Before we start discussing these two types of platforms, it’s important to understand who the main players in affiliate marketing are:
- Affiliate Merchants – These are businesses that own the products/services they promote and they want others to help them market/advertise the products/services they offer in exchange for a small percentage of the profits from their help.
- Affiliate Marketing Publisher/Affiliate Marketer/Affiliate – These are people who are willing to promote other companies’ products and receive a small profit from their sales. The purpose of these affiliates is to create a marketing funnel.
As for affiliate programs and networks, while they do have their differences, it’s important to note that, ultimately, the goal of affiliate marketing is the same for both systems: it’s a way for merchants to reach a wider audience and sell more products, and a way for marketers to introduce those products to their audience and earn a commission.
Basically, the main difference between a direct affiliate program and an affiliate network is that an affiliate program is created directly by the company that sells the products and services, whereas an affiliate network is an independent platform operated by a third-party business that acts as an intermediary between the merchants and affiliate marketers.
That being said, let’s take a closer look at how each of these affiliate systems works, including the main pros and cons of each.
Direct Affiliate Program
An affiliate program is an online platform launched and operated directly by a business that produces or provides products or services that it wants to sell. People who are interested in becoming an affiliate marketer for a company can join the program and promote the company's products and services. In return, the affiliate marketer will receive a predetermined percentage of the profits directly related to their work.
This means that if you want to choose an affiliate program for your iGaming business, you will need to create it yourself. You can set your own terms, rules, commissions, payment types offered, etc., and research, find and contact affiliate partners on your own.
How does it work?
There are three aspects to the affiliate program:
- Product Creator - You
- Your Product Marketers – Your Affiliates
- Consumers – Your Potential Customers
Once you have created an affiliate program, when someone signs up to become an affiliate for your product, they will promote the product on your behalf to their audience, based on the marketing materials and rules you provide. Each affiliate is given a unique link and/or banner ad. Through this unique link, the company can track the source of web traffic to its website and pay the affiliate according to the agreed payment model. Common payment models include: cost per lead (CPL), cost per action (CPA), revenue share, and hybrid models.
Take the CPA online casino affiliate program as an example. Usually, casino affiliate programs charge a commission for every real money player they bring in. In other words, visitors to the affiliate program not only click on its exclusive link to enter the casino website (such as CPL), but also need to register an account at the casino and make the first deposit, thus converting into real players.
Advantages of Creating an Affiliate Program
- Cost Control – You have more control over the costs of starting your own program because there are multiple options for setting up your network. For example, you can purchase a template and integrate it into your website, or, even easier, you can sign up for a white label affiliate program. Many online gaming software providers have multi-tier affiliate systems built into the white label platform they offer, which allow you to control affiliate commission settings, view statistics for each affiliate link, pay affiliates monthly, and more. Of course, having more control over costs doesn’t mean that running your own program will be cheap, and you’ll still need to spend hundreds or even thousands of dollars to build a successful system.
- Control over creation - You are in control of the creation and operation of your project. You set your own rules, terms, commissions, payment frequency for affiliates, customer support (affiliate managers), and more. While staying competitive in the iGaming industry is undoubtedly key, at the end of the day, you are still in control.
- You keep more of the profits – Since you are not part of an existing affiliate network, you don’t have to share profits with anyone other than the affiliates. When you join a third-party affiliate network, that network also takes a cut.
- Build personal relationships with affiliates - Since you find affiliates on your own and manage your program yourself, you have a better chance of finding the best partners and building personal relationships with them, including paying higher, more competitive fees. This can increase affiliate motivation and loyalty, which can bring you more traffic and profits.
Disadvantages of Creating an Affiliate Program
- Setup takes time - Setting up your program, finding the right affiliates, and tracking it all takes time. Don't expect your program to be successful overnight. You need to build an effective network, and this process shouldn't be rushed.
- You are in control - this is a big advantage, but it can also be annoying at times. For example, if there is a problem on the front-end or back-end, you need to deal with it.
- You need to find affiliate partners - Perhaps the hardest part of running your own online casino or gambling affiliate program is that you need to find the right affiliate partners for your business. This requires research, patience, and advertising. You can't rely on the convenience of an established network that already has a large number of affiliate partners.
Affiliate Network
An affiliate network is an independent online platform that connects affiliate marketers with merchants. Essentially, it is a digital marketplace. The affiliate network acts as a liaison (middleman) between merchants and affiliate marketers registered with the network. In other words, the affiliate network sets up everything for the merchant (including setting the terms and conditions) and gives the merchant easy access to the affiliate network.
This means that if you want to join an existing affiliate network and start affiliate marketing efforts for your iGaming business, you will need to pay to register with that network and use its services. In addition to your own marketing materials, the affiliate network platform you join also provides you with everything you need to run your project.
How does it work?
There are four aspects to an affiliate network:
- Contact - Affiliate Network
- Product Creator - You
- Your Product Marketers – Your Affiliates
- Consumers – Your Potential Customers
Once you have found an attractive existing online casino affiliate network (we strongly recommend that you research the success stories of the network you are interested in), you can sign up and pay to use their services. The platform you need is already there and ready to go. All you need to do is create marketing content for your brand. This way, you will be able to reach a large number of affiliates and start implementing your affiliate marketing strategy.
