2017-03-29T17:06:53+00:00 August 14th, 2014/Affiliate Networks and Offers/By /

Affiliate Networks and Offers: Affiliate Networks vs Going Direct: Which Is Better?

When you’re starting off in the industry, you should sign up for and run through a few affiliate networks first. It’s convenient, and you’re at the stage where affiliate managers can be very helpful.

But as you mature in the industry, a time will come when you’ll have to start dealing with your advertisers directly, bypassing your affiliate network.

Let’s look at the following example. Who has an advantage in this situation?

  • Affiliate A is running an offer and getting paid $6.50
  • Affiliate B is running an offer and getting paid $5.00

Most people will say affiliate A because she gets paid more per lead. But what if she ends up not getting paid at all from the advertiser? She loses over 5 figures. Affiliate B gets paid because the affiliate network ate up the costs. Now it’s affiliate B who won.

As you can see, it’s not as clear as black and white when it comes to deciding whether to be with an affiliate network or to deal with advertisers directly. Each option has its own distinct advantages, and a good affiliate is able to tell which is better for each situation.

In this post, I’m going to explain the benefits of each and give you some advice on how to go direct.

Direct vs Network

Payouts

Payout is the main advantage of going direct.

Since you’re bypassing the affiliate network, you get its cut. Sometimes, it can be significant (someone has to pay for those fancy offices and affiliate trips).

A few years ago, I was running a dating offer at a network, and the most I could get paid from any network was $5.50. By going direct with the advertiser, I increased my payout to $6.50.

Here is another example. I ran a supplement on a network, which paid me $52.00 maximum. By switching to the advertiser directly, I started getting $60.00 per sale.

What happens when you have a 25% margin advantage over your competition?

  • You can outbid them for more volume
  • You can scale to other traffic sources that they can’t

There’s also one more pay bump no one ever mentions: click loss.

The click you buy from the traffic source goes through many redirects. A typical funnel looks like this:

Traffic Source -> Tracking software -> Affiliate pre-sell page -> Affiliate network offer link -> Advertiser’s landing page.

That’s a lot of redirects, and you will always lose clicks along the way.

By removing the affiliate network, you could potentially see 5-10% more clicks. 

Another consideration is scrubbing/shaving.

Some affiliate networks scrub/shave leads (aka stealing from you).

Here’s a common example

Newbie John threatens to stop promoting the offer if he doesn’t get a pay bump on his $5.00. Affiliate Network X can’t give him a pay bump because their margins are thin on this offer. How can they make Newbie John happy if they can’t give him a pay bump?

They bump Newbie John to $5.50, but they use their software to scrub/shave leads from him. If he sends 100 leads tomorrow, the network might keep 10 of those leads, and John only sees credit for 90.

That’s why it’s important to always split-test affiliate networks, even on the same offer. To learn more, read my article on split-testing affiliate networks.

Getting Paid

Some advertisers are slow when it comes to payments.

Maybe they have a policy of paying only once a month or every 2 weeks. That’s where affiliate networks come in and act like a bank. They take the risk, float you the money, and pay you every week. Faster cash flow is always good!

When you run with an advertiser, you have a higher risk of not getting paid. Let’s say their merchant processor goes down, and they decide not to pay. What are YOU going to do about it? You can’t do much. You’re a single affiliate without any power. Good luck suing a corporation located in a weird offshore country.

That’s where an affiliate network comes in. Even if the affiliate network doesn’t get paid, they will pay the affiliate out of their own pockets (if the leads are legit, of course). Nothing can sink an affiliate network faster than rumors that they’re not paying their affiliates.

Affiliate networks can put pressure on advertisers because they send a lot of traffic and they have lawyers, stronger relationships, and  access to Russian hitmen.

Advertisers have various risk levels. Be smart, and do your research. I find that going direct with dating advertisers who are backed by large companies is very safe. But if you’re doing nutraceutical trials, then you are assuming a significantly higher risk.

Make sure to use common sense. If someone ever misses a payment, stop traffic immediately. Don’t keep sending traffic for the next month, hoping that you’re going to get paid. You’re just increasing the amount of money you could potentially lose.

One last benefit to using advertisers is you can get more cap space. If an offer is good, there’s a chance the advertiser can only accept so much volume. If they have 500 leads a day in total, the advertiser has to be strategic about to whom they allocate the cap. They might want to give most of it to affiliates with whom they work directly because they have a direct line of communication with them.

Privacy

Let’s say you take a risk on a new offer, and you’re destroying it. If you have a good affiliate manager, he or she is not going to tell everyone to run whatever you’re running. They value your business and relationship.

