Are you thinking of building (or perhaps you’re already using) your own affiliate network software? If so, it’s inevitable that you’ve pondered over whether to build or buy, and possibly if your current software meets the cut.
The advantages of buying or licensing affiliate network software is well-documented. The right solution plays a key role in enabling an affiliate network to efficiently and effectively manage, measure, and optimize affiliate campaigns, which drives more revenue opportunities.
On the other hand, some wonder about the other option — building your own in-house solution. In this blog, we’ll debunk the top three most common myths surrounding the resource requirements for building and maintaining your own affiliate network software.
3 common myths about building your own solution
- Myth #1: We’ll make back the money we spend building, over time.
- Myth #2: We have a large technical team or we are a tech company with resources to build our own solution.
- Myth #3: We can customize a solution to our exact needs.
The reality check: Weigh the resources required and benefits
Building and maintaining affiliate network software to support billions of actions and scale as your company grows is not simple. To get it right requires significant amounts of resources and expertise.
Essentially with licensing, your organization pays an annual fee for software and support that’s available via a third-party.
In contrast, software built in-house must be conceptualized, designed, developed, configured, and maintained. The reality is that many companies may not be equipped to handle the numerous moving parts associated with building an affiliate network software in-house. Below are the realities of what it takes to build your own solution.
- Requires significant infrastructure costs: When building a solution in-house, you’ll need to consider the costs of building software for data collection, cloud hosting or physical hardware, reporting, data operations, quality assurance for deployment, and ongoing care for the platform. In other words, heavy investment into an infrastructure that guarantees uptime and provides redundancies when servers go down.
While solutions often rack up significant restructuring costs as performance and functional demands grow, under a SaaS model, additional licenses and functionality can be easily added with minimal lead time. Over time, the use of software built in-house can create a loss of revenue due to the lack of scalability or essential functionality.
- Involves a lot of human capital management: Developing and managing your own solution requires significant manpower. Companies need dedicated engineers and LiveOps on staff to support your infrastructure to maintain business continuity, avoid security threats, and possible downtime. Their salaries alone can cost hundreds of thousands of dollars per year. In fact, engineering is widely considered one of the most lucrative and in-demand career choices, with salaries that can exceed $100k per year.
Employee retention is also critical, as the cost of turnover is extremely high. For technical positions, the cost of losing an employee jumps to 100-150 percent of his/her salary. It’s estimated that 33 percent of all costs due to turnover is lost to recruitment efforts, while two-thirds is intangible costs, including lost productivity and knowledge. For example, when a member of your tech team leaves, they take with them proprietary technical knowledge. This typically leaves a company scrambling to figure out how to maintain software. With affiliate marketing, it’s imperative that the technology runs smoothly to keep affiliates and publishers happy. Failing to do so can damage credibility and result in massive revenue losses very quickly.
- Increases risk of data protection fines: With any software collecting data, it’s critical to regularly audit your system to stay up to date with all regulations, as they are constantly evolving. This takes considerable amounts of resources to comply with consumer privacy changes (GDPR, CCPA, IAB TCF) and data protection.
What happens when compliance isn’t met? Along with a bad reputation, hefty fines can also be issued. For instance, GDPR fines can total up to $20 million euros or four percent of a firm’s annual global turnover.
- Takes away from focusing on a company’s core business: Those looking to build an in-house affiliate software will often say we have the internal resources and “my technology is customized to my specific needs.” Instead of focusing on building software, they should be directing that time towards their core business strategy and long-term growth. Licensing third-party affiliate software automatically equips you with industry experts and fully staffed teams to monitor, enhance, and maintain the platform. This enables you to focus on vital business strategies while your third-party provider focuses on building features based on industry trends and client needs
- Runs the risk of missing out on industry trends and innovations: Matching technology to industry innovations requires business vision and technical skills specifically related to affiliate marketing to continuously innovate and stay ahead of the industry.
Additionally, there’s the issue of obsolescence. Modern technologies come along and make older technologies obsolete and more expensive to maintain compared to newer, better, faster technology. It also becomes harder to find engineering talent familiar with knowledge about outdated tech codes.
With the progression of digitization and an ever-growing arsenal of workplace software, it can be challenging to keep track of all the available products and identify the optimal solution for your organization.
- Entails a lengthy process to go-live: If you build your own software in-house, it can take months or even years before the platform is ready to go live. There are process models in software development that allow for generating working software modules quickly, but launching a fully loaded custom software solution takes time. So if you’re planning to go build in-house, make sure you understand not only the costs involved, but also a realistic timeline before taking the leap. With your reputation and revenues at stake, it can be risky to run an affiliate program on a software that isn’t fully developed and properly tested.
On the other hand, licensed software programs enable rapid deployment. If an existing solution meets most of your needs, there may be little point to invest time and money in developing a similar version of something that is already available.
- Demands continual updates: Vast amounts of data are collected in the highly interdependent affiliate marketing world of advertisers, networks, and affiliates, and partners deploy various ways of handling consumer personally identifiable information (PII). This intricate network with huge amounts of data, plus recent advancements in consumer privacy laws, adds up to mean a serious commitment to consumer privacy is required.
Additionally, bandwidth is necessary to ensure your affiliate network system remains compatible with all of the browsers, devices, and operating systems. For example, the General Data Protection Regulation (GDPR) has resulted in a wave of changes with browsers that block both first- and third-party tracking cookies:
With these restrictions, handling the measurement of consumer interactions with marketing and advertising is getting more challenging, especially for an in-house development team. Last but not least, systems that are not maintained over time can be riddled with bugs and other stale code-related issues.
So, if you’re considering to build (or are already using) your own affiliate network software, think again. A balanced, logical assessment of what’s a myth versus reality may sway you to reconsider.
To experience the benefits of licensing affiliate network software first hand, sign up for a free 30-days trial of CAKE’S affiliate marketing software.
Other content you might be interested in:
- Blog: 6 Signs to Know You’re Using the Right Affiliate Network Software
- Blog: How to Prepare For Growth By Relying on Stable Technology
- Blog: CAKE Affiliate Marketing Success Stories