AFFILIATE NETWORK INSIDER: Phonder Technologies

Each day new players are starting to conquer affiliate marketing industry. They all aspire to achieve great success and hope that someday their names will appear along with the affiliate marketing leaders’. Now we could hardly imagine that days and years ago all these giants were newcomers as well. What were they dreaming of? Which problems did they have? What were the key factors of their success? How did they become globally known? What was the affiliate marketing industry like back then?

We continue sharing the answers to these and many more questions in our series of articles, Affiliate Network Insider*, that touches upon the working life of the biggest and most prominent affiliate networks in the industry. Stay with us not to miss newest pieces at Affise blog, and welcome our new guest, the CEO and founder of Israel-based Ad-tech group Phonder Technologies LTD, Ofer Katz.

Ofer Katz, CEO and Founder of Phonder Technologies, LTD

Phonder Technologies is one of the fastest-growing ad-tech companies who owns several projects: AffiliTest — tracking link validation solution, Affiliate-Mob — CPI network, AppMyDay — CPA network, La-Boutique — premium mobile DSP, and Instagage — an automation tool for Instagram campaigns.

– Let’s start with the fact that your name (Ofer — editor’s note) perfectly suits the industry you are working in. Do you feel like it helps you in this business?

It’s actually kind of funny story, as despite the fact that my actual name is Ofer, the affiliates still prefer to call me Offer, like an ad offer in the system. I don’t think it helps me a lot, but it definitely catches everybody’s attention.

– But, I guess, your name was the main factor why you entered the industry, wasn’t it? With such a name you just couldn’t but choose affiliate marketing.

In reality, five years ago I knew almost nothing about this industry. That time I was dreaming about some other thing: we developed our own app which would allow its users to order in different restaurants via one app. Once we were ready to enter the market with this app, we faced the problem that we needed to push it both to the users and the restaurants. So when it came to the promotion we figured out that we need to invest hundreds’ times more compared to the amount we had already spent on the development of this app. That is how we realised that we need to focus on app marketing rather than on marketing of our own app.

These old days: Phonder team in their first office in Tel Aviv

– So, as you were absolutely new to the industry, can you tell me what is the most challenging when you open your own affiliate network?

The major challenge in the very beginning is to convince at least one publisher and one advertiser to work with you. First, you come to an advertiser and say that you have high-quality traffic. Then you come to a publisher and say that you have offers. You have to convince them that you are a trustworthy and reliable partner, because if you have none on both sides, you have nothing, actually.

– How did you personally manage to combat these challenges?

It took some time, and I met lots of publishers and advertisers, till I eventually convinced one from both parties to work with my affiliate network. Also, I did the research, and I found out from the industry that one advertiser was working with the publisher not directly, but there were two more intermediaries between them. So I contacted the end publisher and the initial advertiser from this row and persuaded them to work only with one intermediary, which was me. That situation was beneficial for all the parties: advertiser had to pay less because the number of intermediaries became lower, and the publisher started to get more on the same deal. So this is how we got essentially our first clients.

In five years Phonder Technologies grew up from a small affiliate network to a big ad-tech company with six projects tailored for affiliate marketing needs

– How did the industry look like when you entered affiliate marketing?

When we just started there were already tons of affiliate networks. Everybody who knew at least something about affiliate marketing was trying to open their own networks. Back then, everything was done manually, there was no API involved. So, all the offers were grabbed manually, and the maximum number of offers you could add to the system was about 20 a day. Now everything has changed, the automation is taking over the industry, which is really great and now we can pull thousands of offers just in few clicks.

– As far as I know, you launched your affiliate network on your own. Now it grew up in numbers, and you have already eight team members. How did you build your own team?

As I was not originally from the industry, I didn’t know what the requirements for the candidates had to be. That’s why I focused on choosing people that I could rely on and people who were passionate about everything they were doing. So first of all, I offered these opportunities to the officers from the same unit in my army. And luckily, they agreed to conquer affiliate marketing with me.

Phonder is not only a highly technological company, but also a team of passionate and dedicated people

– What do you think is the main difference between your and others’ affiliate networks?

When we just started we were like everybody else. But now I think there are two main things that make us different. The first one is that our employees are doing nothing but writing codes or doing business development activities. There is no manual work, everything is automated by API: from grabbing offers to optimising them, checking fraud, pausing offers, and checking out whether KPIs are reached or not. We also validate the offers with Affilitest to make sure that they are working and we are not pulling offers with more than two jumps on the way. And the second thing that sets us apart from the competitors is that we are not working on CPI anymore. We are getting paid by CPI, but we are buying all the traffic for CPM, CPC or CPV if it’s pop traffic for example. The thing is that when we started, we grabbed offers by CPI from the advertisers and we bought CPI from affiliates. And today we are not doing that anymore. All our traffic is coming from media buying. So we are working from one model of buying traffic, CPM mostly, to another kind of selling traffic, such as CPI, CPS, CPA. Whatever the advertiser wants, we know how to buy the traffic in order to get the best quality and the best price for the advertisers.

