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The world of digital marketing continues to evolve. As more consumers look to shop online, ecommerce businesses are embracing diverse marketing strategies to gain market share.
Website SEO, email marketing, content creation, and customer referral programs are some of those key strategies implemented today. In order to really excel, businesses are combining these with another tactic: partner marketing. However, finding people to work with can be tricky, and that’s where affiliate networks come in.
What is an Affiliate Network?
An affiliate network is a third-party marketplace that facilitates marketing partnerships. In other words, an affiliate network is an intermediary between publishers and advertisers. Strong affiliate networks create a win-win situation for all parties involved. Brands and agencies get to expand their reach, and affiliate partners earn commission from leads and sales generation.
A cost per acquisition (CPA) network streamlines the process of matching affiliates to ideal offers and brand partners. Affiliates get to build a passive income stream, while brands get upfront access to the followers of their chosen partner to promote their products and services.
Affiliate marketing is here to stay. Take advantage of our an all-in-one platform to build a strong network
Why Start an Affiliate Network?
There are several reasons why you should consider starting an affiliate network.
You already have a successful affiliate marketing program. Through hard work and determination, you have set up a steady flow of relatively passive income as an affiliate marketer. You have demonstrated your ability to build trust with audiences, network with advertisers and brands, and have mastered online marketing. Maybe it’s time to leverage this experience to level up your income possibilities.
You want to expand the reach of your brand, but on your terms. Affiliate partnerships can help your brand reach new audiences and experience rapid growth. But third-party affiliate platforms come with terms and conditions, as well as fees. While starting your own network can be a costly and resource-heavy investment, it can pay huge dividends in the long term.
You are an ad agency that wants to go solo. Many agencies depend on intermediaries to facilitate the linking and tracking of their affiliate marketing efforts. They likely pull in many brands on their own. However, they are losing a portion of their commission to third-party networks. By investing in building an affiliate network, you will be getting rid of the middleman and maximizing profits.
How do Affiliate Networks Work?
How about a brief history lesson? The birth of affiliate networks was in 1998 when Commission Junction was created. Soon after, the CJ Affiliate network and ClickBank started the first major affiliate network together. Since then, many new affiliate networks have been built, among which the largest right now are CJ, Rakuten, Awin, Amazon, ShareASale, and eBay.
Before an affiliate network can get up and running it will need to establish connections with brands or advertisers from one side, and publishers and affiliates from the other side. When both of them sign up to the network, advertisers can add their affiliate programs and connect them with publishers to form valuable marketing partnerships.
Partnership networks are expected to help manage affiliate programs, track affiliate progress, and procure commissions. They’re also responsible for connecting advertiser offers and their affiliates, who go on to drive traffic to their partnered brand.
As a third-party facilitator, affiliate networks make their profit on the difference between revenue from advertisers and payout to affiliates.
7-step Guide to Start an Affiliate Network from Scratch
Building an affiliate network from scratch can be a massive project to take on. Following a step-by-step process will help beginners avoid pitfalls and optimize the process with best practices.
Step 1. Find the Best Available Advertisers
Like many paths to business success, the first step can often be the most difficult. You can overcome any inertia by doing research and focusing on your niche. Leverage your areas of expertise to help you find your best potential advertising partners.
Big brands and advertisers probably already have long-term contracts with their affiliate networks. It’s unlikely as a newcomer that you will be able to convince these types of businesses to leave their current partner and join your network.
You will find more success by reaching out to smaller companies and growing startups, or shopping for brands that have not yet tapped into the power of affiliate marketing. You might also have luck stepping into a new niche that won’t have pre-established relationships.
Step 2. Choose the Right Affiliate Software Solution
For your affiliate network to operate as intended, you’ll need to be using high-quality tools. This means using the most modern and intuitive platforms for affiliate network management. Between all of your clients and affiliates, you will have a lot of lines to avoid crossing and plenty of data to track with accuracy and precision.
Affiliate tracking software will help you get more done in less time. That means you and your team can focus your efforts on other areas of your business. You don’t want software that only tracks clicks. Instead, choose a platform that helps you optimize affiliate and ad performance, manage finances, and automate tedious and time-consuming tasks.
Today’s best affiliate management tools are SaaS platforms. This is because they are much more cost-effective, adaptable, and efficient when compared to in-house affiliate management solutions. And, with tools like CPAPI, it’s easy to transfer data from numerous sources.
Step 3. Get Your Affiliate Network Secured from Ad Fraud
Despite our best efforts, ad fraud will likely never be eliminated from the internet. The best the experts can do is try to stay one or two steps ahead of black hat users that lurk the corners of the web seizing every opportunity.
For the unfamiliar, our downloadable white paper will help protect your network from marketing fraud. After all, if you can’t guarantee the safety of your clients, you’ll struggle to keep them around.
