In-House Affiliate Marketing vs Affiliate Agencies: Which Is Right for Your Business?

Your marketing team is busy. So when the topic of a new affiliate marketing program comes up, the issue of whether you go in-house or with an agency comes with it. Affiliate marketing programs make great passive income streams, so you want to keep the maintenance as hands-off as possible. 

So, will an agency or an in-house strategy help you do it? Let’s break it down. 

What is an affiliate agency? 

An affiliate agency is a third-party marketing agency to which you can outsource the management of your affiliate marketing program. They handle all aspects of your program, from influencer recruitment to performance monitoring to payouts. 

Brands work closely with agencies to set goals and objectives, provide messaging resources, and solidify the partnership they want to establish. The agency then executes the program strategy on the brand’s behalf, adhering as much as possible to the agreed-upon objectives.

What is in-house affiliate marketing?

In-house affiliate marketing strategies refer to executing an affiliate marketing program with the internal team and without third-party resources or help. This means the organization’s marketing team is responsible for sourcing influencers, performance monitoring, payouts, resources, KPI tracking, objective setting, and more. 

When brands create programs in-house, they have complete control over their development and full visibility of the outcomes as they arise. 

Affiliate agencies: The details

The benefits

If your organization opts for an affiliate program through an agency, there are four main benefits for your business. 

• Experience without the learning curve: Outsourcing to an agency gives a business access to professionals with expertise in affiliate marketing. In addition to knowledge and tips, the agency will likely offer strategic guidance and industry insights. 
• Save time across the team: Outsourcing affiliate management to a third-party agency frees up internal time for more core marketing tasks.
• Performance-based pricing structure: Many affiliate agencies operate on a performance-based pricing model, earning a cut based on your results. This means that if you don’t do well, neither do they. 
• Network growth opportunities: Agencies often have a wide network of affiliates and influencers already open to partnering. This allows you to tap into those resources, bypass the research, and work with already high-performing influencers.

Things to consider

You should consider a few prominent drawbacks when you go with a third-party agency. 

Loss of partnership control

The biggest drawback is the overall lack of control over the program’s day-to-day operations. There’s a lack of partnership visibility and less control over partnerships, performance monitoring, and strategy building. 

Dependency on performance

The success of your program performance and the amount of revenue you generate depends directly on the effectiveness of the agency you work with. If your agency fails to deliver on results, you’re back at square one with no partnerships and lost budget.

Higher costs

The point of your affiliate program is to generate a passive revenue stream for your business. When you work with an agency, it will be a long time before it pays for itself and starts adding significant revenue to your business.

In-house affiliate marketing: The details

The benefits

If your team chooses to build an affiliate marketing program in-house, you can expect four main benefits. 

• Complete program control: Arguably, the biggest advantage of affiliate marketing in-house is the control. You can tailor your program according to your brand and goals. Changes can happen in real time, and there’s no need to wait for a middleman to take the wheel.
• A more cost-effective program: Running an in-house program eliminates the need to pay affiliate agency fees, saving your team precious time and budget. 
• More direct communication: The in-house approach brings better collaboration between your brand and the influencers you partner with. Closer relationships are often more rewarding for influencers, and in turn, they feel more motivated to sell.
• More concrete data ownership: When you run your program in-house, your business completely retains ownership of data generated for your program. Affiliate performance, customer behavior, and other valuable KPIs are for your team to analyze, digest, and action.

Things to consider

There are a few things to consider with an in-house strategy, but the areas of caution are less significant than if you were to go with an agency. 

You miss out on expertise

Because you’re doing it yourself, you don’t get the same guidance and recommendations you would if you went with an agency. In-house programs will require research and expertise, so you should plan for the knowledge ramp-up time. 

Your network is limited

Agencies unlock the potential for an extensive network of influencers ready to partner and sell for you. With an in-house strategy, you’ll have to find other means of outsourcing and finding the right affiliates for your brand. This route is doable but would be slower than if you had an agency doing the work for you. 

In-house tooling that edges out the competition

In-house affiliate marketing is made even easier with the right tooling. With tools like Simple Affiliate, Shopify stores can access comprehensive dashboards, easy KPI tracking, streamlined management, and automated payments. 

This means users get all the benefits of in-house control, data ownership, and communication with powerful insights to back it up. And the best part? It stays cost effective. The right tooling means the affiliate marketing DIY route is accessible and scalable for the future. 

TL;DR: In-house affiliate marketing is a no-brainer

Choosing an affiliate marketing strategy may seem intimidating, but it doesn’t have to be. The pros that come with affiliate agencies are time saved, tech resources, and expertise. But those benefits can also be gained with the right in-house affiliate software. 

Go with the in-house strategy and enjoy the benefits of an agency with the privacy, cost savings, and data protection of an internal team. 

Ready to get started with your in-house affiliate marketing program? Book a demo with Simple Affiliate today.