Is an Affiliate Marketing Agency the Right Investment for Your Business?

Affiliate marketing sounds like a dream come true for any business — you get others to do the heavy lifting of promoting your brand, and you only pay them when they succeed. But as you get further into the affiliate marketing industry, an important question pops up – Can I manage my affiliate marketing programs on my own, or should I hire an affiliate marketing agency? Is an agency worth the cost?

Any company that is just starting out its way in affiliate marketing faces this dilemma, especially if you don’t have experience in finding, managing and tracking affiliates. So, you’re not alone. Yet, what is the best thing to do? Let’s explore all the pros and cons of collaborating with an affiliate marketing agency and check whether you might be better served by plug-and-play affiliate or referral software. 

What Is an Affiliate Marketing Agency? 

Before we start looking at the advantages and disadvantages of working with an affiliate agency, let’s make sure we’re on the same page about what exactly an affiliate marketing agency actually is. Many businesses have rather blurry ideas about what these agencies are up to. “They help to boost affiliate marketing program results” – this will probably be one of the most common answers. But is this true? Well, yes, and also not exactly. 

Essentially, an affiliate marketing agency is a middleman between a business and affiliate marketers, but the services they provide can vary greatly, including: 

• Affiliate program launch; 
• Recruitment of affiliate marketers; 
• Onboarding; 
• Affiliate marketing program promotion; 
• Campaign optimization (optional); 
• Affiliate software licensing;
• Reports and analysis. 

Of course, not all affiliate marketing agencies are the same, and they have different policies and expertise. Some might specialize in certain industries, like fashion or tech, while others are more general. The range of services they offer will also differ. For example, one agency might focus heavily on recruitment and onboarding, while another excels in campaign optimization and data analysis via smart software solutions. Sometimes, an affiliate agency is just a part of a digital marketing agency. 

Additionally, the level of involvement an affiliate marketing agency has in your affiliate program can vary. Some agencies take a hands-on approach, managing every aspect from start to finish, while others might only assist with specific tasks, like recruitment or reporting. It’s up to you what to pick. This variability means that when choosing between affiliate marketing agencies, it’s crucial to align their strengths with your specific needs.

Pros of Working With Top Affiliate Marketing Companies

Let’s say you want to hire a team that will help you run your affiliate program. What are the advantages you can expect? 

👍 Advanced Software and Tools 

Affiliate marketing agencies often have access to high-end software and analytics platforms that can give you deeper insights into your program’s performance and online marketing goals. They can identify trends, optimize campaigns in real time, and deliver data-driven results. 

👍 Affiliate Networks 

The best affiliate marketing agencies already work with affiliate networks and can help you find affiliate partners with a good track record. You may expect them to match your company with industry leaders, but it really depends on the marketing agency; not every single one of them can offer that. Still, if they have a vast network of the right affiliates and leading publishers, you may tap into it. 

👍 Affiliate Managers 

If you hire a top affiliate marketing agency, you should expect not only ongoing optimization but also people who take care of your affiliate program on an everyday basis. Affiliate managers will resolve queries and look for areas that can be improved. Unfortunately, that’s also not a universal service, and it also depends on the quality of the affiliate marketing company you pick. 

👍 A Campaign Blueprint

Best affiliate marketing companies often have an established way to run every affiliate campaign. For some businesses, that might be quite a negative thing. Yet, overall, if you don’t have any particular requests, getting some time-proven strategies from your top affiliate agency isn’t a bad idea. 

Cons of Working With Affiliate Marketing Companies

Okay, the advantages are clear – more experience and more connections from them and less involvement from you. Yet, what about the cons? Is there anything you should be aware of before actually choosing a business model where you go for an affiliate marketing company instead of your in-house team? 

👎 Cost Considerations 

The first obstacle is the numbers. Affiliate marketing agencies don’t come cheap. You’ll be paying for their expertise, software, and time, and those costs can add up quickly, depending on how much the agency charges. For small businesses or startups, this might feel like a hefty investment that’s hard to justify. Remember – affiliate marketing should be cost-effective. This is its essence. However, if you’re spending way too much on your affiliate program management, something has to be wrong! If you’re looking for a low cost solution, try referral software as an alternative, it’s a DIY method to take the hassle out of finding, managing, tracking and even paying your affiliates! And, it means spending hundreds rather than thousands a month.