By doing your research into the most common fraud types and prevention measures, you will be ready to build a reliable and trustworthy affiliate network. That doesn’t mean you should be managing security manually, however – once you have a platform in place, you should automate as much of the security process as possible.
A platform like Affise lets your managers automate fraud prevention and security. Since it’s a subscription service, you will be able to sleep well at night with the knowledge that your security tools will always be running and up-to-date. All maintenance and updates will happen in the background on the cloud.
Step 4. Attract Trusted & Experienced Affiliates
Once you’ve proven yourself to enough brands and advertisers, you need to sell yourself to potential publishers and affiliates. If you have experience with creating an affiliate program, you can use those real-world examples via webinars and case studies to attract your target audience.
Otherwise, take your niche expertise and target potential affiliates by promoting your network on the right channels and platforms.
This might seem challenging, but luckily, technology is here to help. You can simplify the recruitment of new publishers with the help of dedicated services such as Affise Reach. With our global database, you can easily connect media partners, advertisers, and brands with the right traffic channels.
Affiliate software solutions can also provide detailed and easy-to-understand metrics, statistics, and analysis for both brands and affiliates. Any service worth using will provide a separate portal or intuitive interface for your clients. With a solution like Affise, you can set the category for each affiliate offer and customize product descriptions.
Promotion is the first step to empowering your network. But remember, even though you are necessarily taking any money upfront, you are still asking potential affiliates to take action and click that “sign-up” button.
Your affiliates are your customers. So you need to sell your network to them like any other product or service. How will you do this? Well, like your brand and advertising partners, with landing pages.
Your affiliate program landing page should contain the following main points:
rewards from each affiliate sale (commission) and whether there are commission tiers
length of cookies (days, months)
the first, the last, or all referring affiliates will get the commission;
prohibited traffic sources, violations, and terminations
flexible payment methods
brand guidelines (creatives).
Outlining these components of your network and affiliate program is the bare minimum. Your network will also need to differentiate itself from competitors. It’s important to have a unique selling point (USP) and make it clear throughout your sales copy.
Keep your message clear and concise. And be sure to have big and obvious CTA buttons and forms. You can read more insights about how to find and attract reliable affiliates in our recent blog post.
Step 5. Create an Appealing Reward System
One of the biggest misconceptions is that affiliates are there only because of the affiliate commissions. Payouts are definitely important, but they may not be enough to keep partners in your network for a long time. Affiliates will always be on the lookout for networks that offer the best incentives. You want affiliates to stick around you for years.
Less experienced affiliates will be likely to change marketing partners and strategies often before they find their groove or abandon the industry. You can help to avoid your network becoming a casualty of affiliate churn by putting an effective long-term incentive system in place.
Affise lets you choose from a flexible range of payout methods including cost per click (CPC) and cost per thousand impressions (CPM) campaigns. Adding multi-tiered rewards and incentive-based targets can boost affiliate motivation and performance.
By using a partner tracking platform like Affise to accurately monitor your affiliates, you can ensure you’re sending your best offers to your best performers. And, if you have a few partners that aren’t doing so well, you can look for alternative marketing tactics to help them out.
By using an affiliate management system, your partners will be able to track their own performance and progress towards earning commissions and other rewards. Sometimes, there is nothing more motivating for affiliates than to be able to see the numbers increase before them.
Real-time performance monitoring essentially gamifies your affiliate program for more active participation and focus from your affiliate partners. When your partners see that you are putting in such great efforts to help them be successful, they will reward you with their loyalty.
Step 6. Track Performance & Results
Affiliate networks work like a relay. There are multiple team members and each does their part and hands off the baton to the next member in line. But to win the race, each member whether brands, advertisers, networks, publishers, or affiliates must perform their best.
When it comes to making a sale in ecommerce, there’s no room for weak links here. So how do you avoid the pitfall of a bottleneck in your operation? And how do you fix any areas that are broken or need improvement?
The simple answer is data. The longer answer is that you shouldn’t just be providing statistics and analytics to brands and partners – you should be using it yourself. Tools like Affise BI and it’s integrations provide you with a great way to manage unstructured data from a huge variety of sources.
With this information at hand, you can make data-driven, effective decisions. And perhaps more importantly, you allow your network to become the facilitator of information in your role as a partnership bridge-builder.
Affiliate networks like Adstart Media provide both advertisers and publishers with configurable and convenient dashboards. You can monitor which publishers are showing higher conversion rates as well as what campaigns are performing better.
Step 7. Get Sustainable Profits from Your Affiliate Network
Now it’s time to shoot for the moon! You’ve carefully constructed your network template and you’ve acquired interest from both sides of the affiliate world. Time to assemble the remaining pieces of the puzzle, sit back, relax and reap the financial rewards right?
