Affiliate Network and Ad Network: What’s the Difference?

Do you have trouble differentiating between an affiliate network and an ad network? Well, you have landed at the right place.

In the present time, affiliate marketing has gained a lot of momentum across the world; India is no exception. Affiliate marketing India has led to the growth and expansion of many online businesses like Amazon, eBay, Flipkart, Myntra etc and it is showing signs of slowing down.

Before we talk about differences between the two, it is important to know the true meanings of both the networks.

An affiliate network is a third party acting as a link between publishers (affiliates) and merchant affiliate programs, allowing the publisher to find and join affiliate programs.

An advertising network, commonly known as an ad network, is an intermediary company that connects an advertiser to the website that is interested in hosting advertisements.

Although the basic function of both the networks is the same, there are still some differences between the two. These differences predominantly exist in the way they work with their publishers and advertisers.

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Differences Between Affiliate Network and Ad Network

• Affiliate networks work on a CPA (cost per acquisition) model which could be  CPI (cost per install), CPL (cost per lead), or CPD (cost per day). This is why these are also called performance networks whereas, ad networks work on either CPM (cost per thousand) model or CPC (cost per click) model only.
• In an affiliate network, an affiliate has the power to choose which advertiser he wants to promote on his website whereas, in an ad network, a publisher does not enjoy the right to choose the ad running on their website.
• In case of an affiliate network, the advertiser knows where the ad is being run or which affiliate is running the ad whereas, in an ad network, the advertisers do not know where the actual ads are running.
• Affiliates are not required to have any website as in case of email marketing affiliates whereas, the publishers are required to have a functional website in order to successfully carry out the activities with an ad network.
• In an affiliate network, the types of affiliates include coupon websites, media buying affiliates, niche websites, comparison websites, cashback affiliates, etc. In an ad network, the types of affiliates are news websites, blogs, download websites, high traffic websites, tech websites, etc.
• In an affiliate network, the advertisers do not have any targeting options whereas, in an ad network, advertisers have targeting options such as device, OS targeting, category, city targeting, etc.
• An advertiser can choose to pay different commission to different affiliates in an affiliate network in comparison with an ad network where the advertiser does not enjoy the advantage of paying different commission to different publishers.
• There is no blind affiliate network whereas, there exist blind as well as premium ad networks.
• In an affiliate network, it is the choice of the advertiser to work with an affiliate or not whereas, in an ad network advertisers cannot choose to work with a publisher or not.

Similarities Between Affiliate Network and Ad Network

Though there are a number of differences between the two yet they exhibit certain similarities which are as follows:

• Both the networks carry three building blocks. An affiliate network has an affiliate, an advertiser, and the affiliate network itself. An ad network has a publisher, an advertiser, and the ad network itself.
• An affiliate network promotes advertisers with a pool of affiliates and an ad network promotes advertisers with a pool of publishers.
• Under an affiliate network, affiliates get promotional material from the network and under ad network, publishers get the promotional material from the network.
• Advertisers pay to the affiliate network and then it further pays the affiliates and in an ad network, advertisers pay the ad network which further pays the publisher.

Important Facts About Affiliate Marketing You Need to Know

Affiliate marketing is considered the best advertising model because it provides incentives TO both the affiliate and the merchant. It is the most efficient way to handle online advertising. It is flexible and offers a number of benefits.

It is immensely popular now and has expanded rapidly over the last few years. Here are some statistics to support that.

• Nearly 81% of the brands use affiliate marketing programs.
• Between September 2016 and September 2017, the search interest grew 30% for affiliate marketing.
• Of all the online orders, 16% is generated through affiliate marketing.
• More than 20% of the annual revenue of publishers is generated through affiliate marketing.
• The most popular affiliate marketing category is fashion, followed by sports, health, and wellness.
• From affiliate marketing rates ranging from 4-8.5%, Amazon now pays 10% commission to its influencers for promoting luxury items.

Despite all the dissimilarities and similarities between affiliate network and ad network, it is clear that the basic function performed by both is the same. One of the major advantages affiliate marketing enjoys is that an affiliate has the power to choose the advertiser and pay different commission to different affiliates.