Comments:
I would only say that there are companies who have tried to turn affiliate software into a commodity—many shopping cart systems and even most web analytics platforms have an “affiliate tracking” element built in. There’s not much going on there other than click tracking and a report of sales driven through those clicks. If you actually try to run an affiliate program using that as your software you will certainly fail.
Conversely, web analytics software may be the most commoditized online software ever. Those companies know that, and their pitch has changed over the years from how many reports they can offer to how they can help you track advertising channels effectively. They are all acquiring smaller companies that specialize in specific channels (WebTrends acquired a PPC management company last week), in an effort to be the all-in-one solution you describe. The question when it comes to affiliate marketing is can they build a network of affiliates and/or software to effectively manage them (short answer—No) or are they better off simply acquiring one of the current players?
Hi, Jeff…
You say:
“If you actually try to run an affiliate program using that (a tracking pixel and basic reporting tool) as your software you will certainly fail.”
Can you please explain why this would be the case if a marketer were to have affiliates in-hand or accessible to them outside of needing a network? Again, IMO this all comes back to the issue of turning to affiliate *networks* for affiliates first, technology second.
I’m a bit surprised you would say that a tech only solution would fail… given that Kowabunga’s business (prior to Kolimbo) has been giving advertisers basic pixel tracking and reporting (no access to a network of affiliates).
I think you’re suggesting that an advertiser cannot use something that integrates as part of a shop cart (and succeed) without really getting into the nitty gritty of that solution nor the “where to get the affiliate” issue.
What I meant was that modern affiliate management software is not just about tracking clicks and sales—even our first software 8 years ago did a lot more than that. It wouldn’t make sense for me to list here all the features modern affiliate software has, but I will say that one kind of software allows you to manage an effective program and the commodity-level stuff does not. We’re on our 9th version of the software because there are new features that need to be added each year, and very few of them are considered bell & whistle stuff.
Before Kolimbo we specialized in custom software for the most part and did not have a network of affiliates, but as you can imagine there were some good reasons to create an affiliate network, especially one that allowed full transparency into the affiliate channel.
Overall to run an effective affiliate program you need modern software and a network of affiliates. You can certainly put your offer into a CPA network instead and let them push anonymous traffic to your site, but that is a far different thing. If you are trying to argue that non-affiliate tracking companies could eat CJ’s lunch, I would only agree if you are talking about this type of traffic where the affiliate relationship is hidden. And even in those cases the company pushing that traffic would need to have managers and recruiters on their end to keep the network healthy. It will never be as scalable as CPM/Ad Networks or PPC management (which is turning into a commodity itself with modern software); it will always be a bit messy and will need great software and human management.