Even for veteran online merchants (the advertisers), marketing products in the affiliate space (also referred to as performance-based marketing) is no walk in the park. Here are the top ten headaches nearly all online advertisers deal with.

Running ad campaigns (or programs) on multiple ad networks (also called affiliate networks)

Online merchants expose their products to more consumers by running ad campaigns on other websites. Ostensibly, the more publisher websites the ads run on, the more traffic they push to the merchant’s site, which increases sales. Since ad networks provide an easy way for merchants to find publishers, it makes sense that a merchant would want to join as many ad networks as possible.

However, running on multiple networks creates new problems. First, there is the extra cost of getting set up and funding an account balance on each network. Second, the merchant needs to have a way of determining which network to attribute the sale to, if traffic came from multiple networks. Third, the chance of fraud increases dramatically, especially if the merchant isn’t actively managing the campaign.

Having to use different tracking software for each network on which they run ads

Every network has its own software for tracking ad campaigns. The networks expect merchants and publishers to use the tracking numbers from its own software to determine who should receive commissions on sales. So even if a merchant has its own tracking software, it still has to log into a tracking system for every network it belongs to and pull campaign statistics from it.

Having to develop proprietary tracking software (or buy third-party software) to manage in-house campaigns

Although a merchant can use the tracking software of whatever network it joins, that only works if the merchant doesn’t run ad campaigns in-house or on multiple networks. For example, if the merchant has the same campaign running on two networks, it is possible for a single publisher to grab that ad from both networks. If the publisher refers a consumer who ends up buying on the merchant’s site, each network will attribute that single publisher with a sale. So if the merchant doesn’t have its own tracking software to police that situation, it will end up paying a double commission for a single referral.

Also, because merchants contract directly with publishers (off network) to run a campaign, those merchants will need to have their own software to track the campaign results.

Dealing with publisher and network disputes over tracking numbers

Because everyone uses the tracking statistics to know what commissions to pay, this inevitably leads to squabbling over “which” statistics to use. Publishers would prefer to use their own tracking numbers. Networks would prefer to use their own tracking numbers. And advertisers would prefer to use their own tracking numbers. Since all these numbers are rarely the same, you get a lot of back-and-forth between advertisers and publishers over how much the advertiser really owes.

Recruiting new publishers and maintaining relationships with current publishers

Having an ad campaign does an advertiser no good if the ad isn’t running anywhere. So advertisers need to constantly prospect for publishers. And just like any other sales environment, taking care of your existing business relationships is far cheaper and more productive than prospecting new relationships. So advertisers need to stay in touch with publishers that are running the ad campaigns. However, knowing that this needs to be done is not as easy as actually doing it. With all the other demands on an advertiser’s time, prospecting and relationship management often take a back seat, especially if the advertiser doesn’t have tools, such as customer relationship management (CRM) software, in place to help focus those efforts.

Dealing with parasiteware and unethical networks and publishers

Parasiteware is too complicated to delve into here (but you can go to this forum to learn all about it). Basically, there are some networks and publishers out there that use various technologies to divert search traffic that would have come directly to an advertiser’s site (so the networks and publishers get commissions they didn’t earn), that would prevent other publishers from receiving their legitimate commissions (which can create tension with the advertiser and those publishers), that would overwrite the tracking code, or would inflate tracking numbers so advertisers end up paying more than they should.

Not knowing how effective a campaign will be before it starts, and then not knowing the optimum time to discontinue a campaign that is no longer effective

Although advertisers can get a good sense of what campaigns work, they don’t have crystal balls. Since the look and content of an ad’s creative play a big role in attracting customers, a poor campaign can really hurt an advertiser. Advertisers can use analytics and persuasion consultants to help them optimize their campaigns, but that adds an extra cost to a campaign.

Having publishers refuse to join a particular ad network, or refuse to run an in-house campaign directly

Ideally, an advertiser should be able to work with any publisher it wants. Unfortunately, some publishers refuse to work with advertisers that don’t run campaigns on a specific network. If an advertiser wants to work with that publisher, but decides the benefits don’t outweigh the extra headaches of joining another network, it will have to not work with that publisher.

Having to continuously, actively manage an ad campaign

Running an ad campaign is not as simple as writing copy for the ad, designing the creative, giving it to a publisher to run, then forgetting about it. A campaign needs to be actively managed. Campaign managers need to monitor statistics to make sure the commissions they pay out are for valid leads. They need to monitor the effectiveness of the ad. They need to make changes to the campaign or creative if they aren’t getting the results they’d like.

Having to manage an ad campaign in-house as well as on affiliate networks

As a continuation of the previous point, an advertiser needs to multiply the effort of managing each campaign by the number of networks on which they run the campaigns.