👎 Potential for Misalignment

If the affiliate marketing agency doesn’t fully get your brand or audience, its strategies might not hit the mark. Take Patagonia as an example. If an agency only sees it as a typical outdoor clothing brand, ignoring its drive for sustainability, it will miss the mark. So, if your affiliate company doesn’t align with your values, your affiliate marketing campaigns could fall flat, failing to resonate with your ideal target market.

This misalignment can lead to affiliate campaigns that don’t foster connection, costing you both time and money. That’s why a culture check is so important. Otherwise, finding an affiliate agency that actually gets you might be hard. 

👎 Dependence on External Parties

Relying heavily on affiliate marketing companies can make you dependent on their services. When someone else handles all your affiliate marketing efforts, that may not be sustainable in the long run. If they drop the ball, like a sudden staff change, or if your contract ends, you might find yourself scrambling to keep your affiliate marketing program running smoothly. 

This has unfortunately happened to many brands. The results? They had to suddenly transition from one agency to another, causing temporary disruption in their affiliate program and postponing some of their business goals. 

👎 Less Control Over the Process 

Of course, when hiring a top affiliate marketing agency, what you hope for is to get the whole affiliate thing off your shoulders. However, here is an important question you should answer – is it really the best thing to do in terms of achieving your business objectives? Think of it like handing over the keys to your brand’s identity. 

When you work with an affiliate marketing agency, you have to trust them to represent your brand accurately. Handing over the reins means you’ll have less direct control over your affiliate program. You need to ensure that the agency understands your brand and goals as deeply as you do, which isn’t always easy. How do you know if it’s a match? Here’s a quick checklist for this case scenario: 

• Make sure to convey your goals to an affiliate marketing company you hire; 
• Communicate core values; 
• Give a very clear idea of your target audience;
• Create a feedback culture; 
• Build a portrait of a perfect affiliate;
• Be a control freak. 

👎 Potential Lack of Transparency

When you have a business, you want to know every single detail that is going on with it. One of the challenges of working with an affiliate marketing agency is that you might not have full visibility into their operations.  

Affiliate marketing agencies often use proprietary software tools and methodologies, which means you might not always see the complete picture of how your affiliate program is being managed. Does this work for you? It might not be a big deal for some companies, but the issue is that this lack of transparency can make it difficult to identify areas for improvement and assess the overall effectiveness of your affiliate marketing strategy.

This is especially dangerous in the face of data security. Be sure to choose an agency that uses secure software, allowing you full control over your data.

👎 Risk of Conflicting Interests

For any agency to function and be successful, they need to get as many clients as possible. While this sounds absolutely normal, you have to consider the fact that affiliate marketing agencies often work with multiple businesses within the same industry. Is this fine for you? Well, maybe, but it isn’t for everyone. This could lead to conflicts of interest, where your program might not receive the full attention it deserves. 

In some cases, an agency might prioritize a larger or more lucrative client, which could impact the quality of service and results you get. Maybe you won’t increase affiliate sales or get the right affiliate partners just because your competitor already has that due to the collaboration with the same agency. 

👎 Slower Decision-Making Process

When you work with an external agency, decision-making can sometimes become slower due to the need for back-and-forth communication. Different companies have different communication frameworks, and they are not always fast. Even the best affiliate marketing companies might be slow to respond – they usually have their own agenda, and you’ll just have to wait. 

Unlike an in-house team, where you can quickly gather input and make decisions about your affiliate program, working with an agency often involves more approvals. This can lead to delays in implementing strategies or responding to changes in the market, potentially slowing down your overall progress.

Affiliate Marketing Agencies: Yea or Nay?

