Public vs. Private Affiliate Programs

By , November 2, 2007
  1. Should your affiliate program be public or private?
    • Public: Most affiliate programs are “public,” so that any member of the general public can learn about the merchant’s affiliate program (by using a link on the merchant’s site, by viewing a list of merchants on an affiliate network, or by finding a listing for the merchant in an “affiliate directory” site).
    • Private: However, several thousand merchants offer “private” or “secret” affiliate programs, which are available by “invitation only.”
    • SemiPrivate: Some merchants offer affiliate programs which are “public” in that they can be found in affiliate directories and through the affiliate-network’s listings, but not through any link on the merchant’s own web site.
  2. Benefits of Private Program:
    1. By keeping the affiliate program a “secret,” the merchant discourages applications from “unknown or unwanted” affiliates. Since reviewing applications and managing affiliates can sometimes be time-consuming, this option is appropriate if a merchant isn’t willing to commit the resources (staff time) needed to run a public affiliate program.
    2. Affiliates invited to join a “private” affiliate program may feel “special,” and might even believe that they are “the only one” to be offered commissions.
    3. If the merchant decides to end the affiliate program, there is less risk of public embarrassment or discontent, if the program was never public.
    4. A private affiliate program prevents most current sources of “free” referrals from enrolling in the affiliate program, unless they are specifically invited. A “semi-private” affiliate program would reduce the number of current referral sources who might discover the affiliate program’s existence.
    5. A private affiliate program is much less likely to draw “parasitic” or other unscrupulous affiliates, who may draw commissions from transactions where the consumer never visited an affiliate web site (even transactions where the consumer manually typed the merchant’s URL into their web browser). A “semi-private” program provides virtually no protection against such “parasites.”
    6. Most “affiliate networks” publish aggregate data about each merchant’s performance within the network, often including such information as “average transaction size,” “average commission paid,” and “EPC” (earnings per 100 clicks from affiliate sites). A “private” program restricts the distribution of this data.
  3. Drawbacks of a Private Affiliate Program:
    1. Although 90% of successful affiliates will always come from direct recruitment (and not from the “network” or from “affiliate directories”), a private affiliate program can only draw new affiliates from direct invitations. In addition to eliminating a huge number of potential affiliates whose value is unclear, a private program will also exclude prospective “high-value” affiliates who search diligently for the phrase “affiliate programs” combined with phrases that describe your products or industry.
    2. If an affiliate program is private, some “invited” affiliates may wonder about the legitimacy of the program and the merchant’s commitment to continuing the program.
    3. Secrets are hard to keep. Even if invitations are extended only to a few key prospects, any of them might mention the program to others, so that “word could get out.”
    4. If an existing referral source or other “prospective affiliate” learns that others were invited to participate in the affiliate program but they were not, they might be offended and cease referring business to the merchant.
    5. If a “private” program is launched using a “public” affiliate technology provider (an “affiliate network”) then the merchant is paying fees for “network” features (such as being featured in the network directory and in promotional emails) but does not receive those benefits.
    6. Maintenance of a “private” or “semi-private” affiliate program will require some “extra effort” to protect the secret (for example, blocking robots from spidering the affiliate-information or affiliate-enrollment pages on the site).
  4. Alternative: Separate Company or Brand
    • As you are surely aware, there are a number of merchants who offer products or services under multiple domains or “brands,” sometimes without identifying the parent company; in some cases, each company may offer different pricing and service levels.
    • If you use this strategy, it might be possible to launch a separate company division which would have an affiliate program, while your “main business” would not offer an affiliate program. (Alternatively, your “main business” might have an affiliate program, but you might operate another subsidiary which has lower pricing but no affiliate program.)
    • Of course, if the parent company were not identified, the program could not benefit from your “branding” and reputation.
    • One “benefit” of using a separate domain would be the possibility of offering “online ordering only” (if your firm normally accepts phone orders) and possibly different pricing (higher prices might leave more room for a high affiliate payout; lower prices might enable more online sales).

  1. Issues That Might Lead a Merchant to NOT Offer a Public Affiliate Program (Negatives)
  2. Public vs. Private Affiliate Programs
  3. What Factors Do Publishers (Affiliates) Consider When Selecting Advertisers (Merchants)?
  4. Affiliate Technology & Network Choice
  5. My Usual Recommendations (for Merchants planning an affiliate program)
  6. Affiliate Recruitment Strategies and Practices
  7. Captive and Stealth Affiliates
  8. Affiliate Program Policies
  9. Outsourced Program Management (OPM) for Affiliate Programs
  10. Selling the Affiliate Program
  11. Types of Affiliates (Web Publishers)

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