Please, meet Chucha, a dog living in Phonder’s office. Fun fact: Chucha Mobile is a CPA agency named after this cutie.

– How do you attract affiliates to your network?

Initially, we attracted affiliates by offering them the best offers. But today our publishers are not running CPI offers anymore. Instead, they are looking for the highest revenue by CPM. And we do our best to provide them with the technology to help them achieve it. So, most of the Phonder’s revenue is going back to R&D to create much better technology in order to understand how to do media buying in the most efficient way as well as to offer our publishers the best revenue in CPM for the traffic that they already have. And, of course, It also goes without saying that building trusting and long-lasting relations with your affiliates is essential. You need to have good account managers that will help your partners with all the issues that could occur during the working process.

– And what about advertisers? How do you work with them?

We’ve chosen not to work directly with the advertisers since we want to keep a small team. Instead, we are working with the biggest agencies in the world and take offers from them. Besides, as we own Affilitest, most of the agencies and advertisers know us before we even reach them. So it’s usually not a problem for us to find an agency to work with. If it’s a new agency, first we take only one offer from them and do our best to meet all their requirements and to show them the quality of our traffic. Once we proved it, we are getting connected by API to all the offers. Using the automation tools we are pulling all of them, checking rules about payouts, KPIs, categories, and validate them by Affilitest on how many jumps they have to make, as we are taking only direct offers from the agencies. Once we have all in our system, the magic part comes. The advertisers are starting to get traffic, and after three days of testing one offer we can pull the API feed and scale up to millions of clicks a day between us and this advertiser.

Affilitest is an official partner of Affise performance marketing platform, helping Affise clients to validate offers for their workability

– “TOP Affiliate” — what does it mean to you?

If we speak about TOP affiliates from the prospect of business, it is a webmaster or app developer with a lot of unique daily users in his app or mobile website. If we are talking about day-to-day working process, we are looking for someone who is open-minded and ready for new technologies and innovations. It should be a reliable partner, which we can count on.

– Your forecast for 2018: how will the industry change?

We never know what the future holds for us. The GDPR is here, and we still don’t know how it will affect affiliate marketing in the long run. But in general, every person who is working in affiliate industry should be ready for any changes and any challenges. The main purpose of affiliate networks is to make the advertisers satisfied. Affiliate networks are here to deliver traffic to them, to make their ROI much higher and make their performance much better. So, no matter what is going to be in the future, if you choose affiliate marketing as an industry to work in, you just have to meet advertisers’ requirements. And if the advertisers want to change anything, as an affiliate network you should be here to satisfy these requirements and deliver whatever they want time after time like we did all those years.

– What are your top tips for affiliate networks to increase their ROI?

The first tip is to automate as many processes as you can. There are so many routine tasks that can be automated by the solutions that are already available on the market. Not only does it make the life of your partners and employees easier, but also increases your ROI. You can use ready-to-use technologies or develop some according to your specific needs, like, for example, we did with Affilitest. Initially, we made it for our own purposes, and now it is a separate technology any affiliate network can leverage and validate their offers for workability. Second, you have to be involved in the industry. It means that you have to ask your publishers and advertisers about what they expect from you in order to get things better. Because most of the time you think that they need one thing, but actually your partners are expecting from you drastically different things. So don’t play blind, just ask your partners directly about what they are missing.

– What do you think is the main secret of your success?

I don’t think it should be a secret, as in affiliate marketing there is a place for everyone, and everyone can achieve success. As for me, I initially focused on making the advertisers satisfied. In order to do it, we use the best technologies on the market and create our own solutions which help us deliver best value for the advertisers. So if you care about who you are working for, about your partners and your team, your efforts will surely pay off.

* AFFILIATE NETWORK INSIDER is a project, covering success stories and inside life of the biggest and most prominent affiliate networks in the industry. Make YOUR story heard by emailing to az@affise.com.

Written by

Anastasia Zaichko

Head of PR and Marketing Communications

Anastasia Zaichko is a creative B2B marketer, passionate about helping companies achieve their sales, growth and visibility objectives. Weekdays she's all about identifying new opportunities for marketers to grow and get more value from affiliate channel. Weekends include traveling, partying and instagramming about all of the above. She strongly believes in the power of content, networking and the Universe.

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