After seeing all the pros and cons of collaborating with affiliate companies, one very simple question remains: Yea or Nay? Let’s break it down. Affiliate agencies offer expertise, a dedicated team, and a potentially wider affiliate network. But let’s be realistic – they also come with a hefty price tag, often slow turnaround times, and limited control over your affiliate campaigns. That’s already a lot to compromise on.

So, our verdict is…nay. An affiliate marketing agency can be a good solution for some – there is no doubt. However, there are other alternatives that come at a fraction of the cost of hiring an agency and make your affiliate marketing a no-brainer. What is this magic pill? No code, plug and play affiliate software!

With proper software, you pay for what you need without the ongoing fees that affiliate marketing agencies charge. Plus, most affiliate software is priced to scale with your business, so you can start small and expand as your program grows – without the worry of unexpected costs.

Remember, hiring an affiliate marketing company means delegating tasks that you or your team could handle on your own. And if you choose an intuitive affiliate tool, you will speed up every single process of your affiliate management. So, if your goal is to run an affiliate program effectively and easily, make sure you consider your options.

Why Affiliate Software Is the Best Alternative

What if we tell you that you have a powerful tool at your fingertips that can do everything a partnership marketing agency can, but without the hefty price tag? Sounds like a dream, right? Well, it’s not. It’s a reality if you choose to work with comprehensive affiliate marketing software. 

Using affiliate software is pretty much like having your own personal online marketing team on demand. Literally, it handles everything from creating affiliate campaigns to tracking affiliate sales and paying commissions. As a result, you don’t need to hire someone else to take care of this for you. 

Do you have questions or doubts? Don’t worry – you can ask a support team to help you (for free). No more playing phone tag with account managers or waiting weeks for reports on your affiliate campaigns.

Now, there is one more thing to keep in mind. Take a look at the next picture:

This is how affiliate marketing works. As you can see, it is quite simple. If it is done well, it works all by itself. When you look at it from this perspective, a simple question arises – Where do the affiliate marketing agencies fit in this cycle? Today, brands need innovative tools to streamline all the processes, but do they need another team to help them out with an already cost-effective online marketing technique? After all, any top affiliate agency charges a lot, especially compared to the price of affiliate software. 

The main idea to sleep on is very easy – even the top affiliate marketing companies use… affiliate software. Yes, that’s right. The same software that you can use all by yourself, without external affiliate marketing services. Still, why is an affiliate tool such a great solution?

1. Spend less. First of all, you can get all the revenue generated from your affiliate marketing campaign without spending anything on a separate party doing the work you could have done as well! 
2. Get almost immediate support. Secondly, the software often comes with support. So, if you have any questions or doubts, you can get all the answers almost immediately. For example, with Referral Factory, you will have easy access to our support team, help guides, and video tutorials. 
3. Customize your programs all you like. Thirdly, customization is vital. Affiliate software allows you to tailor every aspect of your affiliate program to fit your unique business needs. Whether it’s setting specific commission structures, choosing the right affiliate partners, or creating personalized digital marketing materials, the software gives you the flexibility to launch a program that aligns perfectly with your goals. You’re not locked into a one-size-fits-all approach, which is often the case with affiliate marketing services that sometimes use the same marketing techniques for different clients.
4. Get the same results achieved by you. Often, businesses expect affiliate marketing companies to bring in content creators who deliver more engaging content, better pay-per-lead value, higher website traffic, or more effective online marketing efforts. While it can be true, these results aren’t only limited to affiliate marketing services. You can achieve it all in-house with good affiliate tracking software. 
5. Be in charge. Finally, affiliate software empowers you to be the captain of your partnership marketing ship. You decide on your affiliate marketing strategy, set the budget, and analyze the results. So, why pay for a middleman when you can do it yourself and keep more of the profits from your affiliate sales? Affiliate software is not just cost-effective; it’s also empowering. You have complete control over your affiliate program from start to finish. You can experiment, learn, and grow at your own pace.

How to Create an Affiliate Campaign With Affiliate Software

By now, you’re probably wondering, is it really THAT easy to launch an affiliate program by yourself? Yes! Let’s see how this works in practice.

