Affiliate Software vs. Affiliate Program: What’s The Difference?

An affiliate program is a revenue-sharing arrangement in which a marketer gets paid for driving sales and revenue for a merchant he collaborates with. Running an affiliate program poses a set of technological challenges to the merchants as they need to manage affiliate memberships, track sales, and pay affiliate commissions to the marketers they are partnered with.

Affiliate program management can be simplified by affiliate software applications that are developed by independent software vendors. However, a lot of people, especially entry-level affiliate marketers fail to understand the basic difference between an affiliate program and an affiliate software application.

In case you are not sure what purposes an affiliate software application serves, an affiliate software is designed for tracking as well as reporting commissionable actions such as clicks, registrations, and sales, which helps a merchant to reward and manage their affiliate partners.

An affiliate marketing program follows a performance-based marketing model. Affiliate compensation is entirely dependent on performance measures in the form of clicks, registrations, and sales. Therefore, a program is a model or an arrangement and a software application provides the required tracking mechanism for running the program.

Here, we have spelled out the difference between affiliate software and affiliate programs. Read more to have a detailed understanding of the differences between an affiliate software and an affiliate program.

What Is Affiliate Software?

An affiliate software or affiliate program software is a kind of web-based software (software that requires an internet connection and/or a web browser to run) that is used for setting up an affiliate program. Merchants can manage affiliates, track sales, and pay commissions by integrating an affiliate software application.

Many merchants prefer to join the third-party affiliate marketplaces or affiliate networks to collaborate with and manage affiliate partners.

Those who opt out of affiliate networks use an affiliate software application to run their affiliate programs. These software applications provide merchants with an admin panel which they can use to manage their programs. Usually, merchants employ in-house affiliate managers who are familiar with how the tracking mechanism works.

The relevant skills and experience of these affiliate managers come handy for merchants while setting up as well as managing their affiliate programs. In order to get the license of an affiliate software application, a merchant needs to pay a fee. However, they don’t need to shell out any separate transaction fee per sale, nor they need to pay anything for getting affiliate marketers onboard.

What Is Affiliate Program?

An affiliate program is based on a revenue-sharing agreement where the participating websites (affiliate websites or publisher websites) are rewarded by the sponsoring websites (or merchant website) for sending leads, referrals, and sales their way.

In most cases, the reward that a participating website receives is either a percentage of the sales revenue or a fixed dollar amount paid by the merchant per sale, per click or per completed action (e.g. referred customer filling out an email capture form). This reward is known as the affiliate commission. This is what makes an affiliate program a conditional revenue sharing arrangement. An affiliate receives commissions when a particular action is taken by their referrals.

The general actions that trigger a commission include form submission and product purchase. The commission model for form submission is known as the CPL commission model, whereas the commission for a qualified purchase is known as CPA or Revenue Share commission models. Merchants who want to run affiliate campaigns can either sign up for any one of the affiliate networks or invest in affiliate software applications to run and manage their affiliate programs.

Final Thoughts

For merchants, affiliate software is a more budget-friendly option compared to an affiliate network. This is because they can purchase these software-based affiliate tracking solutions for a fixed one-time fee. Even if they are leasing software applications, the monthly costs are quite predictable. However, merchants are often charged by affiliate networks not just for joining, but also for each transaction. There are many other small fees that can ramp up the cost of running an affiliate program through an affiliate network.

As an affiliate marketer, should you be concerned about these cost benefits? There’s a reason why merchants often pay hefty fees to the affiliate networks to get their programs listed. The world-class tracking mechanism these networks provide is truly unparalleled and the merchants do not need to worry about affiliate mismanagement or inaccurate tracking.

They don’t need to have an in-house affiliate team to run their programs. As an affiliate marketer, you can enjoy accurate tracking and reporting and timely payments if you join the affiliate networks as a publisher. This is because the networks safeguard the interests of both the merchants and the publishers in many different ways.

On the other hand, if you join an in-house affiliate program which is powered by an affiliate software, such as Ninja Outreach affiliate program or Perfect Privacy affiliate program, you can enjoy dedicated support and super-customized creatives as the in-house programs are managed by affiliate teams of these merchants who are more marketer-facing than the large affiliate networks, which is quite natural.