Not quite. While it’s true that a lot of the hardest work for any startup network involves getting the company off the ground, you’ll need to work just as hard to maintain your network.
You may experience a nice turnover and see profits early on. However, Advertising campaigns get sustainable profits when they are properly optimized and automated. The time you save from automation will let your team leverage analytics data for improvements and actionable insights.
There is a lot involved with starting and running a successful affiliate marketing network. The following are some of the modern best practices for affiliate networks to implement.
Familiarize yourself with different networking options
If you have recently had the epiphany that you should start your own affiliate network, you will want to carefully consider the different networking options available to you. Your niches will guide you on your journey to finding brand and advertising partners.
What you may find less natural, is how to find your affiliate partners. On the affiliate side, your potential parents will fall into one of three main categories:
Publishers: can range in size and scope from affiliate sites to landing pages. These types of partners may be the easiest to utilize, but with less focused and targeted audiences. Partner marketing can be an appealing option for generating extra revenue.
Solo marketers: those are in it for the side hustle and/or eventual full-time passive income. They may own a range of diverse websites or have a large email list as part of their affiliate program.
Influencers: these types of affiliate partners will mostly be bloggers and social media influencers. They will be more likely to sign up for a network that has relevant product offers that will appeal to their follower base.
Hopefully, one of these affiliate types will stand out as the most natural fit for the type of network you are building. For instance, if your niche is food and drink, then bloggers and social media influencers would be the place to start. Whereas if you’re focusing on SaaS platforms for ecommerce, then you’re better networking with publishers and solo marketers that create B2B content.
Plan your marketing to attract the types of affiliates you need. Research your potential affiliates to make sure their audience and messaging fit with your network. In the long-term, you will eventually branch out to implement all types of affiliate partners. However, you should take this slowly and ensure you have a firm foothold in your starting niche before taking the next steps. At the end of the day, you want your network to have the broadest reach possible without losing effectiveness.
Give attractive opportunities
In 2020, Anil Agarwal earned over $200,000 from affiliate marketing of one product! These types of stories can inspire new waves of potential affiliates. However, not every affiliate marketer is looking to make it big and retire early with a substantial passive income.
The affiliate millionaire success story is increasingly becoming a pipe dream. Research has shown that nearly half of all affiliates don’t even earn the median US income. But side hustle or not, you will need to offer potential partners good value when it comes to incentives and rewards. Offer a competitive commission structure for the respective industries and products you sell.
For example, the Amazon Affiliate program offers commission rates based on the product category. Luxury Beauty items command a 10% commission while Video Games and groceries only yield 1% commission for affiliates. You can expect physical products and subscription services to pay significantly different commission rates.
Finding the optimal rates is a balancing act. Offering a higher commission may entice more affiliates, but also produce diminishing returns for your business and your advertising partners. You will need to find a performance-based pay structure that helps you attract your target audience and still make a profit.
A partner marketing platform like Affise helps track and attribute performance. Your main options are:
Pay per click (PPC): a traditional and easy method but not as effective at maximizing ROI or dealing with click fraud. Despite its drawbacks, PPC can attract some types of affiliates rapidly.
Pay per lead (PPL): more complicated to implement than PPC. Great at attracting and retaining quality affiliates as they are paid based on conversions like visiting websites.
Pay per sale/action (PPA): the most popular method today. Affiliates are only paid based on transactions that they helped influence. This is the most cost-efficient way for a network to invest in affiliate marketing.
Set clear expectations
Your affiliates are an extension of your business. Effectively, they are the customer-facing area of your affiliate network. You owe it to your brand partners to make sure their messaging meets their target audience as intended.
As such, it is up to you and your team to set clear expectations for any affiliates that wish to join your network. This means having goals and targets for every member of your network, like staying on brand and producing quality content.
You will also need to guide your affiliates with product line updates and alterations to keep all offers up-to-date. Consider highlighting online learning – for instance, the knowledge base and helpful tutorials that come via the Affise Academy.
Be prepared to cut off any affiliates that violate your terms and conditions or in any way jeopardize the image of one of your brand partners. Brands don’t want to gain new customers but lose their reputation. You will be better off to keep your brand partners happy and cut ties with any affiliates that are suspect.
Starting an affiliate network takes the right combination of knowledge, experience, and determination. We never said it would be easy! But, if you make it to the end of the tunnel, you will be rewarded with a long-term revenue generator. It’s a win not just for your business, but all of your brand partners and affiliates.
Just make sure you are always looking for new partners and ways to improve your network. And by using an affiliate network solution like Affise, the rest will be easy!
Try Affise today! Submit for a free trial and check out all platform’s functionality by yourself!
Edgar is a Content Marketer obsessed with analytics & performance statistics. Edgar loves leveling up professionally and search for new effective ways to deliver quality content. After that, he’ll take every opportunity to take on exciting adventures with his GF.