Companies that have something to sell, i.e., Advertisers, meet with companies that know how to sell their products, i.e., Publishers through affiliate marketing networks. According to Lior Poly, these networks work on a performance basis such that payment is only made when a sale is generated. When the affiliate network generates a deal for you, you award them and they, in turn, pay their publishers for generating sales on your behalf.
However, Lior Poly says that not every product or service will work with an affiliate campaign. Affiliate networks will turn down your offer unless you meet specific criteria. For instance, you need to present a low-risk bargain for individual product sales that will attract customers, like free services for a month or a free trial on a product. Until you have experience in internet marketing, Lior Poly advises against affiliate networks due to their volatile and risky nature that stems from both the performance-based environment they provide and the marketing power available.
Lior discusses some of the risks that come with affiliate Networks:
Affiliate Network Marketing Risk:
1. Insufficient business. You have channeled a lot of time and resources into building a campaign, website design, bulking up your sales staff, and commissioning marketing creatives. However, your offer is not a moneymaker for the publishers, and they are not marketing your campaign. Your anticipation of increased sales thus never materializes.
2. Overwhelming business. The publishers love your offer so much that the sales are flowing in faster than you can handle. The publishers are generally generating more sales than your pocketbook can hold out, and all this business is overwhelming you.
3. Dishonest networks. Sometimes your marketing campaign could be generating a lot of leads but not making sales. The tips coming in are invalid credit card numbers, people who only signed up for free giveaways, gifts, and disconnected phone numbers. Yet, the publishers are submitting fake information to get paid.
Alternatively, some affiliate marketing networks can request that they be the only marketing networks that can provide your offer to the world. This is known as an Exclusive Affiliate network campaign, and Lior talks about some of the advantages and disadvantages of having your campaign run exclusively.
Exclusive Affiliate Network Campaign Advantages:
1. Time-Saving. You don’t have to seek new networks, marketing creatives and organize campaign launches as your affiliate marketing campaign manager manages your account for you.
2. Cost-efficient. You will not incur any startup fees or sign contracts for the networks that your manager passes your campaign on to.
3. Increased sales or lead flow. Most affiliate marketing networks prioritize their exclusive campaigns, and therefore, your brand is likely to get more visibility due to publishers’ and advertisers’ particular attention.
Exclusive Affiliate Network Campaign Disadvantages:
- Unknown quality of web traffic coming into your website as someone else is managing your campaign.
- Your manager may not be as driven as you are, and therefore, your campaign may end up not being passed on.
- It decreased publisher bounty that reduces interest in your campaign.
The risks that come with affiliate network marketing are many and significant. Lior Poly says that you must think on your feet and develop solutions for an offer that favors everyone if you want enormous financial rewards.