In-House vs Outsourced Affiliate Management: 3 Comparisons

Posted on10 CommentsCategoriesAffiliate Program Management

Up until this year I haven’t seen much quality material put together on this subject; and I’m glad to see more good content being put together as time goes. Today I’d like to draw your attention to three such comparisons of the two ways to manage your affiliate program.

1.

Last year, as I was working on my Affiliate Program Management: An Hour a Day, in chapter five I weighed in-house versus outsourced affiliate management options, boiling things down to this table:

I also then summarized:

…to some degree, your decision on the program management route will be conditioned by the size and structure of your company, as well as its strategic environment. The primary benefits of hiring an OPM include the experience, expertise, and connections that a good OPM brings to the table right away. Among other obvious benefits, you may also mention avoidance of health/401k benefit expenses, office space, computer costs, and training expenses. The ostensible disadvantage is a looser accountability, but with a properly worded contract, you can define the types and frequency of the reports you want to get from your OPM. Generally, however, outsourcing the management of your affiliate program leads to better price-quality inferences.

To add to the above, earlier this year I blogged about the difference in compensation that OPMs receive versus their in-house-based colleagues.

2.

Then in Spring at the inaugural Affiliate Management Days conference, a colleague (and yes, a competitor, as she also runs an outsourced affiliate management company as myself) and good friend, Karen Garcia did a presentation in which she outlined the “Pros and Cons of In-house and Outsourced Affiliate Program Management.” Another colleague of ours, Jared Sauders (who manages Jenson USA‘s affiliate program; yes, in-house!) live-blogged from Karen’s AM Days’ session, and you may find his stellar coverage of it here on Small Business Trends.

3.

Finally, five days ago, another competitor of ours, Consorte Marketing (who, apparently, also offers affiliate program management as a service) has put together an excellent infographic on the topic, to which I’d like to draw your attention as well:

The large/original version of it may be found here.

No, things aren’t as simple as: outsource your affiliate program’s management, and you’ll be better off! Much will depend on the structure and size of your company, its goals and objectives for the affiliate program, the resources it is willing to allocate to the development of the program, and many other situational variables. But the above three comparisons should help you steer your marketing in the right direction.

10 thoughts on “In-House vs Outsourced Affiliate Management: 3 Comparisons

    1. Ah, good one, Olga! I went this exact route, but things were a bit different for me than for most in-house AMs out there, because I owned the business I was an AM for. Seeing my successes in managing my own affiliate program, other merchants started approaching me to manage theirs; and with time it made more sense to sell my own online store, and go OPM. I’m sure this isn’t a “standard” route. However, regardless of this, one can learn some things from my story.

      1. AMWSO started the same way. I was working on Mondera when we started getting approached from other firms to run their programs, we’d never even thought about it at the time and OPMs as a business model didn’t really exist, but we said yes…and haven’t looked back 🙂

    1. From what I’ve seen with other AMs turning OPMs (and the other way around too, actually!) the undergirding basis has often been very similar to mine: you achieve something impressive (either as an AM, or an OPM), and either your current company (whether it is a merchant, or an OPM agency – doesn’t matter) pays you more, or you find (or are often offered) a better scenario.

  1. Hi Geno,

    Great minds think alike! I was just starting to write a series of posts with my own thoughts on this very subject. All of those posts you highlight above and yourself make some really great points. For me, although perhaps I’m biased, it’s really difficult to come up with really strong reasons to go in-house other than just a stance on control and general principled avoidance to outsourcing.

    Dave

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