Affiliate Marketing in 2003: Networks vs In-House
A decision framework for 2003: whether to join an affiliate network or build your own program, and how to structure commissions so the right partners sign up.
By 2003, affiliate marketing had stopped being a novelty and become infrastructure. Commission Junction and LinkShare were running mature marketplaces with thousands of merchants and far more affiliates competing for placement. ClickBank had carved out its own lane for digital products, letting anyone with an ebook or downloadable tool launch an affiliate program in an afternoon. The question for most businesses was no longer “should we try this,” it was “how do we set this up correctly.”
The first decision: network or in-house
Every business evaluating affiliate marketing in 2003 faced the same fork.
Joining a network (Commission Junction, LinkShare, ClickBank for digital goods) gets you tracking, a searchable affiliate directory and payment handling out of the box. You pay setup fees and a percentage on top of commissions, but you’re live in days rather than months. For most small and mid-sized businesses, this was the practical choice.
Building in-house means licensing or writing your own tracking system and recruiting affiliates directly. It’s cheaper per transaction at scale and gives you full control over the relationship, but it requires real technical investment and, without a network’s directory, you’re responsible for finding every affiliate yourself. This route made sense mainly for larger retailers already running significant online volume.
Structuring commissions that attract the right partners
The commission rate is the single biggest lever in a program’s success, and it’s easy to get wrong in both directions. Set it too low and you’ll attract only the affiliates with no better options, low-quality traffic that rarely converts. Set it too high without a margin cushion and a single spike in sales can turn a promotional win into a loss.
A workable starting point: look at what your product’s margin supports, then check what comparable merchants in the same network are offering. Affiliates comparison-shop between merchant programs the same way customers comparison-shop between products, and a rate noticeably below category norms will struggle to get picked up by anyone beyond the smallest sites.
What to track beyond the sale
Raw commission volume tells you affiliate marketing is generating revenue, but it doesn’t tell you whether the program is healthy. Two numbers matter more:
- Earnings per click (EPC), the average commission an affiliate earns per hundred clicks sent your way. This is what serious affiliates check before joining a program, and it’s what you should check when deciding which of your own affiliates deserve more support.
- Return rate on affiliate-driven sales. If orders coming through affiliate links get returned or charged back at a higher rate than direct orders, that’s a sign some affiliates are using misleading promotion to force clicks.
The compliance question businesses skip
Cookie duration, the window during which an affiliate still gets credit for a sale after the initial click, needs to be spelled out clearly in your program terms, along with what promotional methods are and aren’t allowed. Ambiguity here is where most merchant-affiliate disputes start, and a program with clear, published rules earns more trust from serious affiliates than one that makes decisions case by case.
Get the structure right at the outset and affiliate marketing becomes one of the lowest-risk channels available to a growing business: partners do the promotional work, and you pay only for the results they produce.
More from the Paid Advertising archive, the full 2003 roster or the Digital Business Marketing Awards.
