your affiliates by providing them with direct communication and support. This is not just a plus, it’s a must for running a successful program.
- Fewer middleman fees: you are not subject to network fees; you simply pay your affiliates and for the software you use to run your program with.
Challenges of an Affiliate Program
- Time-consuming management: it does require hands-on management, mostly in communicating with affiliates. Choosing the right affiliate software makes it easier to have oversight and can serve as an easy-to-reach base camp for everyone involved.
- Limited reach: depending on your niche, you are potentially restricted access to affiliates. It’s quality over quantity, so double down on finding high value affiliates.
When an Affiliate Program Makes Sense: An Example
Affiliate programs work for all types of businesses, but it generally works best if your business has a clear assortment or product. Think of a SaaS product for freelancers.
Let’s say your company built a time tracking and invoicing tool for solo entrepreneurs, you can engage with influencers in that industry to promote your product. When sales occur through their efforts, you reward them with a commission.
Related: The Best Commission Setup for Affiliates
What are Affiliate Networks?
An affiliate network works on the same (or similar) principles as a program, but with some important differences in the relationship between businesses and affiliates.
How an Affiliate Network Works
An affiliate network serves as an intermediary between merchants (you) and affiliates.
Essentially, it is a platform connecting various merchants and affiliates.
Businesses can join the network, enlist their products, and affiliates select what they wish to promote. And when it comes to affiliate commissions, the network handles the hassle. For example, tracking sales and disbursing commissions, and retaining a percentage for themselves.
Benefits of an Affiliate Network
- Ease of use: sit back and relax. With a centralized platform, the setup and management process becomes more straightforward.
- Access to diverse affiliates: your products will get exposure to a vast network of affiliates, expanding your reach. You don’t need to promote your program as much.
- Uniform procedures: there are common rules and guidelines across various programs within the network, making it easy to streamline your affiliate marketing efforts.
Challenges of an Affiliate Network
- Network fees: the networks you work with take fees or part of the commission.
- Less control: you have limited direct control over affiliate relationships because the network handles communication with each network affiliate.
When Working with an Affiliate Network Makes Sense: An Example
Imagine a bustling virtual marketplace filled with different stores (merchants) displaying their items, while salespeople (affiliates) select the products they'll advocate. The marketplace manager (affiliate network) takes care of the administrative functions.
Comparing Affiliate Programs and Affiliate Networks
Now you know how both these programs work, it’s time to compare them from different perspectives.
Merchant Perspective
Affiliate Program:
- More control: as a merchant, you have direct relationships with your affiliates. This enables more tailored communication and precise targeting.
- Specific affiliations: you can handpick affiliates that align with your brand and your product, ensuring a consistent, aligned message.
- Manual management: programs often require more hands-on effort, meaning you must actively engage with and manage your affiliates. This can be both a benefit (for a more personalized approach) and a challenge (in terms of time and resources).
- More flexibility: there are different ways to run different types of affiliate marketing programs. You can be creative and find what fits your business.
Affiliate Network:
- Greater reach: with an affiliate network, you're part of a broader ecosystem, tapping into a wider audience.
- Automated procedures: many processes are streamlined, meaning less daily management, but at the expense of personalization.
- Network charges: there's usually a fee associated with using an affiliate network. It's a trade-off for convenience and broad access.
Affiliate Perspective
Beginners:
- Affiliate networks for beginners may offer a more accessible entry point. With more options and guidance, newcomers might find networks less intimidating.
Seasoned Affiliates:
- Direct affiliate programs can yield higher commissions. Experienced affiliates may prefer the control and potentially higher rewards of dealing directly with merchants.
- More tailored connections: building relationships with merchants can lead to more specialized opportunities, aligning closely with an affiliate's audience or expertise.
For Different Business Sizes
Small Businesses:
- An affiliate program is budget-friendly. Without network charges and with more control, small businesses might find direct affiliate programs more cost-effective.
- Tailored approach: smaller businesses can foster closer relationships with their affiliates, creating campaigns that resonate more closely with their brand.
Large Businesses:
- An affiliate network may provide extensive outreach. With the ability to connect to a wider audience quickly, large businesses may find networks more efficient.
- Streamlined operations: for bigger companies looking to scale, the automated nature of affiliate networks might be a big benefit.
Affiliate Network vs. Affiliate Program: Making the Decision
The following factors will help you choose what will be more successful for you.
Analyze Your Business Needs and Goals
- Determine your goals for your affiliate strategy. Is it about building close relationships, reaching a wide audience, or a combination of both? Think ahead about how you see your affiliate efforts taking a place within your business and marketing strategies.
- Assess your resources and how you want to manage the program. If your team has the capacity and desire to manage affiliates directly, an affiliate program may be more suitable. Working with a tool like Rewardful will make this much easier as well. If you prefer a more hands-off approach, an affiliate network can provide that convenience.
Consider What's More Suitable for Your Product or Service
We already gave some examples of where each works best, but keep the following guidelines in mind:
Niche Products or Services - Affiliate Program:
- Targeted marketing: specialized audience focus ensures more relevant reach.
- Personalized communication: work directly with affiliates to create customized campaigns that are on-brand.
- Quality over quantity: focus on quality interactions and building trust within niche markets.
Mass Market Products or Services - Affiliate Network:
- Wide exposure: maximizes reach for products with broad appeal.
- Ease of scaling: easily adapts to increasing marketing demands as the product grows.
Keep Market Trends and Affiliate Needs in Mind
It’s not just about what’s right for your business, it’s also about what the market and affiliates want. Do your market research and keep an eye on what’s happening within your industry to align your strategy. At the same time, stay in contact with (possible) affiliates to find out what setup they prefer. After all, you need them to get on board to make your affiliate program or network successful.
Make Your Affiliate Program or Network a Success
Whatever option you choose, make sure you build a solid foundation. If you’re ready to start building your affiliate program, check out Rewardful and set up your affiliate program today.
