Having been in the affiliate marketing business full time for over three and half years now, I changed how my business functions multiple times. When I first started in 2004, I was mostly using PPC engines to get cheap clicks for my gaming websites that were plastered with ads.
As I began to research who was paying for the ads, I began to learn more about the potential of affiliate marketing. Eventually that lead me to becoming a full time affiliate marketer in early 2007. That's also around the time I closed my old blog down and started this one up. Although my business is still mostly focused on affiliate marketing, it's not the only thing I do now.
Like I said, it's an evolving business. And that brings me to now.
One thing I have been doing this past year to year and a half is going direct with certain advertisers. For those that don't know what "going direct" means, it basically means that I have a direct affiliate relationship with a company (advertiser) and cut out the affiliate network.
While this is certainly going to be a part of business model going forward, there are many pros and cons that come with that territory that I hope to cover.
The Good
- Higher Payouts - Yea, obviously not have the networks take 5-20% off the top is a nice increase in pay. This is the most obvious reason for going direct.
- Direct relationships - Being able to talk directly to the company about your campaigns can bring some great benefits. Because they know you personally, they're less likely to just charge back bad leads, talk to you before making changes (sometimes), and keep you in the loop on future changes. Basically, if you're making the company money, they'll want to keep making you happy and do whatever they can to have you stay there.
- Exclusive Offers - Sometimes you'll be able to have exclusive offers that nobody else (or a few people) will be able to run. This can lead to big paydays. If you can't get an exclusive on an offer, you'll at least be one of the first to know about the new offers that company is making.
- Insider Wisdom - The people who make the offers generally have a lot of data and knowledge about the niche they're working in. Being able to pick their brain a bit is often quite beneficial when you're making your campaigns.
- Brokering to your friends - If you're fortunate enough to have an offer that is fairly exclusive, you can broker the offer to your friends and make a bit of money on them and they'll make a bunch of money as well.
As you can see, there are a ton of good aspects to having a direct relationship with an advertiser. Unfortunately affiliates tend to only think and focus on these aspects. Now, let's look at the negative.
- Long payment terms - Nothing sucks more than having cash flow problems and when you're being paid net 30 or net 60, it's easy to happen when you're spending big bucks advertising.
- More Risk - Because this company does not necessarily rely 100% on reputation like affiliate networks do, if they don't pay you (go bankrupt, realize they cant afford it, etc), the things you can do to get back at them are a lot less than an affiliate network. I've had this happen once and lost almost $10k in affiliate commissions. It could have been a lot more but I don't like to run a huge amount of traffic to direct relationships until they have a proven payment record with my company. That way I don't lose 6-7 figures like I have heard some companies losing out on.
- Accounting - Believe it or not, not every company is the best at timely and correct payments. With affiliate networks, you really just sit back and collect the checks. When you're direct you really have to be on top of getting paid. I can't tell you how many issues I have had. It's usually wrong number of leads, they forget to pay you, there was some thing they needed to go over, etc. It can be very time consuming to do this.
- Buy Affiliate Network Tracking Software - You need to be able to accurately track your leads / sales. Trusting the advertisers system... probably won't cut it in most cases. Unfortunately, most cost an arm and a leg so unless you're making significant revenue, it's probably not even worth the extra 5-10% in revenue. That's why I have used HasOffers (and love it). It's cheap (mid $xxx/month) and really effective.
- Chargebacks - A lot of direct advertisers want you to be responsible for chargebacks or refunds. If the customer does a chargeback, the advertiser or affiliate network (more often than not) eats the cost of that chargeback. But, when you have a direct relationship, you can find that sometimes they will adjust your commissions and numbers based on chargebacks and refunds... And unless you do something about it in contract, you can't argue with them over it.
- IO's, Contracts, Legal Blah Blah Blah - Signing IO's, reading contracts, and all the legal blah blah blah can be a bit overwhelming and confusing at times. You never want to go into a direct relationship without some type of contract. It's important to remember... this is NOT an affiliate network.
- Transparency - When you're at an affiliate network, there is a certain level of transparency that you need. It's no different with advertisers. They'll generally want to know as much information as you'll give them about the campaign you're running... It can be a tough balancing act to keep them happy and to know how much is too much information.
- Did I mention how much net 30, net 45 and net 60 payments suck? Haha
So overall, there are a lot of benefits and a lot of negatives. I know that I will always use a mixture of both affiliate networks and direct relationships in my business as long as I am an affiliate.
HasOffers
I want to take a minute to talk about the main tool that I used to go direct with advertisers. My direct advertiser platform of choice is HasOffers. Like I was saying above, they have the best bang for your buck...
The tracking is extremely accurate, the system is very easy to use, and the invoicing of clients is quite easy (auto generate invoices).
Besides all of that, the base model is only $99 per month. Compare that to the $1000+ per month of most other affiliate network software and you'll quickly realize that HasOffers is a great deal.
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