Managed affiliate programs are the way to go if you want to market affiliate products or get paid for leads online. Direct affiliate programs can lead to huge disappointments for online marketers especially for less established merchants.

Even the big managed programs are not not exempt from problems and I will try to cover pros and cons of both systems in this Hub.

What is a managed affiliate program?

A managed affiliate program is an affiliate program is an affiliate program managed by a third party. A broker so to speak. They bring publishers (website owners) and merchants together. The handle all distributions of payments and you are assigned to an affiliate manager one person to contact for all issues. Managed programs also have a diverse selection of affiliate programs to choose from. You can choose one or many different products to sell or market online.

Usually managed programs also collect payment from the merchants prior to placing offers for affiliates to market. So your money is more secure.

Pros of managed affiliate programs

• You have one point of contact for hundreds of programs. Your affiliate manager. You can have them review your site and make recommendations on the best converting offers for you to market.
• Tracking - Every managed affiliate program that I belong to, see the list below, have ways for you to track various campaigns by placing tracking codes in your affiliate urls. Most self managed affiliate programs have that ability but I like to login to one place to check stats on several campaigns versus having to login to each merchant site. I also use certain scripts to track different campaigns, but using affiliate trackers are ok if you are just starting out. One thing I want to point out though if you are using PPC advertising for managed affiliate programs do not use your keywords as your tracker. (I feel another hub coming on)
• Timely payments - I have yet to have a managed affiliate program fail to make a timely payment. Even if they are having problems with a merchant you will usually receive your money.

• Ad rotation - If you want to rotate different offers on your site you can set up rotators in the managed affiliate programs that will spread impressions evenly or you can weight them to have certain offers appear more often. I like this feature because it allows me to test various offers without having to have a different script on my website.
• Usually higher payouts - Because managed affiliate programs refer a lot of volume to merchants they usually receive higher payouts which in turn are passed on to the affiliates. A good example is hosting affiliate programs where performance determines payout level. One self managed program that I know of has a sliding scale between $50 and $125 per sale depending on the volume you send them. The same merchant also uses managed affiliate programs and the payout to the affiliate is $100 flat even if it is just one sale. Where as a direct affiliate would have to make 25 sales to get to the $100 level.

Cons of managed affiliate programs

• One violation of terms of service may wipe out all affiliate earnings. The best bet is if you feel that it may be against the rules don't do it until you talk to your affiliate manager.
• Acceptance - Managed affiliate programs are harder to get into versus vendor managed programs. you cannot get into managed affiliate programs without having at least one top level domain and having meaningful content with your own hosting account. Also you will find that even though you are in a managed affiliate program you will still need to get vendor approval to be accepted for some offers. This is particularly aggravating to me.
• Tons of email - Every managed affiliate program sens daily emails Monday through Friday and some send mail on the weekends. if you are not set up to properly sort email it can be overwhelming. (IFAHCO)
• Skimming and leaks - You may loose credit for some sales or leads in the forwarding that the managed affiliate programs use. Although no real proof exist it is believed that some affiliate sales or leads are skimmed to make up for fraudulent sales and leads. Also there may be leaks in an affiliate program that you don't get paid for the sale if they call a number and order from the website or there is other non earning activities that take place once they hit the merchant site. This is why I refuse to market clickbank products because if they don't buy when they hit the site and they capture the lead you usually lose the commission if they buy later.(IFAHCO x 2)

Pros of Merchant Managed Campaigns

• Some merchant managed affiliate programs do offer higher payout than managed programs. One that I know of pays only $2.50 for a lead in a managed campaign and $5.00 for the lead if direct. However the con of that same program requires more activity from the referred lead to get $5.
• Better marketing material - One program that I promote has better marketing materials for direct affiliates. It just makes me be more creative in my marketing efforts so I can incorporate the better marketing materials.

• Many don't require you to own a website and you can promote using free services. Although managed once in they do not limit you on how you promote their products with the exception of some traffic sources like MySpace.

Cons of Merchant Managed Campaigns

• Untimely Payments - Checks from merchant managed programs are not always timely and they usually don't offer the ability to receive bank wires or paypal.
• Inability to change offers on the fly. Remember I talked about the rotators earlier they allow you to change offers fast inside of your affiliate control panel. Where as merchant managed programs you have to find new offers and change every place you have links established. I like using 301 redirects on free sites like Hubpages that solve some of the problem.
• Closing shop without warning - managed affiliate programs usually collect payment upfront from merchants so you money is secure. I have promoted affiliate programs before and they close shop owing me cash. Also managed affiliate programs know of problems really fast.

• No compete agreements - Sometimes merchant managed programs will not allow you to promote competitive offers. One of my best promotion tactics is to compare products and let the site visitor make the decision.
• Multi Level aspects - I would rather create leads then try to bring in affiliates to multilevel affiliate programs where my pay is determined by how deep a down line is or based on requirements to get paid. I don't want to take my time to train down lines and answer questions about how to promote products. Pay me $4.50 for the lead an I am done. I rather have that that $1 a month someone stays active as the fallout is huge in these types of programs. (IFAHCO)
• No personal contact - I like the fact I can pick up the phone and talk to an affiliate manager at the managed affiliate programs or reach them on messenger services.
• Payout Minimums - Where managed affiliate programs have minimum payouts, usually $25 the merchant managed programs have minimum payouts as well. With the managed programs it is a minimum that must be reached with all of their products you promote with the merchant managed programs you have to generate the minimum payouts with one product.

I have listed pros and cons of both types of programs. Give me a managed affiliate program any day. I like getting paid for my efforts and I like the opportunity to promote many products and get paid from one source versus several. It is also easier to research a niche and find high paying affiliate offers in one place.