This month we’re preparing for the launch of a new merchant here at R.O.EYE. We will be running this on both a closed and open network, and I got to wondering… what is the general perception of this kind of strategy in the affiliate community? Are the benefits and drawbacks of both widely understood? To throw my two pence worth out there I’ve put together some observations which may help to explain some of the thought processes involved.

In my experience merchants face two very important considerations when deciding on which strategy to employ depending of course on the industry and product, and these are typically reach and control.

For example, a non-premium branded retail merchant will be more concerned with driving sales than brand compliance and have few reservations about allowing affiliates from as many different genres join the programme as possible. In contrast a premium-branded, FSA regulated finance merchant will need considerably more control over the programme as they need to consider compliance as well back-end quality if the programme is paying out per lead for example.

Closed networks offer the merchant a good degree of control because the affiliate manager or agency can keep affiliates close and develop mutually beneficial working relationships with them. Good communication then facilitates effective programme optimisation from a quality perspective and compliance management, ticking two very important boxes.

Another big box to tick is of course volume of sales (or leads) and for this it helps to have access to large numbers of affiliates. Open networks offer considerably more reach in terms of accessing affiliates and depending on the network can attract specialist affiliates in a variety of different verticals. Other benefits include the extremely valuable add-on services such as XML product feeds, widgets, APIs, etc which can be of huge benefit and often integral to making the programme a success.

However it is also true that these add-ons are not always required and in some instances are left completely redundant, which then brings into question the justifiability of the network override. This becomes a very important consideration where for example the programme objectives involve working to a cost-based KPI.

If only a standard tracking solution is required then a closed network is preferable as this eliminates the inflationary impact of network overrides and creates cost efficiencies. This means the programme is not inhibited in its ability to deliver to the cost based KPI and the maximum commissions can be passed on to attract, recruit, and nurture top performing affiliates.

In summary it’s very much ‘horses for courses’ but decisions whether to run an affiliate programme on a closed, open, or mixed strategy often stem from some of the considerations covered in this blog. In all instances however the decisions made must satisfy the merchant objectives and provided that is the case there will always be a successful programme for affiliates to be part of.

networks · programme management · tracking