I love the flexibility and customizable look and feel of in-house affiliate programs. These platforms can also be cost effective for advertisers as many of them only charge a flat platform cost and don’t incur varying monthly network fees. However, a few situations can arise regarding resource costs that aren’t apparent upon first glance. We tend to associate affiliate costs with affiliate management, affiliate commissions, network fees and flat paid media, but I’ve compiled a list of three inconspicuous costs that can also cause significant strains on resources.
1. The True Cost of Paying Out an Affiliate
Some in-house platforms don’t perform affiliate commission payments. The hours and resources required by the finance team to pay out these affiliates is unclear. Depending on the size of the program, many hours may be required to complete a monthly payout schedule. Each publisher must be paid out within the advertiser’s internal accounts payable system and finance will need a monthly report of affiliates to be paid out with commission amounts.
For programs that require a minimum payout, a running total will also need to be kept on file for those who make under the minimum payout in a given month. The cost of mailing out checks can also be an incremental cost. These finance team hours can add up, especially with a program with thousands of affiliates and smaller affiliates earning a few dollars a month.
There is also a large room for error with payouts – checks missing, outdated payment info, lost mail, affiliate inquiries about all of the above. An accurate cost assessment should factor in the additional hours needed to solve each issue. There are payment solutions available that solve this process as a whole, but these platforms also come with an additional monthly fee.
2. Engineering – Accessing the Affiliate Portal Internally
Most in-house affiliate platforms require an internal URL to access their platform. Additional resources and internal URLs will need to be created by IT and engineering to accommodate login access. This is great for branding and appearance of your affiliate program but will likely require work tickets, multiple team touchpoints, QA and follow-ups to complete – a much different process than implementing affiliate pixels. These extra steps can be problematic for tight deadlines or plans for an immediate launch.
3. Saving Data from Platform Migrations
Your technology needs to change rapidly year to year with the influx of new team members, business initiatives, experience and goals. What happens if the platform no longer fits your business needs? Whether a choice or a business requirement, unique platform migrations can be time-consuming and costly.
Your affiliate data will need to be properly exported and securely stored to avoid the risk of it losing it in the migration . If you have a particular affiliate ID naming convention and your affiliates are set up in your accounts payable system using that ID, then you either have to migrate all of your affiliate IDs to the new in-house system or update all of your accounts payable vendor information with the new affiliate ID. Loss of affiliates due to the migration process and possible new linking structure will also pose a risk to the health of the program.
While functional, in-house affiliate program platforms have nuances that come with extra costs that companies should be aware of before diving into a new program. Despite the additional time and effort they require, there are advertisers running successful in-house affiliate programs customized around their product or business model.