Affiliate Marketing: In-House vs. Outsourced; An Inside Look at Both

Which method is best for your business model? Does one method adapt better to your strategic planning then the other? Does it matter what size your business is? If you’re looking into which method is best for how you operate the information you find here may change your outlook on that decision. (Hint, use both.)

…..First I want to thank Geno Prussakov for writing an article the other day and on choosing between and in-house affiliate marketing manager and an outsourced marketing manager. These affiliate marketing management points will help any company, large or small, looking deeper into how to manage their affiliate marketing program to find a solution that fit their business model.  I did however notice that the topic or facts given by most of these articles and visual sources tend to be askew simply by the fact that an OPM or an Outsourced Marketing agency is writing them.

Consumer_Trust_Graph

…..As marketing professionals we understand that consumers have become weary over the years of what brands say about themselves, the product they carry, or the services they offer.  The real benefit today comes from people giving you their opinion and recommendation of companies and product. People that have bought and used them have a unique viewpoint as they don’t typically have the same vision or perspective as the marketing department. Just as this article from Social Commerce Today depicts. (Ironically this article also helps provide increased reasons for having an Affiliate Marketing Program as part of your companies overall marketing strategy, but I’ll get to that later)  This is where I want to lend my opinion.  I am an In-House Program Manager 9-5 at Jenson USA, I also use an outsourced program manager to help with the expanded tasks I have. Also over the last few years I have been an outsourced program manager working for two great firms and had my hand in over 20 separate affiliate programs. That’s given me a unique perspective that can help you know what direction would be best for you. In short my opinion is that a blended solution is best, just like the different stages of a rocket reaching skyward for orbit.

 

…..While engaged and reading Geno’s blog post I noticed this infographic and honestly I was a little disappointed at the disparity of the sides. When I looked into it further I found that the company that created this was in fact an outsourced marketing firm While I appreciate their description of what affiliates are I want to expand on their points of which type of management is best; In-house or Outsourced . I’m also going to take into account the size of the operation, I feel that is one point they missed, and in today’s market while many small owner operated sites are establishing their programs, Large brands are also facing the same question, and have an entirely different outlook and resources available to accomplish this task.

Affiliate_Management _Connections

…..As pertaining to  connections  right out of the gate if you are looking at an outsourced marketing agency versus a green affiliate marketing manager with ZERO experience, this statement is true. An outsourced marketing agency does come with a ‘Rolodex’ of affiliates that they have established relationships with, BUT there isn’t any real guarantee that these affiliates fit your business model, or that they are affiliates that focus on your niche. From my experience outsourced marketing agencies do have a categorized list of affiliates they work with these are typical categories:

  • Mom bloggers
  • News Outlets
  • Coupon sites
  • Cash back sites
  • Deal of the day sites
  • PPC bidders
  • Social Marketers
  • Content sites
…..The smallest of their list is going to be on content affiliates that fit into your niche (These are your PRIME money makers.)  There are exceptions of course to this statement. If you find an outsourced marketing manger that manages or has managed a direct competitor of yours, they will have a sizable list of content marketers specifically for your business model. Now let us say that you’re a larger company, or you have spent time researching your needs. If you are hiring an experienced affiliate marketing manager for an in-house position they are also going to have these types of connections, especially if they have been in that position for a few years. If you manage to convince an affiliate marketing manager that has been in charge of a competitors program then you have just struck gold. Hiring an experienced affiliate manager will not only make a quicker than typical improvement, but they can make a lasting change for the benefit of your program, the environment of your office, and your profits. The trick here is consulting with your human resources team and getting a proper job description built that has the right salary and benefits package, and knowing where affiliate marketing fits into your strategic planning endeavors.
…..For Large companies a good strategy would be to hire an outsourced program manager to begin the setup (or refinement) of your affiliate program as you search for a In-house affiliate marketing manager. this will help swell the ranks of affiliates that you have and ease your management stress as you do your search. Once the position is filled work close with the outsourced program manager to train your new in-house program manager. Once you feel that your internal candidate has the experience he needs (plan on 6 – 9 months) end the contract and take full responsibility in-house. For Smaller companies this method is also perfect except instead of only having a 6 – 9 month contract plan on something longer (I recommend 24 months) this helps set a time frame in place and gives you goals to achieve. Remember with any marketing effort especially one as long term as affiliate marketing it takes time to plant the seeds of success.

Which Experience is Greater

…..Experience – Hiring in house managers is to quote, “risky” they, “[need] training and guidance.”  I agree that hiring more personnel is a risk, mainly a financial affordability risk, but hiring a dedicated affiliate marketing manager isn’t any more risky than hiring any other marketing related position, this statement also take no thought into account of how you create your job description or your ability to interview and find the right person that fits your company dynamic.  As for Training and Guidance, everyone needs that when getting settled into a new position, sure does that mean that your manager is going to make huge gains in the first few months, probably not, but in the long run their connection to your organization and buy in to your companies vision and objectives will create far greater gains, and a highly customized individual for your needs.
…..On the flip side, “OPMs know what works and what doesn’t” is a great tagline, but hardly true. There hasn’t been one company that I’ve done marketing efforts for that every point from the previous company fit right into, unless all you did previously was create coupon codes that devalued your brand and inventory.  Coupons and discounts are universal, but every company has a business model, an ideal, A methodology that helps them establish what efforts add true value to what they do. In fast this is on of the negatives of an OPM. Their experience is a mile wide, but only an inch deep, and they suffer from a lack of communication from merchants, and even merchants at times suffer from a lack of communications from their OPM. Which brings me to their next topic.

