Building an affiliate program involves a ton of decisions. There’s the commission structure, whether you pay out on a CPA or revenue share basis, outsourcing vs. handling it all yourself and so on. One other key choice, however, is whether to go public or not.
Don’t worry, there are no IPOs or stock certificates involved in this one. A public affiliate program is one that’s completely open. Anyone can apply and it’s real easy to find information about the program on your own site, network interfaces, affiliate directories, etc.
Private affiliate programs are exactly what they sound like. They’re by “invitation only”, and sometimes known as “working direct”. They’re not easy to find at all, and companies go out of their way not to advertise that they even exist.
So which option should you choose for your affiliate program? Well, that all depends on what you’re looking to do. Both have their advantages for sure, so take a look at the following points and see which style best fits your program.
Private Affiliate Programs: The Good
- Time Saver – If you’re real low on resources, you won’t have much time to devote to your affiliate program. You’re too busy working with your customers to worry about approving tons of potential new affiliates everyday. A private program means you won’t have a slew of publishers knocking down your door. In fact, you won’t have any. You’ll only have the ones you invited.
- Cream of the Crop – It’s commonly known that 80% of revenue in an affiliate program is generated by 20% of your network. That means only 20% of your entire group of affiliates is really driving the bulk of your business. So rather than waste your time with a giant group of affiliates, go private and only go after the best in the business. If you do it right, you’ll basically have that Top 20% without all the rest.Yes, you’ll have a much smaller affiliate pool, but we’re talking one high-end pool!
- Isn’t that Special – By making your program private, affiliates who are invited will feel super extra special. Knowing that they were specifically invited may boost their ego quite a bit and get them to jump onboard full-force. Feeling special, they may promote your site more than they normally would if it were a regular public network.
- Quality, Not Quantity – As stated in the Cream of the Crop above, you’ll only have appropriate and stellar affiliates in your program. Public affiliate programs tend to attract a massive amount of, shall we say, “less than reputable” types of sites.
- Taking a Test Drive – Not completely sold on running an affiliate program? Well, if you want to take it for a test drive and only use a small sample of affiliates to see what sort of results you get, a private program is a great way to go.
Private Affiliate Programs: The Bad
- Limited Growth – While a private program can let you cherry pick the best in breed of affiliates, it doesn’t leave much room for growth. In a public program, you’ll always find a few of those diamonds in the rough. The ones who end up killing it and producing better results than some of your pre-existing top affiliates.
- Anger the Industry – Sure the select few who are invited to your private program may be on cloud nine thanks to your offer, but what about the zillions of uninvited affiliates? Once word gets out about your private program (and it will), many of the vocal affiliates will certainly express their unhappiness in not being invited. They’ll inundate your company and the network or agency running your program if you outsource it.
- Quality and Quantity – While that cream of the crop 20% of your affiliates will bring home 80% of the bacon, why would you want to just leave that extra bacon sitting on the table? If you have the resources available, go for quality and quantity to maximize your earnings potential.
- Your Credibility may be Questioned – Some affiliates may avoid private programs for one simple reason: They feel you’re not that into it. When there is not a 3rd party like an affiliate network involved to keep the advertiser accountable, the affiliate could feel at risk that you will not track their sales accurately or more importantly–get paid. They may think you made it private so that you don’t have to put a lot of effort into it at all. Or maybe that you’re thinking of pulling the plug on the program any second, so why should they bother promoting it?
- Burning Money – If you’re running your private program through a major network like say Linkshare or Commission Junction, you’re paying a lot of extra money for features you will never use. A big part of using a network like that is they can help you grow your program by promoting you all over their site and in their affiliate emails. But since you want to keep things quiet about your program, you can’t take advantage of those features which you’re already paying a network fee for. Might be cost-effective to consider a 3rd party tracking platform like Impact Radius, Performance Horizon Group, or HasOffers.
There’s really no right or wrong answer in terms of which path to choose. Generally, private programs are run by high-end merchants. But that’s not to say any other merchants can’t choose to go private. In the end, only you can make the call and there’s nothing to say you can’t change your mind at any point either.