Affiliate Marketing for Retailers – In-House Vs Outsourced Affiliate Program Management
Affiliate programs are a profitable way for online businesses of all sizes to generate incremental income. When it comes to managing an affiliate program, companies have two options — hiring an in-house affiliate manager or outsourcing their program’s management. Both options have their pros and cons, so which one is best depends o both the company and the affiliate program itself.
In-House Affiliate Management
Pros
The benefits of an in-house affiliate manager (sometimes called an AM) mainly revolve around communication. When your affiliate manager is sitting beside other online marketers on a daily basis, they’ll be more in-tune with the company’s other marketing initiatives, such as PPC, SEO and email. By understanding what does and doesn’t work in the company’s other online marketing channels, the AM will be better able to make suggestions to affiliates who utilize those strategies in promoting the affiliate program. An in-house affiliate manager can build relationships with the retailer’s buyers and merchandisers, leveraging their expertise to inform affiliates of best-selling brands, categories and products. Additionally, AMs sometimes have an easier time dealing with technical issues, such as product datafeed problems or conversion tracking. Because they are a full-time employee, they’ll find out about technical issues faster than an outsourced affiliate manager, and be able to alert affiliates to the problems quicker.
Cons
Often times, there is not enough work to keep an AM busy for 40 hours a week. Additionally, in-house affiliate managers typically only work business hours (Monday – Friday) and are not likely to work on your program during evenings or weekends, resulting in longer response time to affiliate questions and/or applications. Finally, finding a qualified AM can be difficult and costly, since affiliate management is a specialized skill that often commands a higher salary than many companies can afford.
Outsourced Affiliate Management
Pros
The benefits of outsourcing your affiliate program management typically pertain to cost and availability. Most outsourced program managers (sometimes called OPMs) charge a flat monthly rate (and sometimes a rev share on generated sales) for managing your affiliate program that is less than the cost of an AM’s salary. In addition, since you aren’t hiring a full-time employee, companies also save money on benefits, such as health insurance, vacation days or bonuses, that they would normally provide an in-house affiliate manager. OPMs are also able to leverage affiliate relationships and strategic learnings across the multiple affiliate programs they manage. This is helpful for companies who are having difficulties in recruiting new affiliates to their program or maximizing existing affiliate performance. Additionally, outsourced affiliate managers are not bound by “normal working hours” and will often respond to affiliates in a timely manner, even during evenings and weekends.
Cons
Some businesses are uncomfortable putting their affiliate program in the hands of an outside company because of a perceived “loss of control,” but this is typically not an issue in the long run. However, it is true that utilizing an OPM can make communication more challenging because most outsourced affiliate managers have one point of contact within the marketing department, who then relays questions or issues to merchandisers, designers or programmers. Additionally, OPMs will likely not be as up-to-date on the company’s general strategies or business initiatives because they are not in the office. Still, these concerns can usually be alleviated through weekly meetings, conference calls or frequent email communications.
How to Choose?
When deciding whether to use an in-house affiliate manager or an outsourced affiliate management company, it’s important to consider the goals and objectives you’ve set for your affiliate program. If you have an established program and your top priority is expanding your active affiliates and maximizing sales, you may benefit from the expertise and availability of an OPM. You may also prefer outsourced management if your company is trying to keep marketing and human resources costs down, or if your company already outsources its other marketing efforts.
However, if you are just launching your affiliate program and want it to be a core component of your marketing initiatives, you may want to hire an in-house affiliate manager who can show you the ropes and interact directly with designers, merchandisers and programmers. Companies who have chosen not to outsource their other marketing programs may also find an in-house affiliate manager a better option.
Danielle Mead is the owner of PopStringDrink, an online marketing and e-commerce services company that specializes in affiliate marketing management. Online retailers interested in outsourcing their affiliate program management should visit http://www.PopStringDrink.com to request a proposal and pricing.
Author: Danielle Mead
Article Source: EzineArticles.com
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