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).
o 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.
o 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.
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