External or Internal affiliate network?

External or Internal affiliate network?

A question we often receive is: Is it better to use an external or internal affiliate network for my business? The answer to that question can be different for each company as it depends on many factors, one of them is your marketing strategy. We will review the differences and pros and cons of an external and internal affiliate network in this blog to ensure you will be able to make the right decision for your company.

  1. What is an affiliate network?
  2. Differences between external or internal affiliate network
  3. Pros and Cons
  4. Have an internal affiliate network but need advice?
  5. Best approach for my company?

What is an affiliate network

You have probably already heard the term “affiliate network” if you are looking into or are working with affiliate marketing. In short, an affiliate network is the collection of all parties and individuals involved in your affiliate marketing strategy. This basically means that your company with all affiliates forms the affiliate network.

Differences between external or internal affiliate network

It can be a challenging process for small companies and start-ups in the initial phase to get started with affiliate marketing. Where do you find affiliates who want to promote your product or service to a target audience with high potential for conversion? How do you engage with affiliates if you think they are perfect for partnering with your company? How can you perform all those activities besides your current activities and responsibilities that also require time and focus?

An external affiliate network is a company that connects advertisers (companies) and publishers (affiliates). Once registered, you can easily get in touch with affiliates within your product group (for example, clothing) via their platform. Affiliates in the same industry on the other hand can also approach your company directly with the request for promotion. This allows you to start new affiliate collaborations relatively easily. Well-known external affiliate networks are Awin, Daisycon, Tradetracker and more.

There on the other hand are many companies that promote an affiliate or ambassador program themselves. You can in most cases sign up for their affiliate program via the website, examples are the coolblue and Amazon affiliate programs. Some companies review your registration to determine based on your profile whether they want to discuss a potential collaboration. In this way, companies are proactively engaged and focussed in the growth and development of an internal affiliate network. The affiliate network is managed and developed by the company itself without the need for an external company. It is relatively easy for large companies to expand their affiliate network as they in general have a high brand awareness. An internal affiliate network however is also very interesting and powerful for small companies or start-ups.

Pros and cons

Now that the differences are clear, the question still remains what the advantages and disadvantages of an external or internal affiliate network are. Broadly speaking, you see that an external affiliate network is often used by small businesses where there is little to no experience with affiliate marketing. Working with a third party with experience and connections can certainly help. However, large companies regularly choose to set up an internal affiliate network because a dedicated team is often set up for this with more experience and with long-term focus. Below is a brief overview of some pros and cons:

Pros

External Affiliate Network Internal Affiliate Network
Easy to get in contact with new affiliates Unlimited reach for new affiliates
Receive offers from affiliates No additional cost
Personal collaboration with affiliates

Cons

External Affiliate Network Internal Affiliate Network
Additional cost for the use of the platform More challenging to find new affiliates
In some cases additional cost per sale Startphase may require some time
Limited to affiliates who are connected to the external network

Why an internal affiliate network is worth it

Affiliate Marketing is a form of marketing that requires time and energy, the generated sales will not increase by 200% within the first 2 weeks. This form of marketing however is a very strong and stable method to generate more brand awareness and turnover as long as you focus and stay consistent for a longer period. If you ask us, our preference will in most cases be to set up an internal affiliate network, this is due to a number of things. signing up with an external affiliate network for example only grants you access to the affiliates that are connected to their platform. It is therefore possible that potential affiliates will be missed because they happen to be connected with another external affiliate network. Do you want to get in touch with all external affiliate networks? Then you will need to register to various parties which results in additional costs and time to manage this.

Be unique

As a company you are always looking for a way to distinguish yourself from your competitors. This can be done through a unique customer experience, sublime support or other matters. The way you set up your affiliate marketing strategy may also play an important role in this. Is your competitor for example connected with an external affiliate network? Then there is a good chance that many affiliates in your industry already have collaborations running. You can get in contact with the external affiliate networks to check if such information is available to share. Setting up an internal affiliate network in that sense already makes your affiliate marketing strategy somewhat unique. An affiliate that works independently and is not connected with an external network can be of great value. It is important to seek personal contact with unique and valuable affiliates when setting up an internal affiliate network.

Have an internal affiliate network but need advice?

Do you want to set up an internal affiliate network but do you lack the experience and knowledge to get started? Starting with an internal affiliate network can be very valuable If affiliate marketing is part of your long-term strategy. The additional energy which is required in the initial period to get started will certainly come back to you in the long run. You may however despite your clear affiliate marketing strategy struggle to understand how and where to start. There in that case are various companies that support in finding and maintaining collaborations with influencers or affiliates. This service does of course (and unfortunately) comes with a price, a fixed value is often charged for each confirmed collaboration. These costs are temporary as it only includes the service to build your own network. You can stop the external service any time you want if for example you feel you have a stable and successful affiliate network.

Best approach for my company?

The type of network that best suits your company depends on many factors and is therefore difficult to indicate. We can, however, advise what is probably the best match based on a number of examples.

Have you been trying to set up your own affiliate network for a longer period of time, but so far without real success? A consultancy or the use of an external affiliate network may be a good choice. The external affiliate network allows you to easily get in touch with affiliates who are interested in doing promotions for companies.

Are you a start-up and is affiliate marketing an important part of your marketing strategy? Then setting up an internal affiliate network is the right choice, the large reach of affiliates worldwide provides a lot of room for cool and valuable collaborations.

Do you want to apply affiliate marketing but do you have no to limited time to start? An internal affiliate network would provide the most value in the long run. However, due to the limited capacity, it may be wise to start with an external affiliate network. You can focus on creating more capacity to set up an internal affiliate network once the first positive results come in, thereby confirming the power of affiliate marketing.