#1 Find Your Perfect Tool

First things first, if you want to make your affiliate marketing process easy, you have to choose a comprehensive, all-in-one affiliate marketing tool. What aspects should you pay attention to? Usability, pricing policy, scalability, template variety, and integrations with the tools you already use – just to name a few. 

At Referral Factory, we strive to create an easy-to-use solution that seamlessly integrates with your CRMs and other third-party tools.

In addition, opt for affiliate marketing software that uses an affiliate link as their go-to solution for all the campaigns. While coupon codes might work as well, they are harder to use, prone to errors, and carry less information than an affiliate link, which makes tracking more challenging.

Apart from the basic functionality, pay attention to those little add-ons different affiliate marketing software has to offer. It can be anything from a personal manager to a free affiliate marketplace where you can introduce your program to potential affiliate partners. The latter almost opens a whole new affiliate network for you. 

You get access to thousands of social media influencers and affiliate marketers looking for collaboration. Hands down, this is one of the easiest ways to build affiliate partnerships. That’s why a marketplace like this can be a great addition to your affiliate marketing strategy that helps you recruit affiliates while doing nothing (literally).

#2 Create Your Very First Affiliate Program

Now that you know what affiliate tool you want to use, start building your campaign. In Referral Factory, we have a straightforward dashboard that helps you jump-start even if you have zero experience in partnership marketing. And if something is still unclear, our team will help you out.

#3 Pick the Template or Create Your Campaign From Scratch

If you’re a beginner in partnership marketing, pick a tool with a wide selection of templates. This will help you save your time, experiment more, and get a clear vision of how to create a functioning campaign. At Referral Factory, we’ve created hundreds of templates in diverse niches. You can easily navigate through our library by applying relevant filters.

#4 Define the Rules and Requirements for Your Affiliate Campaign

The next step is to define the essence of your affiliate program – the rules. You can easily set them up in Campaign Builder. Have different target audiences or requirements? No problem – with Referral Factory, you can create multiple campaigns simultaneously.

#5 Set Up Your Integrations

Transferring data manually is a pain – no one will deny this. However, you don’t have to worry about this if your affiliate marketing tool has multiple integrations you can set up. 

#6 Promote Your Affiliate Program

The last step is promotion. Our best recommendation? Use all the channels you have at your disposal, whether those are content marketing and search engine optimization or social media marketing and pop-ups.

And that’s it! Easy, huh? Do you really need somebody else to handle your own affiliate marketing program when you can do everything this easily? 

When Hiring an Agency for Your Affiliate Marketing Program Is a Good Idea? 

Whatever you do remember – if you’re new to the affiliate marketing industry, it doesn’t mean you need to find some third-party affiliate marketing services immediately. Take your time to explore the possibilities. As we mentioned before, you can use affiliate marketing software (if it is all-encompassing) and harvest fantastic results. 

However, running an affiliate program isn’t a one-size-fits-all process, and there are times when you might need a little extra help. Again, this could be the customer support team of your affiliate marketing software. For example, Referral Factory helps not only with affiliate program setup but also can walk you through every single step on the way to achieving your goals. Still, here are some scenarios when collaborating with top affiliate marketing companies might actually be a good idea:

You’re Entering New Markets

Expanding into new markets can be challenging, especially when you’re unfamiliar with the landscape. That’s why it’s important to take time to research the area and find someone who can guide you through this process. It can be anyone from a regional advisor to a local digital marketing agency. But be prepared that you may need help navigating different cultures, regulations, and even affiliate networks.

You Need Expert Affiliate Marketing Strategy and Insights

If you feel like you want to bring your current affiliate marketing program to a new level, you might want to get someone’s expert view to help you navigate through the process. In this case, an affiliate marketing company can analyze your current affiliate strategy, identify areas for improvement, and implement proven digital marketing techniques to boost your program’s performance. With their experience, you can avoid common pitfalls and capitalize on opportunities that you might not have considered before.

