The Pros and Cons of Affiliate Management Agencies

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In the world of affiliate marketing, there is often a clear difference between highly successful “super affiliates” and those who are just starting out. Like any industry, there is a learning curve for affiliates as they begin to better understand its best practices, usually through a process of trial and error.

After all, becoming an accomplished affiliate marketer requires a lot of time and maintenance, and unfortunately some upstarts just don’t have the resources to succeed. However, as always happens, a solution emerged in the form of affiliate managers.

Affiliate managers have a number of responsibilities, but are mainly tasked with running a merchant’s affiliate program, which includes everything from recruiting affiliates to establishing incentive programs, creating media, reporting on sales and paying the affiliates. By providing this type of assistance on behalf of the advertisers, affiliate managers streamline the process for marketers and maximize their opportunities by significantly cutting down on this trial and error process. This can be especially useful for up-and-coming affiliates.

As of late, with the influx of merchants looking to advertise on the Web and the constant changes that can take place in Web marketing, many advertisers don’t have the ability to offer their own affiliate manager and can place too much of a burden on the affiliate marketer to pick up the slack, and that typically doesn’t end well for anyone. Enter affiliate management agencies, third-party organizations that work with merchants to run affiliate programs and handle all of the responsibilities typically assigned to affiliate managers.

But, is it worth it for an affiliate marketer to use a management agency? Let’s look at the pros and cons:

Pros
For affiliate marketers, there are some good reasons for working with an affiliate management agency, the most obvious of which is the amount of time and resources that it saves. Because these agencies have pre-established connections with various merchants and advertisers of varying sizes and from various industries, it’s much easier for a marketer to find a partner and get started working with them. Plus, because they have experience with both merchants and marketers, agencies will be able to help direct an affiliate to those advertisers with whom they will likely have the most success.

Since these agencies are, themselves, pretty easy for affiliates to find, and since they’re always looking to expand their base of affiliate partners, it really cuts out a lot of the initial work for marketers (especially new ones) with regards to establishing contacts and getting started with a program, which can often be the hardest part of the process. Agencies help by ensuring that any requirements placed on both merchants and marketers are sorted out beforehand.

Moreover, these agencies are useful because managing affiliate marketing programs is all they do. When advertisers do have affiliate managers on their payroll, they’re often in charge of managing all of the affiliate partnerships that the company handles, in addition to other responsibilities. This means that even a small team of people can have trouble managing all of these programs, depending on their size.

Agencies are entirely dedicated to getting the most out of every account and have multiple people involved with that single goal in mind. They will also be more flexible in terms of providing an affiliate support when it’s needed, as in-house managers tend to work a regular, fixed schedule. Agencies, on the other hand, can have people on-call at all hours of the day to provide assistance as a problem presents itself.

Cons
The biggest issue with affiliate management agencies is that they’re just that, agencies. This means they run like well-oiled machines, which is obviously good for efficiency and suitable for most situations, but also means they lack a personal element. Most operations are very routine with an agency and they often lack in the ability to customize a program. Furthermore, in-house affiliate marketers should be more familiar and interested in their particular industry, as opposed to agencies that dabble in a wide variety of industries, and can thus be more helpful and supportive when an affiliate has specific questions about the field.

The other obvious downside to using a third-party affiliate management agency is the cost. These companies either charge a nominal fee or take a performance percentage of an affiliate’s earnings; and either way, it costs noticeably more than partnering with a merchant who has an in-house affiliate manager.

As an affiliate, the choice to decide whether or not to use a management agency to find your program is yours. There are obviously many advantages, namely that these agencies can partner you with a suitable program and you have the assurance of knowing that it is being managed by professionals dedicated to that one task. On the other hand, you’ll largely be sacrificing the personal connection between you and the merchant.

 

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3 comments

Evan W. 03-28-2012 3:09 PM

Nice post. We provide that service and do it well!

BarbaraS 10-24-2012 6:01 AM

Thank you that was a really useful concise overview. I would like to promote this post. I also have just joined up for your free eMag. I look forward to being further enlightened and kept up to speed with not too much fluff. Time is limited and I seem to have the attention span of a gnat lately.

BMT 05-09-2013 10:35 AM

I agree with most of your article. However, I would say that most affiliate agencies now charge a reasonable price that is oftentimes quite a bit lower than what it would cost to hire an experienced in-house affiliate manager.

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