If you want to invest in affiliate marketing, you need to decide which type of network to use. Public or private network: which is the right choice? We explain the differences and the pros and cons.
In recent years, affiliate marketing has once again become an important part of the marketing mix for many online shops. One in every seven euros in e-commerce is generated through affiliate marketing. According to the German Association for the Digital Economy (BVDW), there are around 40,000 publishers, 7,000 advertisers and 150 agencies in Germany.
An affiliate network is the interface between vendors or merchants and affiliates (partners). A merchant offers certain products (advertising materials) that affiliates can publish and promote on their websites. If you want to invest in affiliate marketing, sooner or later you will have to decide on a network model. There are two options: public networks and private networks. Each approach has its own advantages and disadvantages.
Making the right decision
Whether you choose a private affiliate network or a public network, you should weigh your options carefully and never decide on short notice. Considering certain criteria can help you make your decision. These might include:
- The required or planned visibility of the partner program and, along with it,
- the required or planned reach of the partner program
- The size and strength of your own brand
- The publisher models you want
- The price level of your products
But how do private affiliate networks and public affiliate networks differ – and how can you combine the two models effectively?
Advantages of a public affiliate network
A public affiliate network is a network that affiliates join on their own initiative and, once registered, can sign up for various partner programs. You can think of it as a kind of marketplace, with the provider supplying the technical infrastructure. This includes, for example, providing advertising materials, tracking and paying out commissions. Almost 90% of the top 100 shops that use affiliate marketing take advantage of the benefits public networks offer. A public affiliate network brings together countless affiliates and merchants. For advertisers, this has several advantages:
- There is a large pool of publishers (and more keep joining)
- You benefit from a wide reach
- Publishers apply to the program, so merchants don't have to actively search for publishers
- Many different publisher models are possible
- The provider makes sure the public network keeps evolving and stays technically up to date
- Invoicing and payouts are handled by the network provider
Disadvantage of public affiliate networks
All of this comes at a price: the networks earn a commission on every sale the affiliates generate. Some network operators also charge ongoing fees. These costs are often the main reason why companies decide against a public affiliate network.
If you choose a public affiliate network, your next step is to choose a network provider and the network where you want to offer your partner program. Some merchants offer their programs in several networks or combine a public affiliate network with a private affiliate network run in parallel.
Advantages of a private affiliate network
Besides public affiliate networks, which are visible to everyone, private affiliate networks give advertisers the option of running their partner program on a closed, private system.
The advantages of a private network include exclusivity as well as a high degree of control and close collaboration with publishers. Tracking accuracy can also be higher in private networks. These are the advantages of a private affiliate network:
- Cost savings compared with commission-based public networks (above a certain network size)
- The money you save can go towards higher commissions for publishers, which in turn can increase your own revenue
- The data isn't held by the public network operator but “belongs” to the advertiser
- Close ties and relationships with publishers, often including personal contact, which minimizes the risk of fraud. At the same time, this can lead to higher revenue because you can respond to each publisher's individual needs and capabilities
- Less work thanks to individual process optimization and automation
- Reliable tracking thanks to true first-party tracking and compatibility with ITP, ETP and SAMESITE
- The private network can serve as a central platform for partner activities and direct partnerships
- Private networks are flexible and can be individually extended with optional add-on modules and services
- A private network as an affiliate hub to centralize operational activities
- Customization through complex attribution models
But even private networks have a few drawbacks alongside their many strengths. For example, you have to handle publisher acquisition yourself, because otherwise affiliates won't find out about your private partner program. In general, you have to take care of tasks that the network operator would otherwise handle in a public network. With a good partner by your side, though, this is easy to manage too. At easy.MARKETING, for example, we offer various modules that automate recurring work, saving you a lot of time (and therefore money). We also support our customers with the technical setup and put the system into operation together with them.
Combine networks for maximum performance
For larger merchants, it makes sense to combine both network models. It's no coincidence that many of Germany's top shops use both a public and a private affiliate network. You can use the public network to connect many smaller publishers to your company and keep attracting new affiliates through its public visibility. You can then move your top publishers into your own private network, where both sides benefit from the close relationship. Publishers may also benefit from a higher commission and personal support, while the merchant saves the proportional costs of the public network and builds a setup that's ideal for its needs. Automation, closer partner relationships and long-term cost savings are factors that Germany's mid-sized companies have now discovered for themselves as well.
A holistic tracking concept and attribution tailored to the shop and its goals are at the heart of comprehensive performance marketing. With coordinated modules and processes, tracking switch and affiliate network systems can simplify day-to-day work, improve tracking, save costs and ultimately increase revenue.
If you have any questions about our easy.LÖSUNGEN, such as easy.AFFILIATE for advertisers, feel free to send us an e-mail via the contact form. Together, we'll find the best and most suitable system for you.