You’re Dealing With Complex Compliance Issues

Navigating the legal and regulatory aspects of affiliate marketing can be tricky, especially if you’re operating in multiple regions. Top affiliate marketing companies with experience in compliance can ensure that your program adheres to all necessary regulations. This is how you can protect your business from potential fines or litigations. They’ll keep you up-to-date with the latest changes in the law, so you don’t have to worry about keeping track of it all.

Conclusion

No matter what your affiliate marketing strategy is – you can achieve it with proper affiliate marketing software. You can boost your brand visibility and website traffic and reach your business goals with just a dashboard that gives you an opportunity to adjust every aspect of your affiliate marketing strategy and each campaign. 

If you think about it, it’s future-proof. Affiliate software is constantly evolving, with regular updates and new features being added to keep up with affiliate marketing industry trends. When you invest in an affiliate tool, you’re not just buying software – you’re investing in a platform that will grow with you and adapt to your needs over time. This long-term scalability ensures that your affiliate program remains cutting-edge, even as your business scales.

Choose the approach that gives you full control over your affiliate marketing campaigns, affiliate partnerships, and client satisfaction.

FAQ

What Is an Affiliate Marketing Agency?

An affiliate marketing agency is a company that is helping businesses manage their affiliate programs. They handle everything from recruiting affiliate partners to tracking performance, managing relationships, and ensuring timely payments.

How Much Does an Affiliate Marketing Agency Cost?

The cost varies greatly depending on the agency, your type of collaboration, the size of your business, your location, etc. Typically, affiliate marketing agencies charge 15-30% of the affiliate revenue generated. Alternatively, you can agree on a flat-rate package typically ranging anywhere from $1,000 to $10,000 per month.

Should I Use Affiliate Marketing Software or Hire an Affiliate Marketing Agency?

Even if you’re not exactly tech-savvy but prefer having full control over your affiliate program, affiliate marketing software might be the better option. Affiliate tools give you all the resources you need to manage your program independently at a lower cost than hiring an agency. Plus, with the right software, you can easily scale your efforts as your affiliate program grows. 

Most affiliate marketing software is very easy to use without training. For example, Referral Factory offers a very intuitive and understandable affiliate management dashboard to control every single aspect of your affiliate marketing campaigns. 

What Are the Benefits of Using Affiliate Marketing Software Over an Agency?

Using affiliate marketing software offers several perks:

• Cost-effective: Affiliate marketing software is typically more affordable than an agency, especially for small to mid-sized businesses.
• Control: You get full control over your affiliate marketing program, from recruitment to payout structures, and you can change it in no time.
• Customization: Software allows you to tailor your program to fit your specific needs and goals and tweak it whenever needed. 
• Real-time tracking: Most software solutions offer real-time analytics, so you can quickly see what’s working and adjust without any additional communication with an affiliate marketing company. 
• Time-saving: You don’t need to waste time negotiating the details of your affiliate marketing strategy or debating what should or shouldn’t be changed.

What’s an Alternative to Hiring an Affiliate Marketing Agency?

The most popular alternative to hiring an affiliate marketing agency is using affiliate marketing software. These platforms offer a DIY approach, giving you all the tools to manage your own affiliate program. 

Many businesses find that the flexibility and lower cost of affiliate marketing software make it a much more attractive option than an agency. One good option is Referral Factory, which offers a comprehensive solution for managing your affiliate marketing campaign efficiently.

Is Affiliate Marketing Software Difficult to Use?

Not at all! Most affiliate marketing software is designed to be user-friendly, even if you’re not a tech expert. They often come with help guides, tutorials, 24/7 support, and easy-to-navigate dashboards that simplify the affiliate management process.

Can I Scale My Affiliate Program With Affiliate Software?

Absolutely. One of the biggest advantages of using affiliate software is its scalability. Whether you’re starting small or looking to expand, the right tool can grow with you, offering features that support larger affiliate networks as your program evolves.

Will I Miss Out on Anything by Not Hiring an Affiliate Marketing Agency?

Even though affiliate marketing agencies offer convenience and expertise, the flexibility, control, and cost savings you get with affiliate software are hard to beat. With the right tools and a bit of know-how, managing your affiliate marketing program can be both efficient and easy without the need for an agency.