Online Advertising: Affiliate Networks

Posted by Bart on June 9, 2011

The first Affiliate Programs have been created and managed solely by Advertisers. Amazon was one of the first companies to conceive and promote an Affiliate Program at a large scale. At this time, everything happened between the Advertiser and its Affiliates: The Advertiser was implementing a program and promoting it. The website owners were subscribing to it and running it on their website.

But this was not always a smooth process.

- Some Advertisers had not tracking tool to effectively track the Affiliates performances,

- Advertisers had more and more Affiliates to manage and to take care of, and for some of them in many different countries,

- With more and more Advertisers and Programs, Affiliates got confused. They needed a third party to make sure that Advertisers were reliable and that numbers were correct.

That’s why Affiliate Network have appeared and quickly became very popular.

An Affiliate Network is a website that gathers and put together Advertisers (and their Affiliate Programs) and Publishers (Web sites with advertising placements). The Network promote its Advertisers programs, recruit new Publishers, and is responsible for Tracking, Accounting and Billing.

How does that work?

On the Advertiser’s side

An Advertiser agree with the Network on the campaign parameters: Together they define what is a lead for this campaign, how much they are willing to pay, what graphical elements they will provide, etc.

Then the Advertiser will receive a login and a password to connect to the admin part of the Network.

He will then be able to organize and manage the program by himself, to modify prices, to upload graphical elements, to validate or not validate the Affiliates, to create reports, etc.

The Advertiser follow up with the campaign, motivate the Affiliates, organize promotional activities and Affiliates contests, check the spending, etc.

On the Publisher’s side

The Publisher has to register to the Network and to mention what website(s) he will use to promote the campaigns. If the Network’s administrator validates the Publisher’s account, then the Publisher will receive a login and a password.

Once connected, the Publisher is able to access all the campaigns available on the Network and to check their description, pay out, graphical elements, etc.

However to promote a campaign, a Publisher has first to apply and to be accepted by the Advertiser. This is a double validation system for the Publisher (once by the Network, once by the Advertiser).

Once accepted for a program, the Publisher becomes an Affiliate. He is then able to chose the graphical elements he wants to use (banners, email templates, etc.) and to get a dedicated tracking link that will allow the Network to track the Affiliate activity on this particular program.

The Publisher is also able to generate reports, per campaign, per day, per banner, etc. and to check the campaign performance and the revenue generated.

On the Network’s side

The Network’s Administrator manage the Advertisers, the Publishers, the Programs, the Reports, the Commissions, the Payments, etc. He will also validate new Publishers, provide Technical Support, confirm numbers and commissions, get paid by its Advertisers and pay its Publishers.

A Network has to promote its services to get always more Advertisers and always more Publishers. The more Advertisers it gets, the more attractive it is for the Publishers. And the more Publishers it gets, the more effective it is for its Advertisers.

Usually, a Network takes 30% commission on the pay out agreed with the Advertiser. If the Advertiser agrees to pay 1 Euro per Lead to the Publishers, he will actually give 1,30 Euros to the Network. The Network will keep 0.30 Euros and give 1 Euro to the Publisher. Some Networks also charge additional fees for Program set up (one time fee) and Program management (monthly fee). This is usually negotiable.

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Large international Affiliate Network include Commission Junction, Click Bank, Link Share, Affiliate Window, Zanox, TradeDouble, Affilinet, Amazon, and… Google of course!

But there are thousands of others!

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