…..Affiliate Program Management, “is not a one person job.’  This statement has too many variables to make a valid statement. Are we assuming that the entire marketing department consists of this individual? speaking of job descriptions for an affiliate marketing manager will require relationship management, HTML knowledge, the ability to be a public face for the company, creating and sending out a regular newsletter, maintaining key performance indicator reports, managing the relationship with the art department to get creative that is focused and timely. Managing several tasks at once is required in today’s world. I’ll state again that making your job description very specific so the individual position to assure that the company can hire a qualified and capable individual is most important.

…..In this day and age I don’t know of a single individual that isn’t required to maintain their schedule and balance an ever growing lest of responsibilities. I think there is truth in both sides of this coin, but there are some good points left out too. I think it is very true that most affiliate programs start out as pet projects managed by the marketing manager or company owner and we not considered heavily in a strategic planning session. Chances are that if you’re reading this you’re in that position, or you’re trying to fill an open position and are looking at your options. While yes an in house affiliate program manager is going to be asked to do more internally this is actually a strength. They know the inner workings of a company and can relay whats happening to affiliates savvy enough to take advantage of it. They might walk the docks and see a new product land and know of an affiliate that can push the sales of that item. They might sit in a business development meeting and overhear your objectives to increase sales in X and be able to inform an affiliate that can maximize that effort. They can also be there when you want to talk to them about your branding strategy and how their relationships can support you.

…..Personally I was the ‘clean slate’ and had no previous knowledge about affiliate marketing. Previously affiliate marketing tasks were managed as a side task by the marketing director, but these are my current responsibilities. Most companies I have dealt with maintain a graphic team in house, as well as an IT department in house. Both of these individuals will help in the long term growth and overall competence of your in-house affiliate marketing manager.  I have also worked where these are outsourced tasks. I think often one of the weaknesses of Outsourced program managers that they can outsource everything. The brand can be diluted, or a specific campaign  message lost in translation. Responsibilities can be over delegated and accountability can be loose which can overrun deadlines. Some of outsourcing might not be to the quality that you require.

Worked_To_Death

Don’t work yourself to death, get help

Large companies can benefit from not only having one individual managing the affiliate program, but can create a small department  with an affiliate marketing manager, and account managers or support staff that can help with the work flow. If your team is headed into the busy season of your annual cycle, or is facing an unexpected boom in business outsourced program managers are an excellent boon to your efforts.  They can be contacted, contracted, and be taking on tasks in as little as a week. They can help your department become the best blend of In-house and Outsourced management and be most efficient. An added point to consider is to also plan on the success of your affiliate program. regardless of management.  For in house management at some point in time you will have enough relationships, creative requirements, reports, and  other responsibilities to require expanding your affiliate team. For small companies this statement is true. The companies affiliate marketing program is not going to succeed and become it’s best as a side task of someone in-house. Getting a dedicated team is the best way to go.


…..Out of respect for the In-house manager I know I have to disagree with this statement. This statement is based on an assumption that as a business owner, marketing manager, or even a Chief Marketing Officer you are not capable of hiring the right person, of training them to properly perform their duties, and not understanding how to manage them in a way that allows them to grow and excel in their craft. It also excludes that outsourced program managers are human, that they never play favorites with the accounts that pay them the most, or that they need no communication with their clients to gain the insights they need into your program to be able to create the communications, deals, coupons, banners, and talking points for the month and really become your advocate.

…..If you operate a larger affiliate program your in-house affiliate marketing manager is going to be an asset to your team. They will attend your strategic planning sessions for the month and be able to give insight to unify and maximize your efforts. They will grow to understand your seasonality, to understand the cycle of products, know about new product offerings, speak directly with your vendors, attend vertical specific trade shows and conferences and bring all of their previously acquired skills into your office for the betterment of your direct team. For a small affiliate program an outsourced program manager is going to have the ability to outsource workloads and keep your tightly knit team focused on the tasks that they are already doing and be able to provide an expanded team of professionals at a set rate.



…..When dealing with large affilaites who’s focus is borad I completely agree that Affiliate Connection Overload is a  very real hurdle that affiliate marketing managers need to overcome. Outsourced program managers also have a distinct advantage of leveraging multiple brands and opportunities for a single affiliate. For example a conversation I may have with that affiliate would be, “I have three programs that are willing to pay for a placement this month over your competitor if you are willing to add extra placements for these two smaller programs.”
Yet I have found that content niche affiliates that are really focusing on sites that mirror your business model are less distracted and overwhelmed. Often you know them by name, have their phone number, they have your phone number, You may have attended a function with them. That type of relationship takes your communication from “requests and information” to a familial and conversational one. Here you can inform them of opportunities in a much more detailed and persuasive manner. Affiliates can easier  This whole concept goes back to the classification of the affiliate to determine just how busy they can get.

…..As for which may be best for you, If you operate a larger affiliate program it may be best to handle it in-house and build that intimate environment of communication that allows you to convey your strategic planning for the coming month. If you have a smaller affiliate program working with an outsourced program manager who maintains a respectable portfolio can help you get the upper hand  on placements and communication with sites known to drive traffic.


…..There are many ways to accomplish the task of successfully managing an affiliate marketing program in my opinion your best bet is to blend the services of an outsourced program manager to get started and help train your new manager, or to alleviate your personal work load as you seek out a veteran In-house manager. Then to have your program managed in-house calling at time on an outsourced program manager to assist with their workload as the department expands. in this way will your business and profits always have the attention they need to increase and continue with out interruption. After all the financial success of your company is your main objective.

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