Is CJ Affiliate better than ShareASale
What does the elephant wedding of Awin and affilinet mean for the industry?
The affiliate marketing landscape has been relatively quiet in recent years. But 2017 is the year of big changes. The last bang came a few days ago: United Internet and the Axel Springer Group are merging their two affiliate networks affilinet and Awin to form the largest provider in Europe. An IPO of the new mega-network, with a cumulative turnover of 717 million euros (based on the figures from 2016), almost 10,000 advertising customers and 150,000 publishers worldwide, is of course already planned. After all: The name Awin, to which we have only just got used to the merger of zanox and Affiliate Window under the Springer umbrella in March 2017, will remain.
Are the antitrust authorities waving the deal through?
What does this elephant wedding mean for advertisers? If the Federal Cartel Office does not raise an objection at the last minute, affilinet will disappear as a separate brand in the long term and become part of the Awin platform. In addition to the new giant, only a few smaller affiliate networks such as Digistore24, Superclix, Adcell or belboon as well as specialized niche providers such as FinanceAds will remain in Germany. There are also international providers such as Tradedoubler, CJ Affiliate by Conversant, Tradetracker, Webgains or the up-and-coming Rakuten marketing network.
According to the 2016 iBusiness ranking of affiliate networks, Awin, with over 88,000 active publishers and almost 3,500 merchants in Germany, would rank well ahead of Tradedoubler, Digistore24 and TradeTracker. In Western Europe, too, the new giant's market power would be almost overwhelming. On the positive side, the affiliate issue will again receive more attention with the merger. The Marketing Offerings segment, to which this business belongs at Springer, increased its sales by 8.1 percent in the first half of 2017.
This shows that affiliate marketing is alive. But it is well known that competition promotes business. And that is considerably disrupted by the new quasi-monopoly. Therefore, it is currently at least questionable whether the antitrust authorities will wave the deal through without any conditions. Because the new network could dictate conditions for publishers and advertisers at will and also hinder their market access as a powerful gatekeeper. There are enough examples of this in the industry, in which only a relatively small number of players have so far been active.
Technical innovations have been announced
In the future, the new network will also know more precisely what its partners really earn and what the advertisers are spending. In addition, the exclusivity advantage does not apply because there is no longer any real selection on the market. The smaller players, who are currently still active, no longer allow any real sanctions - as they could previously be used in competition by Awin and affilinet. That is why the demand for absolute neutrality and unregulated access to the new super network is essential.
It remains to be seen whether the merger will actually "increase the attractiveness of affiliate marketing", as the announcement says. The acquisition of affilinet will not open up any new markets for Awin, as the regional activities are largely congruent so far.
At least the new network promises to focus more on strategic topics such as cross-device and in-app tracking or to break new ground in influencer marketing and mobile advertising. Technical innovations on the Awin platform - according to the first announcement - can also be expected through the bundling of development capacities towards a common goal.
In the last few years, however, this has only taken place very slowly in public networks, despite increased competition, and has been stagnating for some time. Due to the many acquisitions of the Springer Group - and this is certainly not the end of the world flagpole - the pressure on Awin is reduced here.
Because there are fewer and fewer major competitors who need to be trumped through more sophisticated technologies and constant innovation. In any case, the question arises as to the strategic direction of Awin, which in recent years has moved strongly towards internationalization - with the acquisitions of Affiliate Window in Great Britain, ShareASale in the USA and M4N in the Netherlands. However, if more countries are better covered via the new network, this is definitely an advantage for globally active advertising customers.
The importance of private networks will grow
In order to avoid dependency on a public network with a monopoly character, advertisers could increasingly focus on private networks in the future. That would also bring a push from a technological point of view, since the private platform providers already have more mature technologies at least in some areas and are thus positioning themselves as an alternative counterweight. Perhaps there will also be mergers here, or other, currently smaller, networks will develop as alternatives. Finally, new providers could also discover gaps and opportunities for themselves in the consolidating market.
But it is still too early to make serious statements here. Because there are currently many questions open to publishers, advertisers and agencies. What happens to programs that are currently running in both networks? Will you stay with two locations - Berlin and Munich - in Germany and the other overlapping markets of affilinet and Awin? How does the migration to the uniform platform work? Could some of the current affilinet features be lost? What happens with different conditions? How much effort does advertiser and partner take? What effects does the merger have on service, support and advice? An important question, especially for smaller advertisers. For example if extra costs should arise for this in the future. The FAQs on the AWIN website already contain initial answers to some of these questions. But the permanent development is still open at the moment.
In addition to the open decision of the antitrust authorities, it is also up to us how Rakuten, Tradedoubler and CJ Affiliate by Conversant will react to the new challenger from Berlin. Is there a possible counter-attack? And how quickly does the integration take place? Because the Springer network is far from being fully established. In Germany, the name Zanox is still on everyone's mind. If we look at the fact that the practical implementation of the merger between Affiliate Window and Zanox took eight years, we can look forward to the specific schedule for the next step. The coming months or even years will definitely be very interesting for affiliate marketing worldwide.
Valentina Piol (31) has been Head of Affiliate Marketing at the Duisburg-based digital marketing agency metapeople and deputy chairwoman of the “Affiliate Marketing” focus group in the Federal Association of the Digital Economy (BVDW) since 2017. With their specialized brand metaapes, the performance specialists from the Ruhr area have been supporting the development of international partner programs for well-known brands from Alltours to Deichmann to Lufthansa since 2004.
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