But what about the other affiliate managers on the network who can see what the top offers are? They’re going to tell their affiliates what you’re running, and maybe even share your landing page. There’s no honor when you work on commission.

I hate to say this, but sometimes affiliate managers go rogue. It means after work, they go home to run their own campaigns, using data and resources of the existing ones. Why reinvent the wheel, when you know x offer works and you have a working landing page?

Some networks also have internal media buying teams. These guys can be tough to compete against because they have higher margins to work with and they can see some of your data. But let’s keep it real. If they were that good, they would be running campaigns on their own.

I run a large majority of my campaigns direct because I value my privacy. In general, advertisers are much, much better at keeping your privacy.

I’m not saying all affiliate networks are shady, but take some time to educate yourself about the networks. Keep your guard up, and never reveal more information than necessary about your campaigns.

Exclusivity

I don’t like to compete against other affiliates. I’m fighting for the same cap, and sometimes it feels like a race to the bottom. Being a super affiliate is about having an edge and having competitive advantages.

I spend a lot of time building strong relationships with proven advertisers. They stop seeing me as just another affiliate, and they start seeing me as a business partner.

Some of my best offers ever weren’t on networks. I worked with my advertiser to create exclusives just for me. It could be as simple as an exclusive landing page that I created/optimized. Or it could be a completely new vertical that I helped design from the bottom up.

If I have the exclusive, I don’t have to worry about other affiliates taking my cap space or stealing my pre-sell pages.

If you’re stuck at the intermediate stages, then re-read this section.

Information

It’s always tough communicating with the other party when there’s a middleman involved. You can ask for a quality check, and it’ll take days before you get a report.

That’s another reason why I like going direct. I get real information and much better communication.

There was one vertical last year where I was breaking even. No matter how many split-tests I did, I could not make it profitable.

Then the advertiser took a look a my funnel and gave me a few suggestions to optimize it. They had 5 years in this vertical compared to my 5 days and could identify the following problems and solutions:

  • The offer had absurdly low conversion rates in certain states. I stopped sending traffic to those states and saw an immediate ROI increase.
  • I got detailed demographic information on their customers.
  • Apparently, my translations were not that great even though I was using onehourtranslation. They had their guy translate it properly.
  • They provided me with detailed reports on the higher converting times/days of the week. I used this information to day-part my campaigns.

The campaign went from breaking even to 75% ROI because of their help. Once I researched and understood the vertical more, I was able to optimize it to over 150% ROI. If it wasn’t for them, I would have given up the campaign and the potential profit.

Affiliate managers can be a great source of information when you’re starting out, but the quality of them can differ drastically. It can be tough for a beginner to get help from a good affiliate manager, since they rather spend their time on proven affiliates.

Ways to Go Direct with the Advertiser

There are two main ways you can go direct with an advertiser.

Google

Google the offer to see who owns it. For some verticals, such as dating, it’s really easy. Just look at the bottom of the page for a link for affiliates.

If there isn’t one, you have to do some more work. Find the contact form, and send an email. See if there’s a phone number, and call.

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Ask Other People

This is where the power of networking comes in.

If I can’t find out who owns the offer, I ask the experts. If I need to go direct on a certain dating offer, I know that Ben at PlentyofFish has the connection (he has to help me because we’re Asian brothers).

If I want to go direct on a mobile offer, I get in touch with business developers – and I know plenty of them – who have the right connections. They help me because I’m going to get to the right person sooner or later, so it makes sense for them to provide value to me and strengthen our relationship.

I also have good connections with other affiliates. Some of you might be wondering: why would affiliates help each other out? Aren’t we competition?

Not really. I’ve discovered that I always make more money by helping others and providing value. What you’ll find as a super affiliate is that the competition isn’t you vs other affiliates. The real competition is against yourself, trying to outperform yourself, and against the traffic source (Google, Facebook guys).

Another way to meet more advertisers is by going to conferences. I was just at Affiliate Summit East, and I met more advertisers than I can handle. Go to parties, hang out with social connectors who can introduce you, and take the initiative to walk around, meeting people.

Conclusion

As you can see, there are different pros and cons to going direct with an advertiser.

This post is NOT meant to bash affiliate networks, but rather to educate my readers.

There are many affiliate networks out there, and most of them aren’t special. They are running Cake and brokering the same offers everyone else is. I’ve been hearing the same “highest payouts, exclusive offers” pitch forever, and it’s not a competitive advantage if everyone says it.

Start thinking higher on competitive strategy. How can your network offer value to affiliates? If I could go direct on your offers, and 10 different other networks are offering the same offer to me, why would I run with your network? It’s time for networks to evolve.

P.S. Here are some affiliate networks that I will personally vouch for. Sign up and run with these guys if you want to make more money.