Affiliate Marketing: Outsourcing (OPMs) is More Cost Effective Than Hiring In-House

According to Shawn Collin's Affstat Report the average salary for an in-house manager is $50,000 a year and up. Now, factor in health and other benefits, desk space, infrastructure, those costs rise significantly. To support an in-house affiliate manager, a business must plan to spend at least $70,000 - $90,000 in overhead. If the in-house manager decides to leave the company, all of the knowledge and the relationship history usually walks out the door with the manager.

Additionally, it may be difficult to find an experienced affiliate manager within a specific geographical area. Some larger organizations leave the affiliate program in the care of a junior level marketing staffer. This can be a mistake with lasting consequences. A well run affiliate program can be responsible for 10-20% or more of overall company revenue. Likewise, with the advantages of added revenue and reach, there are dangers in not carefully managing an affiliate program. Brand messages may be damaged and revenue from other channels pillaged via malware and parasiteware.

Most OPM firms charge either a flat fee plus revenue share, or at least a monthly minimum revenue share. Generally the monthly minimum of flat fee is between $2000-$5000 a month.

Now also consider the other benefits an OPM brings: experience, relationships, knowledge, and stability. An OPM has established working relationships with many if not all of the top performing affiliates. They've built a history of performance, and generally an affiliate will know the style of any certain OPM such as does the OPM have a stance against parasiteware, or are they accessible?

In relation to the experience benefits, the cost savings strongly favor an advantage to outsourcing an affiliate program. Focus on the business, do what you do best, and leave the success and growth of a well-managed experience program to experts who are focused on growing your business.

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OPM Firms as a stabilizing force..

The thought of "Corporate Stability via OPM Firms" had never crossed my mind, but the other day one of the AMWSO team came to me and said: "My contact at the clients end is leaving for a new job, he introduced me to his replacement last night, 4th one in three years."

And that's when it struck me: I looked over all our corporate clients and sure enough, every one has had at least three changes in staff and management in the time we've worked with them! So that's three chances for:

• Knowledge to be lost.
• Down-time for training up new staff.
• Lost continuity with affiliates.
• Lost contacts and relationships.
  
• And more I am sure.
  

I never really saw OPMs as a "stability" factor in large firms before, but looking at their high turn over rate of staff, it becomes obvious that many firms rely on their outsourced partners (of any kind really) for stability, just as much as they do for their professional skills. An OPM firm can provide continuity in the area of expertise, like for example, AMWSO does for the affiliate channel. It’s a very solid value-add factor which I hadn’t really thought about until now.

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