Homegrown vs. SaaS: Which Solution Is Best for Scaling an Affiliate Network? – Phonexa Canada

Germain Palacios

Content Writer

8 minute read

Choosing the right affiliate tracking solution is a pivotal decision that can significantly impact the success and growth of businesses operating in the ultra-competitive online marketing space.

With numerous options available, each catering to different needs and preferences, it’s essential for affiliate networks to make an informed choice that aligns with their requirements and goals.

There are two primary types of affiliate tracking solutions: in-house solutions and SaaS platforms. Each comes with its distinct set of advantages and considerations, making it crucial for businesses to understand how they can leverage these solutions effectively to drive their affiliate marketing success.

While in-house affiliate network solutions offer a level of customization and control, SaaS solutions provide convenience and scalability.

The following analysis compares the advantages and disadvantages of using homegrown tech solutions versus SaaS solutions for an affiliate network, focusing on essential criteria including ease of implementation, scalability, and security.

In-house vs. SaaS

Research indicates that inefficient use of customer data is the second biggest hindrance in the customer journey.

For many affiliate networks, in-house lead tracking systems have been the go-to option, offering customization and control over every aspect of their tracking and reporting. With in-house solutions, businesses have the freedom to tailor their affiliate program to specific requirements, ensuring seamless integration with existing systems and processes. This level of control can be particularly beneficial for businesses with unique affiliate marketing needs or compliance and security requirements.

On the other hand, SaaS-based affiliate tracking solutions provide an enticing blend of convenience and scalability, catering to businesses seeking a streamlined approach to managing their affiliate programs. With enterprise-grade SaaS platforms, there’s no need for complex installations or infrastructure investments – everything is readily available in the cloud.

The convenience provided by SaaS solutions enables businesses to get up and running quickly, saving time and resources that can be better utilized to focus on core business functions. Moreover, these solutions offer unparalleled scalability, effortlessly accommodating the growth of affiliate networks and supporting increasing demands without hassle.

Tracking solutions are pivotal in managing affiliate programs, tracking performance, and optimizing marketing efforts. However, it is essential to understand that a lead tracking system is not synonymous with an affiliate marketer’s CRM.

Comparing Affiliate Network Tracking Solutions

Read on to explore the key benefits and drawbacks of each software model and make an informed decision when sourcing affiliate network solutions.

Ease of Implementation

In-house Solution

Building an in-house affiliate tracking system requires substantial time, resources, and expertise. The implementation process involves hiring developers, defining requirements, and extensive testing to ensure accurate tracking. It can be a complex and tedious endeavor, especially if your affiliate network lacks dedicated technical resources.

SaaS Solution

SaaS affiliate tracking solutions come pre-built, eliminating the need for extensive development and testing. They offer user-friendly interfaces and streamlined onboarding processes, allowing businesses to get off and running quickly. With intuitive dashboards and comprehensive documentation, SaaS solutions simplify implementation and reduce the burden on internal teams.

Scalability

In-house Solution

In-house solutions can be tailored to meet specific business requirements. This flexibility enables customization and control over tracking mechanisms, commission structures, and reporting. However, scaling an in-house system can be challenging, requiring ongoing development and maintenance as the affiliate network grows. As the number of affiliates and transactions increases, the in-house affiliate network solutions typically struggle to handle the growing load, leading to potential performance issues.

SaaS Solution

SaaS solutions are designed to handle scalability effortlessly. They leverage robust infrastructure and cloud-based technologies, ensuring seamless performance even as your affiliate network expands. SaaS platforms offer scalability without the need for significant internal investments, allowing your affiliate network to focus on core competencies while leaving the technical aspects to the service provider.

Security

In-house Solution

With in-house affiliate network solutions, lead generators have greater control over data security. They can implement stringent security measures, access controls, and encryption protocols based on their unique requirements. However, maintaining the highest security standards necessitates ongoing updates, vulnerability assessments, and monitoring. Inadequate security measures can expose sensitive data, leading to potential breaches and reputational damage.

SaaS Solution

Reputable SaaS solutions prioritize data security and invest heavily in robust infrastructure, encryption protocols, and compliance certifications. They ensure data is protected with enterprise-grade security measures, including regular audits and vulnerability assessments. By leveraging the expertise and resources of SaaS providers, your affiliate network can benefit from industry best practices and focus on its core business, knowing that your affiliate program’s security is in reliable hands.

