I can't think of a better person to answer this question than Shawn Collins, who has a useful weblog called Affiliate Tip Blog and also runs a large, successful affiliate marketing conference twice a year called the Affiliate Summit. The next one's in July at Disneyworld in Orlando and I'll be there, talking about blogging and other ways to promote your business online. I'm already looking forward to it!

Anyway, I asked Shawn this question and here's what he had to say:

There are a couple ways to go the DIY route with an affiliate program, either by using an ASP or installing scripts on your machine. In terms of cost and quality, I'd go with MyAffiliateProgram from KowaBunga for an ASP and Groundbreak.com Ultimate Affiliate if you want it on your server.

The installed software option looks more attractive, because it's generally got a much lower, one time price tag. However, there are lots of attributes you get with an ASP that doesn't come with a script. When you install a piece of software, your tech support will often end with the successful installation. Also, in the case of many off the shelf products I've seen, additional versions come seldom if at all.

Additionally, you've got intangibles like the reputation of the ASP. In general, they've got a network associated with their technology, so your program gets a certain credibility just for being on that platform. On the contrary, the performance and reliability of your server are a big question mark for affiliates. Since the ASPs are working with hundreds or thousands of merchants on a regular basis, they have some intelligence they can share with you, such as which affiliates have been flagged as fraudulent by other merchants. And some features that the big affiliates require, like sub-ID tracking, are not available with the scripts.

Think about the technology you use as a long term solution. It's going to be a big headache for you if you establish your program on some script and later decide it's just not scalable. Then you've got to migrate the affiliate program and affiliates. One place to get lots of demos of affiliate program technologies and opinions from customers of those technologies is at the upcoming Affiliate Summit conference - July 9-11 in Orlando.

Thanks, Shawn!