If change really is the law of life, affiliate marketing is certainly having to face up to its wide-ranging implications.
Once an industry dominated by networks who connected brands with their highest drivers of web traffic, new advances in affordable campaign management solutions are creating a monumental shift in power across its parameters, enabling advertisers to manage their programmes in-house and take charge of their own affiliate destiny.
Turn the clock back to 2010 and this idea would have struggled to scrape into a blog covering the most far-fetched trends in web affiliation. Networks have traditionally held a technical edge on the brands and publishers they serve, being the first port of call for ad tracking solutions and using their near-on total management of campaigns as a boast for the service on offer.
Fast-forward to present day and it is somewhat apt that the catalyst for this change is accessible technology for gathering and managing vast quantities of data as well as an increased demand for being able to control and make decisions on the information presented. Easy-to-use, no-strings-attached platforms for keeping tabs on performance are helping brands analyse the customer journey in forensic detail, which in turn has triggered the rise of the in-house operation.
This, when attempting to ascertain what the future may look like for affiliate marketing, is a trend more than worth paying attention to.
Data and the ability to act on customer behaviour has long been the driving force behind performance marketing, so when the presentation and management of this information was delivered in a more accessible format, networks would have been prepared to see a select group of their clients venturing down the in-house route.
Networks do of course offer benefits besides data tracking. There’s the instant connection to publishers, accountancy services and business development opportunities to consider. Though for the larger enterprises, such services may already be a part of their operation, and the decision of whether to go in-house may well boil down to who should control their data.
Toni Jarimo, Microsoft’s head of marketing analytics, has seen first-hand evidence of companies wanting to learn more about their customers and how they arrive at their online door. PerformanceIN spoke to Toni after his talk at Teradata: Connect 2014, where delegates flocked to gain insights about data-driven marketing.
“I think that people are warming up to the idea of performance marketing, and there are more and more people capable of joining in, which is good,” he commented.
“Everyone I’ve talked to about the capability of measuring even offline media has been willing to develop a deeper understanding of how to gain results.
“At the same time, there is more and more demand for support from data in decision-making, so selling the idea [performance marketing] is not the main barrier at the moment.”
This demand is subsequently boosting the profile of software that allows advertisers to take their affiliate activity in-house, with no network involved.
One provider of such solutions is Ingenious Technologies, who offers campaign tracking solutions for companies who wish to gain total control of their data. Needless to say Ingenious CEO Christian Kleinsorge is all for the rise in companies going in-house.
“People who have a pure online business model know that it is strategic to have their online marketing managed by their own people. Most of them have knowledge in technology, but what they don’t have is the ability to develop monitoring systems in certain areas.
“That’s exactly the client group we focus on and have been successful with.”
Kleinsorge highlights that one of the main appeals of companies like Ingenious is their ability to disappear from the main picture, allowing companies to action improvements and examine data on their own accord.
“Companies demand this independence because gaining it is very important. If you have partners in between who want to survive from buying media and selling media, you don’t get an independent view of your activity - you always have an extra interest. “
New campaign management solutions also offer maximum protection against fraud, constantly checking for irregularities in performance and alerting the business if something appears untoward. Meanwhile there is always the luxury of taking the money that would have been spent on network fees and investing it back into the campaign.
“In-house is not strictly about making savings - it is about improving. Plus, money that you don’t spend you can use to generate more business, taking additional resources to make your service better for your clients,” adds Kleinsorge.
Still, the debate doesn’t end there, and there are myriad factors to consider when contemplating whether to pursue an interest in the in-house model.
In-house also offers the chance for advertisers and publishers some of the most direct relationships in the affiliate space.
Mark Walters, managing director at global performance network Affiliate Window, actually used a recent panel slot at Performance Marketing Insights: Europe to stress that brands can work closely with their traffic-drivers under the umbrella of a network. Yet it would be naive to think that advertisers and publishers aren’t attracted to the opportunity of conducting business one-to-one.
Speaking on the same panel, another network representative in Florian Gramshammer - country manager of Commission Junction - even admitted that affiliate programmes are best ran through the in-house approach. He added that some of the healthiest affiliate relationships are with advertisers who know exactly what they want out of their partners.
Networks appear to be doing a very good job of creating this initial contact and enabling brands to start new business partnerships. As for building on these relationships, there is certainly an argument that day-to-day communications between parties may be far more productive without the middleman.
So, why aren’t all companies choosing to keep their affiliate operation behind closed doors?
More work, less play?
As any amatuer handyman will testify, the problem with deciding to ‘do-it-yourself’ is evident in the title. In-house operations require the setting up of campaign tracking tools, the installation of tracking codes, affiliate recruitment, programme promotion, accounting procedures and - for some - the time, resources and even patience just isn’t there.
Networks are continuing to offer brands a way into the highly beneficial world of affiliation with minimum hassle. It is for this reason and more why so many website owners start off under the wing of an enterprise that knows how things are done, as Kleinsorge explains.
“We’re not saying there is no need for networks, but brands need to have technology that can give them a transparent, neutral, independent view of all activities across all partnerships and, of course, the networks. "
The question is when, if ever, should advertisers and publishers choose to branch out?
Alongside their early progress in affiliation and network relationships, this pivotal decision must take into account the scale of the desired operation, the available personnel, any preferences for communication as well as a need to connect with specific brands and publishers. Are there any systems in place to prevent fraud? Does the business know enough about affiliation in the first place? The list goes on.
Only the company can decide whether their affiliate operations are best kept in-house, but the fact this scenario has progressed to a discussable nature is testament to the industry’s fine health.
If a publisher or network is looking to gain better control of their affiliate programme then it must be with a view to making improvements. And if that isn’t a sign of dedication to the cause, nothing is.