Direct Vs Network Offers (10)
What are the pro’s & con’s of choosing to promote a CPA offer with an Affiliate Network and/or direct with an Advertiser?
Lets start with the basics.. Affiliate Networks are companies usually with a large database of affiliate offers that typically have a thorough vetting before being allowed to advertise on the network.
The good things about promoting an offer from an affiliate network is the reassurance as the offers are quite established and in business for the long run. You usually get an experienced affiliate manager that can advise you on the best campaigns to push with your traffic types and general help if you get stuck along the way. A good affiliate manager is 99% why I choose to stay with a network or look for a new one, even if a network has a really nice offer and i’m making good money if the network manager is a dick I will switch. Affiliate managers usually know their shit! If you dive into an offer that you have never promoted you can always ask for help because they have years of experience in multiple verticals. Networks also tend to be very good at finding the best converting CPA offers for you to promote which saves you the hassle and time trying to source them yourself!
With a direct affiliate offer you run a few risks… Unless you know the offer owner or have an established friendship with them you could find yourself in some sticky situations, I have heard of many affiliates been left with empty pockets or sticky situations after the direct advertisers have been unable to pay commissions, shut down with merchant issues, exceeded their cap limit amongst other things that can go wrong. However this doesn’t apply to all direct cpa offers, I have promoted and still do promote some successful offers directly. Networks will pay regardless, if an offer closes and you have outstanding commissions the network will pay you (if your joins are legit) because they don’t want the word going around that their network isn’t paying.
When dealing direct you can negotiate a higher commission or payout as there is no middle man, affiliate networks take a small commission from every affiliate sale so generally the commissions are a little lower. Another good thing with the direct advertisers is that you usually aren’t competing with 100+ other affiliates for cap, pushing the same offer and being nagged by the network manager to ”pull the finger out” I find that most network offers are saturated all over the net because so many affiliates are pushing the same thing. With a direct offer you are competing with a smaller group of affiliates meaning less chance of your campaign being displayed to the same person that another affiliate reached 2 days ago. You can really stand out with a direct offer too, if you have idea’s or come up with your own landing designs and creative strategies you will soon stand out and they will reward you.
Two other things to keep in mind is ”Lead Scrubbing” and ”click loss”
Scrubbing very rarely happens nowadays but every so often you do catch the culprits by split testing the same offers with different networks. ”scrubbing” is basically theft… When an affiliate ask’s a network for a rise in commissions or says they will leave, the networks keeps them happy by putting their commission up slightly but let’s say that affiliate sends 70 joins, the network will scrub 5 of those so the affiliate only see’s 65, this way they keep the affiliate happy but in reality the network is making up for the commission bump.
Click loss is inevitable when working with a network, a traffic funnel looks something like this:
Traffic source >Tracking >Affiliate Sales Page >Network Offer Link >Offer Landing Page
With these re-directs you are bound to loose a few clicks but that’s just something you have to deal with promoting network offers unless you take out your pre-sell, but then you run the risk of loosing conversions.
All in all it’s six of one and half a dozen of the other, i’m sure you’ll find what works for you!
Great post! I
My favorite thing about networks is the ability to test dozens of separate offers from different affiliate programs all together under 1 roof and receive 1 payment. Also helps when it comes to hitting the minimum balance for payment. If you go direct, do a small test and realize it's not working you may be left without a high enough balance for payout. For example if you earned $20 on 10 different programs. If you did the test under a network you'd have the full $200 balance together.
Also a lot of times you can get better deals with networks than going direct. For example AdultFriendFinder starts affiliates at $55 PPS and you have to climb a tier for higher payout. RevolutionForce.com on the other hand pays $85 right from the start. If you're a small affiliate that went direct you'd earn less.
I'm all about testing on networks first and once I find something works THEN I check if going direct will earn me more. Sometimes it will sometimes it won't. But I always prefer testing first on a network.
Thanks a lot for the post, I think you mentioned pretty much everything important. 
It really depends on the industry. If the average payout per user is low and there are many offers, of course it makes sense to join a network. In some niches, you are much better off working directly with the brands who can offer you some exclusive offers - but sometimes you have to negotiate with them...
Also in addition to click loss and lead scrubbing, there's the chance that the affiliate network will start using your traffic sources themselves internally so they don't need you.
As an affiliate, and as an affiliate network, here are my thoughts on the subject....
Pros of working with network vs direct
Generally speaking, I've found that many of the best offers are on networks, because the advertiser themself wants to only work with 1 or 2 traffic partners to send them consistent traffic, which is especially hard for affiliates to do who are into paid traffic. If you do SEO that might be a tad easier.
Another benefit of networks is cashflow. One of the most important elements (and the most annoying frankly!) is managing exposure to risk (aka advertiser nonpayment), and 'float' (aka. the amount of money we are willing to float aka. the difference between the payment cycle of the advertiser who might pay out longer especially if they are a bigger/better/higher converting brand with leverage, and the payment of the affiliates, who are generally on weekly payments)
Another benefit of networks is that they can offer thousand foot views of the industry, and offer advice/guidance/etc that an offer owner might not be able to. Offer owners are generally not going to work with someone unless they are already pushing serious traffic to their offer in my experience.
