With online advertising forecast to grow by 30% this year, the
affiliate marketing segment is expected to grow in line with
this estimate. Merchants are expected to either add affiliate
marketing to their existing online sales channels or upgrade
their platforms to expand their existing programmes even further.
A key part of running a successful affiliate program is being
able to manage your affiliates efficiently and cost-effectively.
Thankfully, there are software products to help you do this. The
trouble is, with dozens of different affiliate software suppliers
offering a wide range of features, functionality and pricing, how
do you choose the right one?
There are six main types of affiliate software, each with its
strengths and weaknesses. Once you choose and implement a
particular solution, it can be complicated and expensive to
switch. Be sure to do your research beforehand and choose a
program that meets your needs both now and for the future.
1. Stand-alone Software
You pay a one-time fee to own the software. You install it on
your web server where it integrates with your other systems, such
as your e-commerce and CRM components.
Pros: Typically has extensive features and functionality.
Ongoing fees are minimal and do not change with the size of your
affiliate program. Affiliate links show your domain address
because the software is hosted on your server. As more affiliates
create more inbound links to your site, it can have a positive
effect on your search engine rankings.
Cons: Requires installation, which you will need to pay for if
you cannot do it yourself. Having the software on your server may
require a bigger web hosting package, resulting in higher hosting
charges.
2. Hosted (ASP) Software
The software is provided as a service by a third party. They host
it on their server and you pay to access it.
Pros: Upgrades are typically included and are rolled out as
soon as they are available. Requires no technical skill as
installation and hosting is handled by the vendor. Upfront
costs are lower.
Cons: Ongoing monthly fees are usually based on volume of
transactions. As your affiliate program grows, your costs may
grow as well. Some vendors may not allow links that go first to
your domain - reducing the added benefit of inbound affiliate
links and search engine positioning.
3. Affiliate Networks
Again, the software is hosted and provided by a third party. You
also gain access to an established community of people who are
actively looking for affiliate opportunities.
Pros: No technical skill or maintenance required. Instant
access to a large pool of potential affiliates, which can help
build your program quickly. Usually the network handles the
administration of the entire program, including affiliate payouts
and reporting. You do nothing but upload your affiliate offers to
the network site.
Cons: The network takes a relatively high transaction fee on each
affiliate sale. Minimal options for customizing the program to
your specific needs.
4. MLM Software
Multi-level marketing (MLM) is often considered the "black
sheep" of the affiliate marketing concept. However, there is
significant overlap between MLM and affiliate marketing. MLM
talks about a "downline" whereas affiliate marketers refer to
their sub-affiliates. Same concept, different name. Since there
are software packages to manage an MLM business, you should not
overlook this possibility for running your affiliate program.
Pros: Excellent for managing an affiliate program with multiple
tiers.
Cons: There's a certain stigma attached to MLM. Potential
affiliates may be scared away if they discover you are using
MLM software.
5. Shopping Carts
Shopping cart software allows customers on an e-commerce site
to select items they wish to purchase and store them in their
virtual shopping basket, before paying for their purchase in one
electronic transaction. Many e-commerce shopping carts include
affiliate management features as either a standard or add-on
module.
Pros: E-commerce and affiliate management functions are
integrated into one program, making maintenance easier and less
expensive. The affiliate module is not typically based on volume
so fees remain the same as your program grows.
Cons: Affiliate management is not the vendor's primary focus so
the software may have less functionality than other software
options.
6. Web Site Builder Systems
These all-in-one packages usually bundle web site building tools,
web hosting, e-commerce and affiliate functionality.
Pros: Can help you launch a complete e-commerce site from scratch
very quickly. Little technical expertise required.
Cons: Paying for many different services as one lump sum means
you may be overpaying if you only want one or two pieces. Again,
affiliate management is not the vendor's primary focus so
functionality may be limited.
Whether it is the effectiveness of cookie tracking, the booming
popularity off RSS and datafeeds, or companies using the latest
tools in fraud and parasite detection, it's critical when
choosing an affiliate provider to work with a company that is
going to adjust to the market. The affiliate software solution
that works best for you will depend on your affiliate strategy
and requirements. Think about your needs, do your research, and
choose wisely.
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Peter Koning is the founder of www.Affiliate-Software-Review.com.
He has been active in the international IT, telecom, and Internet
industries for over 20 years.
Merchants can compare affiliate software products side-by-side,
see examples of products in the categories mentioned, and
instantly create free feature comparison charts by visiting
http://www.affiliate-software-review.com