Other than that, the affiliate marketing system works much the same as discussed above in the affiliate program section. Affiliates market your products and use a unique, trackable link in order to receive the commissions they are owed. However, the difference is that some affiliate networks also take a commission from the affiliate every time they make a sale. In other words, you pay two commissions: one to the affiliate and one to the affiliate network.
Advantages of Joining an Affiliate Network
- Everything is ready - The best part is that the platform and everything you need is already there and you can start using it right away. You don’t have to spend hours setting up the program and meeting all the necessary technical requirements, security, research, etc.
- Instant contact with affiliates - Another huge advantage is that there are already affiliates ready to sell. With just a few clicks, you can find the affiliates you want to work with in the network, saving you the time-consuming steps of searching for the right affiliates, sending promotional emails, etc.
- Fast and Easy – There’s no quicker or easier way to start working with affiliates.
Disadvantages of Joining an Affiliate Network
- High ongoing costs – The convenience of joining an affiliate network comes with a high price tag, and the fees are ongoing. Since all the paperwork is handled for you by the affiliate network, you will need to spend money to sign up and get set up. While fees vary from company to company, the average starting price is between $1,000 and $3,000. Other costs may include monthly fees, add-on fees, other one-time fees, and a cut of your earnings that the affiliate pays to the network every time you make a sale.
- You have to play by their rules – everything is arranged for you, but the trade-off is a loss of control. You don’t get to dictate content, terms and conditions, affiliate rules, commission rates, available payment methods, etc. Most things are decided by the affiliate network.
- Readily available affiliates are not necessarily the best affiliates - Just because you can quickly reach affiliates, it doesn't mean they are the best choice for your brand. If you have your own affiliate program, you'll be actively involved in the affiliate vetting process, making it easier to find loyal, reliable affiliates with the most ideal audiences. Don't make the mistake of thinking that instant access to affiliates on the web means instant profits.
How to choose the best solution for your business
For many businesses, weighing their affiliate program vs. affiliate network options often comes down to how much capital they have and deciding what’s more valuable to them: their time or their money.
For smaller startups, funding may not be a primary consideration, which means joining a network may simply not be possible. For those with a little more cash to work with, the desire to quickly launch a business using an existing network may be more desirable than taking the time to build a project.
That being said, it’s also crucial to consider your business’s long-term marketing goals. Keep in mind that if you successfully build your own affiliate program — either on your own or with the help of a white-label software platform — it could end up making you more money in the long run than if you continually pay affiliates fees and commissions.
There’s really no right or wrong choice, though, just the one that best suits your budget and goals.
Questions to consider before joining a direct affiliate program or an affiliate marketplace:
1. Minimum compensation amount:
This is one of the main factors you need to consider before choosing a direct affiliate program. If the minimum payout amount is higher, it may take you longer to get your first payout. However, when you sign up for a marketplace, the minimum payout amount is the sum of all other affiliate programs you promote. If you have low website traffic or low affiliate sales, it may be smarter to join an affiliate program through a marketplace than directly.
2. Ease of use of tracking system and affiliate software:
This is another important factor that you need to consider. Hostgator has one of the most popular affiliate programs, but their in-house affiliate software is nothing to be proud of.
I have written about this issue before on this blog and many affiliates have complained about the same issue. In this case, it is recommended to join the affiliate program through an affiliate marketplace rather than directly through the affiliate program.
How do I know?
I joined Hostgator 's affiliate program through ImpactRadius, and I can see that all sales records have been tracked, and there have been no refunds or invalid registrations so far. Here is a screenshot of my ImpactRadius control panel:
This is much better than the conversion rate I was previously getting with their in-house affiliate program. However, as an affiliate, rather than complaining about the software any company uses, it’s better to find the best alternative.
3. Payment method:
This is another important factor to consider since many companies still offer check payments. We live in a digital world after all, but I guess we shouldn’t complain too much when our affiliate program pays by check.
However, there are a number of issues with paying by check. In fact, sometimes you may never receive a check and then have to re-issue it. I encountered the same issue with Aweber 's affiliate program, which was surprising considering that their affiliate program is run in-house. In this case, there was nothing we could do about it, but if there were other options, signing up for an affiliate marketplace would obviously be a better choice.
Check this out – How do you get paid in affiliate marketing?
4. Single registration and transaction volume commission:
This is another very important factor that you need to consider when deciding which affiliate program to sign up for. Many affiliate programs will increase your commission based on the sales you generate.
Most of the time, this feature is only available in internal affiliate programs and not in third-party affiliate marketplaces. Tip 4 applies when you are dealing with a large volume of sales.
Bonus tip: If you generate a decent amount of sales, you can always negotiate your commission amount with your affiliate manager.
These are the main factors you should consider before making a decision.
As always, it is recommended that you draw on the experience of other affiliate marketers, and if that is not possible or sufficient, then you must trust your own judgement.
If there are other important factors that I have missed from your perspective, please let me know.
How do you decide which affiliate program to join?
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