Affiliate marketing programs has never been as
popular before
as it is today. Why? There can be a number of
reasons. The
most probable reason, however, could be the fact
that the
benefits of affiliate marketing have become clearer
to a lot
of people now than they were before.
Today, both the merchants
and the affiliates can see clearly
that affiliate marketing can work for both of them.
The
merchant sees affiliate marketing today as the
chance to
advertise their products at a lower cost. The
affiliates, on
the other hand, sees affiliate marketing as an easy
way of
earning profits online by doing what they like most,
and that
is by creating websites.
Just as the popularity of affiliate marketing has
shifted
into greater heights, so has the people's outlook
about it
changed. No longer is affiliate marketing considered
today as
an alternative method for the merchant to advertise
his
products, or as a source of additional income for
the
affiliates. For merchants and affiliates alike,
affiliate
marketing is now considered as a main source of
profits and
revenues.
So the question now is what type of affiliate
marketing will
work best for you? Are all affiliate marketing
programs the
same? Are the benefits the same? Or are there
affiliate
marketing programs that work better than the others?
There are actually different types or classes of
affiliate
marketing, and the number of types will depend on
how one will
classify them. The most basic affiliate marketing
programs,
however, falls under two categories: pay-per-click (PPC),
and
pay-per-performance (PPP).
Pay Per Click (PPC)
PPC is the most popular type of affiliate marketing
for
affiliates with small websites, and probably the
easiest way
for them to earn money. In this affiliate marketing
type,
the merchant pays his affiliate whenever a visitor
is
referred to his site, that is whenever someone
clicks through
the merchant's banner or text ads. The affiliate
gets paid a
certain amount even if the visitor he referred does
not
purchase anything from the merchant's site. However,
typical
fees for PPC affiliate programs are small, usually
not
exceeding a dollar for every click.
Pay Per Performance (PPP)
PPP affiliate marketing is the most popular among
merchant
and is also the most lucrative type for the
affiliates. In
this type of affiliate program, the merchant only
pays the
affiliate whenever his referral translates into an
action—that
is whenever the visitor he has referred actually
buys something
from the merchant's site or when the visitor becomes
a lead.
This means a lot of savings for the merchant. On the
other
hand, it becomes the most lucrative type for the
dedicated
affiliate, for commissions in PPP affiliate
marketing usually
comes in the range of 15% to 20% of the actual
product sales.
Pay-per-performance affiliate marketing can be
further
classified into two popular types: pay-per-sales
(PPS) and
pay-per-lead (PPL).
-
Pay Per Sale (PPS)
In a pay-per-sale type of affiliate
marketing, the
merchants
pay the affiliate a certain fee whenever the
visitor he has
referred to the merchant's site actually
buys something from
the merchant's site. Affiliates are
often
paid on commission
basis, although other merchants
would opt to
pay a fixed fee.
But no matter what the basis
of the fee is,
it is generally
higher than the fee paid to
affiliates in a
pay-per-click
affiliate program.
-
Pay Per Lead (PPL)
The pay-per-lead
type of affiliate marketing is a slight
variation of the PPS type and is often used by
insurance
and
finance companies and other companies who rely
on leads for
their company to grow. In this type of affiliate
marketing,
the affiliate is paid whenever the visitor he
referred to the
merchant's site fills up an application form
or
any similar
form related to the business of the company.
Compensation for
this type of affiliate marketing is based
on a
fixed fee whose
rates approximate that of the fixed
fee in the
PPS type.
Aside from these three specific types of affiliate
marketing,
a lot of other affiliate marketing types exist. If
the
classification is based on the depth of the
affiliate network,
it can be classified as single-tier, two-tier, and
multi-tier
affiliate marketing. There is also another type of
affiliate
marketing that pays the affiliate each time the
customer he
has referred purchases something from the merchant's
site.
Single-Tier, Two-Tier, and Multi-Tier Affiliate
Marketing
These types of affiliate marketing are based on
the different
levels or tiers in the affiliate network by which
payments
are made. In a single-tier affiliate marketing program,
the
affiliates are only paid based on the direct sales or
traffic
he has referred to the merchant. All the previously
mentioned
affiliate marketing types (i.e. PPS< PPL, and PPC) fall
under
the single-tier classification.
In two-tier affiliate marketing programs, the affiliate
is not
only paid for the direct traffic or sales that he refers
to
the merchant's site, but also on every traffic or sales
referred by various other affiliates who joined the
affiliate
program through his recommendation. Multi-tier affiliate
marketing works the same way, although the affiliate
gets
additional commission for a wider number of affiliates
in
different tiers in the affiliate network.
Residual Income Affiliate Marketing
In residual income affiliate marketing, the affiliate
gets
paid not only once for every customer he has referred to
the
merchant's site. Rather, the affiliate is also paid
whenever
the customer he has referred returns to the site and
purchase
another product. Compensation for such type of affiliate
marketing is based on either sales percentage commission
or
fixed fee basis.
The different affiliate marketing types would virtually
work
differently for merchants and affiliates alike, and each
would
generally have their own list of benefits. Which type of
affiliate marketing will work best for you? It is not
really
for me to tell. Rather, it is for you to choose which
type of
affiliate marketing program will suit your needs and
characteristics best.
