AD NETWORKS VS AFFILIATE NETWORKS
Ad Networks Vs. Affiliate Networks- How to spend smart on mobile
You must be confused. It’s only natural. With so many different mobile user acquisition channels, it’s hard to tell which one fits you, which can deliver the ROI you’re gunning for. Company websites and intros don’t help much, many networks differ from each other only slightly, so it’s super hard to tell the difference. Here’s a short guide to Ad networks vs. Affiliate Networks to get you started:
DEFINITIONS:
An Ad Network typically runs ads via it’s SDK (software development kit) on different traffic sources. SDK’s can be incorporated into apps or mobile web, to display ads. Ad networks include companies such as iAd, Google’s AdMob and many others.
An Affiliate Network is an aggregator of many different types of traffic. Rather than placing an SDK on it’s publishers platform, it provides all necessary tools for running campaigns (tracking links, creatives etc.) to it’s publishers who will run it on all different types of media sources: apps, mobile web, media buyers and others.
The two are similar in that both provide traffic from outside sources (referred to as publishers), but differ in what these sources are, and how they are managed. Let’s break it down:
Quality (Where to get the good stuff)- Making sure that the traffic you’re buying is worth what you’re paying, and can drive the revenue you expect is the most important factor of user acquisition. Using Ad Networks, you’ll be buying one kind of traffic. Whether banners, video or other, the network will not be able to breakdown for you what different publishers delivered, but a snapshot of all traffic together. This means, that whether traffic is good or bad, it’s all the same. Options for optimisation are limited, and you can only decide whether to move forward or pause. On the plus side, options for fraud by outside publishers are more difficult (the network controls the code and therefore it’s harder to trick), and there’s a higher certainty in terms of quality, and where the ads run.
On Affiliate Networks, you have the option of buying from many many different sources. Some publishers may be apps, others may be independent media buyers, or tech optimisers. The right affiliate network will offer a report granulating different sources, so that you will be able to point out which ones work best, and increase budgets and bids for their traffic only whilst shutting down publishers that don’t back out in ROI. This allows you to hedge your buying, not relying on one single source entirely at any time.
Payment (or Risk Management 101)- Performance! This is probably the biggest and most crucial difference between Ad networks and Affiliate networks. Ad networks traditionally work on two kinds of pricing models: CPC and CPM. So where’s all the risk? It’s on you. Not only do you have to make sure your ad is being clicked, and clicks are converting to installs, you have to make sure these users become quality paying, quality customers. When buying from an ad network, try to negotiate the payment model with the highest certainty for you, many networks are moving in this direction, so some will def. be able to make the extra effort.
Affiliate networks, take this risk on themselves! Here you can work on a cost per install (CPI) basis, and make sure that you’re only paying for people who actually download your app. The best affiliate networks, will make the deal even better. Working on a CPA (acquisition), CPL (lead) or CPD (deposit) model, will allow you to only pay for users who are completing the level of engagement or monetization you’re looking for. So where’s the risk? What risk?
Diversity- You may be looking to run different types of campaigns at the same time; An incentivized campaign for volume alongside a non incent for quality. Usually an ad network will be able to provide either one or the other, but not both. An ad network may also be stronger in some geos and not work in others. On an affiliate network, you can run different types of campaigns simultaneously, the affiliate network will channel your different campaigns to it’s sources according to what you’re looking for.
Volume- When you’re buying from a network, there’s only a finite number of installs you can procure. Raising your bid will get you more exposure, but at some point, you’ll maximise, place your ads on all publishers, and the potential will be fulfilled (you’ll be paying more for less installs!). On affiliate networks, the sky’s the limit. Because an affiliate network has thousands of publishers, you can always get more volume- just don’t forget to optimise your quality!
Technology- Whether network or affiliate, make sure you’re buying only from sources which have developed their own technology and don’t license from others. This significantly reduces the cost of the networks and allows them to deliver traffic from high quality sources which generate many views/clicks per each quality download. Providers who license their technology pay for it on a CPC basis, which will make them favour sources with a high CR, which are many times of lower quality.
In Summary- when working with an ad network you gain cohesion, and control in terms of ad placements but you take on a lot of risk, and can miss out on diversity and volume. For the best user acquisition strategy, be sure to spread your budget and closely monitor which channels are delivering users who actually engage or spend as you would like them to.
Contributed by Daphna Giniger, ClicksMob CMO
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