Pros of working direct vs network
I think going direct is good if you have very consistent traffic month over month, and your support needs mesh with what the advertiser is willing to offer (some advertisers wont offer any communication, some want to offer the affs as much as possible).
Another (obvious) benefit of going direct is a higher payout and potentially higher EPCs! Generally networks take 10-20%, so that 10-20% can add up. Even if a particular network says they only take 5% or so, usually they inflate their profits with scrubs/shaves anyhow, so it all ends up being in the same range. However, that said, the higher payout only matters if you know this offer is the best on the market, and you cant get a higher converting one. The difference in conversion rates on various offers in the same niche can be enormous.
A final benefit of working with an offer owner is that you get the ability to help them optimize their own offer flow, and give them feedback/advice on how to do things such as make their sales pages and offer flow more congruent with your presell pages, as well as give them advice on what browsers/etc they can optimize their sales pages with, since all that data is generally available, and being analyzed by the affiliate, and is sometimes not being looked at by the offer owner. Lots of offer owners love feedback from affiliates on how to make their sales pages better, or will gladly create custom webpages for you if you are running solid and consistent traffic.
If you can blow the cap of an advertiser yourself it's best to go direct and enjoy the exclusivity. It's also risky. An advertiser is usually unknown, so if they fuck you no one cares.
Whereas if a network screws you over, and you go crazy on forums and internet about them; it will damage their cred and they in turn will lose business.
A CPA network is your insurance policy, for which you pay 10-20%.
A CPa network will also pay you weeklies, or every few days if you so desire.
They also have biz devel people, so if you got great traffic in some geo, you can ask your PM to have their guys find some offers for you.
Originally Posted by iAmAttila
It helps to have that dedicated AM that is going to work for you, connect with their biz dev side and try and continuously find you new offers to test based on your success. IF you're not taking advantage of your AM, then you're missing out on a big advantage of working with a network.
When I was starting with paid traffic, I thought going direct was the holly grail of this game and that without it, I had no chance to become really profitable. These days, I know that going direct brings so much additional hassle, that I barely do it anymore.
The risk of not getting paid, slow payment frequency, often lower starting payouts, absense of good AMs that actually notify you when the offer goes down etc ... When Im going direct these days, its only when I see an offer working exceptionally well and I know I can send a TON of volume to it. Otherwise I simply stay with affiliate networks where I already have good relationship with, I know their margins are as low as possible cause I send good volume and simply accept the small % loss.
Like Atilla said, I also take it as some sort of insurance and a fee for premium service and access to a ton of offers in one place.
If you're spending $10k/day on an offer through a network and breaking even, going direct means making $10k/day profit.
This is offer dependent though, some offers like SOI's will only get you extra 30-40% and you'll have to do NET-30 as opposed to weekly.
The happy medium IMO, is to run with a network that always give you max payout because they trust that you'll push the offer hard.
Originally Posted by thuglife
So you say with 10k daily spent and breaking even through a network, I could get 10k profit when going direct? So increasing my profit by 100% by going direct? Wish it was like this, I would run all my stuff direct if it was
Many affiliates think its always better to work directly with an advertiser rather than with a network. In some cases this is true but in many cases its actually better to work via a network
Why?
1. The most important reason is a financial reason. Advertisers tend to pay slow. If you're lucky you'll get the money 30 days after the month ended, but normally its around 60-90 days. Trustworthy affiliate networks will pay you on a weekly basis. This has a huge impact on your cash flow + time effect of having the money earlier enables you to invest faster in campaigns and traffic sources.
2. An affiliate network filters the bureaucratic and organizational aspect that comes with working with a direct advertiser. Big advertisers are big companies, which means lots of red tape.
This implies you need to invest a lot of time in meetings, negotiations, follow ups, etc. If you work with an affiliate network like ours, the only thing you have to do is signup as a Publisher to www.addiliate.com, you'll get approved within 24 hours and you can start running campaigns within a matter of a few hours.
3. An affiliate network has way more negotiation power with an advertiser than you as an individual affiliate. The affiliate network will fight on your behalf with the advertiser to get more budget, higher payouts, bigger caps, more countries, more traffic sources, etc. You have to be an extremely big affiliate (+10K/day as bare minimum) to have this kind of negotation power in order to get things done, fast, in a direct cooperation with the advertiser
4. I would always suggest to split your traffic sources among a 3-4 networks. Why?
- Spread your financial risk
- Compare statistics (CTR, CR, eCPM, ePC, etc) --> you'll see patterns if a dishonest network is trying to scrub more
- You can get more cap on a good offer. Many networks will give you caps on most campaigns, especially if you're a new affiliate. So if you run the same offer with various networks, you'll be able to increase your total cap
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