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Now that we’ve compared in-house and SaaS affiliate marketing solutions, let’s examine the factors that directly influence the cost of developing such software.

The Cost of Using a Homegrown System for Your Affiliate Network

The cost of developing in-house software for affiliate management can vary significantly depending on several aspects. The following are key factors that can influence the cost.

Scope and Complexity

The size and complexity of the required affiliate network solutions will impact the development cost. Determine the features and functionalities you need, such as tracking affiliate links, generating reports, and managing payments.

Development Team

The cost will depend on the size and expertise of the development team. This includes software engineers, designers, project managers, and quality assurance professionals. Rates can vary based on their location and experience level.

Timeframe

The development time required affects the overall cost. If you have a tight deadline, it may require additional resources or expedited development, potentially ramping up the cost.

Integration Requirements

If you need affiliate management software to integrate with existing systems or third-party platforms, it may add complexity and cost to the development process.

Maintenance and Support

Consider ongoing maintenance and support costs, including bug fixes, updates, and technical assistance after the initial development phase.

Infrastructure and Hosting

You should factor in the cost of infrastructure, such as servers, cloud services, and hosting, to ensure your software runs smoothly.

Given these variables, providing an exact figure without specific details about your requirements is challenging. However, a custom in-house software development project can range from tens of thousands up to hundreds of thousands of dollars. It is recommended to consult with software development firms or hire an experienced development team to get an accurate quote based on your specific sales enablement needs.

Cost Components of In-house Affiliate Network Solutions

Here are some rough estimates for different cost components involved in developing and implementing a homegrown affiliate software and tracking solution.

Development Cost

The development cost primarily depends on the software’s complexity and the developers’ hourly rates. Here’s a rough estimate based on hourly rates:

• Small-scale solution: $20,000 – $50,000
• Medium-scale solution: $50,000 – $100,000
• Large-scale solution: $100,000 – $300,000+

These figures are approximate and can vary significantly based on the aforementioned factors.

Infrastructure and Hosting

The cost of infrastructure and hosting varies depending on the chosen hosting provider and the expected traffic and usage patterns. Generally, for a basic setup, you can expect monthly costs in the range of $100 to $500.

Maintenance and Support

Ongoing maintenance and support costs are usually calculated as a percentage of the development cost. As a rough estimate, you can allocate 20% to 30% of the development cost annually for maintenance and support.

Integration Costs

If your affiliate network solutions need to integrate with third-party systems, such as a CRM platform, additional costs may be involved. Integration costs can vary greatly depending on the complexity and number of integrations required. You should consult with the respective service providers or development teams for accurate estimates.

Staff Training

Consider allocating a budget for training your staff on how to proficiently use and manage the affiliate network solutions. Depending on your chosen training resources, such as online courses or in-person workshops, this cost can vary.

It’s important to note that these estimates are rough approximations and can vary significantly based on your affiliate network’s requirements, complexity, and customization needs. It’s advisable to consult with software development firms or hire an experienced development team to get more accurate cost estimates tailored to your project.

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Which Affiliate Network Solutions Are Right for You?

Choosing between an in-house and SaaS affiliate tracking solution involves weighing the pros and cons based on your network’s unique needs.

Tracking solutions are crucial in an affiliate network’s overall infrastructure, providing centralized performance tracking, affiliate recruitment tools, advanced attribution models, and real-time analytics. By integrating a dedicated affiliate tracking solution into your tech stack, you can effectively manage your affiliate program, optimize performance, and drive success in the dynamic world of affiliate marketing.

By considering factors such as technical expertise, resource availability, and long-term growth plans, you can make an informed decision that supports your business goals.

Ultimately, the right choice will empower your affiliate network, boost revenue, and drive success.

In-house solutions stand as the embodiment of customization and control, granting affiliate networks the ability to sculpt their programs to precision. This tailored approach is particularly advantageous for programs with distinct affiliate marketing needs or stringent compliance requirements. However, the path to such bespoke solutions is riddled with challenges, from resource-intensive development and ongoing maintenance to the potential limitations in scaling.

On the other side of the spectrum, SaaS solutions beckon with the allure of swift implementation and seamless scalability. These platforms alleviate the burdens of complex installations and offer an expansive ecosystem to foster growth. The convenience of SaaS solutions frees up valuable time and resources, allowing businesses to channel their efforts into refining core operations.

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