For many companies, affiliate marketing has become a cornerstone of the marketing mix, helping them extend their reach and grow revenue. Companies often start out in a public network before aiming to move to their own private affiliate network. Public networks are easy to access and offer a wide range of potential partners. Private networks, on the other hand, offer exclusivity, greater control and potentially higher profits, among other benefits. So when is the right time to make the switch?
The difference between public and private networks
Affiliate marketing (also known as partner marketing) has two types of networks: public and private. Public networks such as awin.com are a good fit for small and mid-sized partner programs. Expanding your strategy with a private affiliate network doesn't make sense for every company and its partner program. But if you think the move through carefully, it opens up major opportunities to scale your partner program.
A public affiliate network is a network that advertising partners (affiliates) can join on their own initiative. Think of it as a kind of marketplace, with the network provider supplying the technical infrastructure. This marketplace structure makes it easier for affiliates to find programs and companies that interest them, so affiliates and companies connect more easily. Besides public affiliate networks, which are visible to everyone, companies can also opt for a private affiliate network: a closed, private system for their partner program.
The advantages of a private network include exclusivity, a high degree of control in many areas and closer collaboration with publishers. Tracking can also be more accurate in private networks. On top of that, there are many other differences between the two types of networks.
Why you should switch to your own private network
With their own private affiliate network, companies can bring their top partners into their own network and build more direct relationships with them. This not only increases transparency but also enables more effective communication, which leads to higher-quality partnerships. These are the main reasons to consider running your own private affiliate network:
- More control over your brand image and the content associated with your brand
- More flexibility
- More precise design and management of affiliate relationships
- Potential cost savings compared to the public network (if you withdraw from the public network)
Determine the strategic timing for switching affiliate networks
The decision to move your partner program to a private affiliate network should be based on thorough analysis. Key factors include your company's growth and the stability of your partner program. The timing is ideal once your company has reached critical mass and demand for exclusive partnerships is rising. A positive trend in these areas may indicate that the time is right to take more control of your affiliate program and benefit from a private affiliate network. The following can help you assess this:
1. Evaluate performance, stability and growth trends
Analyze and evaluate your performance in the public network in detail. Are you achieving the results you want in terms of revenue and profit, and what does your return on investment (ROI) look like? Stability is another important factor. Fluctuations or inconsistencies can also signal that change is needed.
As part of this analysis, don't lose sight of your company's growth trends and future goals. A private affiliate network can provide the scalability and adaptability needed for a new marketing strategy, for example. Private networks often target specific niches.
2. Analyze your partner relationships
Besides hard factors such as the revenue and ROI your partner program generates in the public network, there are many soft factors you can analyze. Evaluate your relationships with your partners in the public network. Are you happy with the quality of your partnerships, and are you getting the right support? Switching to a private network lets you select partners based on their performance and relevance to you, which strengthens collaboration. However, acquiring partners takes more effort. That's why it can make sense to stay in the public network in parallel to draw more affiliates' attention to your partner program. You can then move your top performers into your private network.
Building long-term partnerships is essential for sustainable growth. Private networks foster deeper relationships with partners, which strengthens loyalty and collaboration. If your goal is to build lasting partnerships based on mutual trust and shared goals, a private network may be a better fit for that strategy.
3. Branding
By acquiring partners for your partner program in a targeted way and having more control in a private network, you also gain more control over the content associated with your brand. This reduces the risk of negative associations with your brand and improves brand protection.
Evaluate technical capabilities and keep an eye on industry trends
Evaluate the technical capabilities and infrastructure of your current affiliate network. If you'll soon need advanced tracking, reporting or integration capabilities, a private network may suit you better. It can cater more closely to your individual requirements, and suitable extensions can be developed on request.
New technical requirements can also arise from new legal requirements, such as new data protection rules. That's why it's important to stay up to date on industry trends and developments in affiliate marketing. In 2024, the major browsers will block all third-party cookies, which means first-party tracking needs to be pushed forward right away. Our free newsletter keeps you informed about important changes in the legal and technical landscape. Subscribe now and never miss important news again!
Final step: Moving to a private network
Public networks often have lower barriers to entry, but they may not always deliver the best return on investment (ROI). Private networks can involve higher upfront costs, but the greater level of control and optimization potential can lead to a higher ROI in the long run. Before you plan the move, your partner program's revenue should at least cover the base costs of the private network.
The move to a private affiliate network itself takes some planning. Above all, you need to decide which technology provider will implement the project. Not every affiliate software on the market is equally flexible or offers the same features. To stay GDPR-compliant, you should choose a European or German solution that doesn't transfer any data outside the EU (e.g. to the USA). With over 1,200 hosted campaigns, the easy Marketing Cloud is one of the most powerful affiliate systems. It's made in Germany and relies exclusively on server locations in the EU to meet strict data protection requirements. Many large companies, such as the Otto Group and MediaMarktSaturn, have relied on easy Marketing's affiliate solutions for many years. Request a free demo account and we'll get in touch with you!
