Programmatic DSPs Vs. Affiliate Networks

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10 July 2023

In 2022, the statistics revealed that mobile devices dominated video ad spending in the United States, accounting for 70.8%, while desktop and connected TV collectively captured 29.2%. Programmatic and display network advertising are essential components of any digital marketing plan. The critical inquiry lies in determining the optimal timing, placement, and approach for utilizing each method to enhance return on investment and achieve optimal outcomes in online advertising.

 

Understanding Affiliate Network Technology

The affiliate network is a technology that connects advertisers and publishers, enabling them to collaborate on promoting products or services. In this setup, advertisers provide affiliate programs, offering commissions or rewards to publishers for driving traffic or generating sales. The technology facilitates the tracking and managing of affiliate activities, including clicks, conversions, and payouts.

Affiliate network technology typically involves tracking cookies, unique affiliate links, and reporting tools to attribute and measure performance accurately. These networks provide a centralized platform where brands can manage their affiliate programs, monitor campaign performance, and track conversions. On the other hand, publishers can access various affiliate programs and promotional assets, making monetizing their online presence easier.

Some popular examples of affiliate network technology platforms include CJ Affiliate, ShareASale, Amazon Associates, and Rakuten Affiliate Network.

 

Understanding Programmatic DSP

A programmatic DSP is a technology that connects brands and publishers to place ads online. It finds the best ad spaces and prices for them through quick auctions. This means brands can choose high-quality and relevant ads from millions of options. It’s a precise, scalable, customizable, and efficient way to advertise online. Programmatic DSPs provide access to various ad inventory across digital channels, such as display, video, mobile, and connected TV.¬†

DSPs play a crucial role in programmatic advertising by providing advertisers with the tools and capabilities to target specific audiences, set bidding parameters, and manage their ad campaigns. They offer automation, targeting, and optimization features to enhance the cost efficiency and effectiveness of ad buying.

 

Combating Ad Fraud

Ad fraud is growing in scale and sophistication, making the entire ecosystem unreliable. Programmatic DSPs have developed practical tools to detect and eliminate fraud, using algorithms that identify anomalies and respond quickly. DSPs offer transparency, allowing you to differentiate between legitimate and deceptive results sources. Programmatic DSPs actively combat fraud before and after bidding, ensuring effective utilization of your ad budgets. At DecenterAds, our commitment lies in fostering a programmatic environment that is both transparent and secure. To achieve this, we collaborated with Pixalate, a trusted partner renowned for its fraud protection, privacy, and compliance analytics expertise. By leveraging Pixalate’s advanced services, we ensure thorough inventory verification and powerful protection against bots. We also have an in-house moderation department that helps to ensure complete control over ad fraud.

Affiliate networks are popular due to their cost-effectiveness, but some significant considerations exist. Becoming a part of an affiliate is easy, and their commission depends on their performance. However, there needs to be more transparency regarding impression data, click data, and other metrics. Affiliates can also re-broker offers to other affiliates, creating a chain of re-brokering. Consequently, affiliate networks are more vulnerable to ad frauds, such as click spamming and click injection, without effective countermeasures.

Fighting for Brand Safety

Programmatic DSPs enable precise tracking of ad placements, providing detailed insights at the site, publisher, and sub-publisher levels. This allows brands to blacklist unsafe environments and whitelist sources that enhance their image.

In contrast, affiliate networks need more visibility into affiliates’ ad inventories, leading to widespread re-brokering and a lack of access to impression-level data. This poses a significant risk to your brand reputation and results in a wasted budget on unsafe inventories.

 

Ensuring Quality and Inventory Pricing

Programmatic DSPs offer extensive connectivity with multiple ad exchanges, providing a wide range of ad inventories at a large scale. For instance, if you specifically seek video campaigns, DSPs can target ad exchanges with high-quality video ads. Real-time bidding is the driving force behind programmatic advertising, and DSPs continuously optimize this process. You pay based on pricing models such as CPM or, much less commonly, CPC, determined by real-time bidding that reflects the value of each impression.

In contrast, affiliate networks utilize various pricing models like CPA, CPC+CPL, CPL+CPS, and more. These models are performance-driven, meaning the network earns more by generating higher revenue for advertisers. Due to this incentivization structure, some affiliates or affiliate networks may create an illusion of “performance” to maximize their interests.

 

Summary

Selecting the right approach to maximize marketing investments and effectively manage risk is crucial. This approach guarantees that you optimize the effectiveness of money spent on customer acquisition and retention. Establishing robust business controls is essential in the ever-changing AdTech space, aligning monetization and marketing strategies with current digital marketing practices.

Optimizing and achieving success with affiliate link revenue in digital advertising can be challenging. In contrast, programmatic advertising revenue is relatively easier for most publishers to handle. While starting is easy, publishers must dedicate time to optimizing platforms, partnerships, and experiments, depending on their willingness. Incorporating programmatic advertising helps maintain a healthy monthly revenue stream for the business. 

 

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