The Network and their Role

Hi There,

I hope my first post was clear and gave you a brief and simple insight into Affiliate marketing, in this post I would like to introduce the Network into the model and give an overview of their role.

Most Affiliate Networks will follow a similar model however, please note this may vary slightly from network to network.

Affiliate networks sit in the middle of the Advertiser and the Affiliates. Thousands of affiliates will join to any one network and therefore a network can give access to an Advertiser to this base of websites that are willing to work on a cost per acquisition model.

Please note, here dgm are the affiliate network.

In addition as a basic Affiliate network, they will provide;

(1) Technology for both affiliates and advertisers; networks will host the banners on their servers and will track impressions and clicks served by the affiliate and the action on the advertiser’s website along with the commission.

Dependent on the network this may be their own proprietary software or it may be outsourced from another company.

(2) Reporting Tools for both the Advertiser and the Affiliate to monitor and analyse their performance.

(3) Affiliate Payments, networks will tend to only send one invoice to the client however manage the multiple payments out to the affiliates on the client’s behalf.

More premium networks will also offer a full account management service to the Advertiser and the Affiliates on the network which may have additional fees attached to them. Account managers at these networks should be able to guide and advise both Affiliates and Advertisers on how to grow and optimize their campaign.


The Networks Basic Tracking Solution


Most affiliate networks will engage in cookie tracking however many may also have alternative tracking solutions in place or use other solutions in conjunction with cookie tracking.

As mentioned above the affiliate network will host the banners / creative on their servers and can be picked up by an affiliate to place on their website.

The Advertiser would also be required to place a small piece of code (a sales tag) on the confirmation page or on the last page of the action so that the affiliate network can track the acquisitions.

When a user clicks on the banners / creative on the affiliates site, the user is redirected via the affiliate network server and then to the Advertiser within a flash of a second making them completely unaware.

At this point the affiliate network will drop a cookie on the user’s computer. In addition they will also capture information about the click, i.e. the affiliate referrer, time and date, which is stored on the networks database.

When the user completes the desired action, in this case a sale, the networks sales tag will check for the networks cookie and then send the information back to the network server. If the network’s cookie is not present on the user’s computer or the cookie has expired then the connection to the network’s server is dropped.

On receiving the sales tag information from the Advertiser, the network will then marry up the information with the original click data that they captured to produce a full detailed summary of the sale that occurred.

e.g. At a basic level the Affiliate Referrer, Click Time and Date, Sales Time and Date, Affiliate Commission PLUS any other additional information that the affiliate network is able to capture.

In-House Advertiser Campaigns Versus Networks

Many advertisers choose to run in house campaigns by either using their own tracking system or using a third party provider. There are advantages and dis-advantages for both the affiliate and the advertiser by omitting the network out of the model. However, should the client not have a dedicated affiliate management team and robust technology to track sales and pay the affiliates, it is much easier to use a network to facilitate the relationships between the advertiser and their affiliates.

In addition by working with a network, Advertisers are able to increase their reach to a much larger audience of affiliates as they will be signed up to promote multiple programs on the network. Affiliates can manage multiple campaigns, reporting and have one dedicated affiliate manager at a network then having to manage multiple interfaces and managers.

I realise that this post may have quite a few industry jargon words in it and as my aim is to make it readable for everyone whether new to online or an Industry expert I will post up some definitions and typical industry terminology that is used.

Until Next Time,

Take Care

Sheenu

About dgmAffiliates

dgmAffiliates is a premium network that offers both a full account managed service as well as a self serve option. Our technology dgmPro is our own proprietary software, where we have releases once every two weeks to benefit either the Affiliate / Advertiser or the Account Managers and dgm. We have a wide range of reporting tools available to monitor and analyse your preformance, whether you are an Affiliate or an Advertiser. In addition, we provide Affiliates with toolkits in our interface to help them optimise and maximise their performance with the campaigns on our network. If you would like more information on our network please visit http://www.dgmaffiliatesasia.com/
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Introduction into Affiliate Marketing

So this is my virgin post and therefore thought the best way to start this was to give an overview of affiliate marketing and what it is.

Starting with the very basics, here are the definitions;

Affiliate Marketing also known as CPA advertising

Affiliate marketing is an online advertising channel in which advertisers pay affiliates to fulfill a “Desired Action”.

This model is today's online version of the “reseller/commission model", where affiliates who introduce new clients / consumers to a business are compensated, as a result of a sale or a lead, making it a low-risk, high-reward environment for both parties.


What is an Affiliate?

“A website owner that has a business relationship or agreement with an online business.

An affiliate provides advertising and hosts links on their website directing traffic to the merchant in exchange for a commission of a pre-defined action.”

In my diagram below you can see the relationship and how this works in the most simplistic form, where we assume the affiliate is commissioned on driving sales.

How it works?

1. Affiliate places banners / creative or a text link on their website
2. Customers are directed to the Advertiser website when they click on the link
3. If the desired action is fulfiled e.g. A Sale, then the Advertiser rewards the Affiliate a commission for referring the customer.


The Online Marketing Mix

The affiliate channel is just another route to deliver traffic and more importantly customer acquistion to an Advertiser's site.

Looking at the three main channels we have

(1) Display Media - typically bought on a cost per thousands impressions and used by Advertisers for branding.

(2) PPC - typically brought on a cost per click basis and used to drive traffic to your site through the search engines or the content networks.

(3) Affiliate Channel - typically operates on a cost per action basis and used to drive customer acquistion.

As the affiliate channels operates on a pure CPA model, it is one the most cost effective routes online to deliver acquistion to your site.

The affiliate channel provides advertisers with low risk advertising as they only ever pay when the desired action has occured. There is no spend on the number of clicks delivered to your site or the number of impressions that are served on a website.

The affiliate channel is entirely performance based, your affiliates are only paid when they fulfil your desired action. Therefore in order for affiliates to increase the amount of commission that they earn they need to continure delivering acquisitions to the Advertiser's site.

Advertisers define their desired action, dependent on the goal and objective of the advertiser, the channel can be tailored to deliver a particular acquistion. This ranges from delivering online sales for retail clients, hotel reservations, flight bookings, subscriptions, e-mail registrations, application forms, surveys, leads etc to name just a few.

Advertisers are able to expand their reach online, tens to hundreds of affiliates (website owners) can place banners / text links on their site driving traffic to your site in order to deliver customer acquistion which in return they will be rewarded for.

Hopefully, this gives you a basic oversight into the affiliate channel and how it works for advertisers who are looking for another route to market and target their online customers. I will continue to share more insight into the affiliate channel and how it works and in my next post add in the network and where they fit into the model.

If you have any specific topics or questions you would like me to answer or write about please e-mail me sheenuaggarwal@hotmail.com and I will try my best to answer them.

Stayed Tuned,

Sheenu