The Different Types of Affiliate Marketing Programs: Affiliate marketing programs has never been as popular before as it is today. Why? There can be several reasons. The most probable reason could be that the benefits of affiliate marketing have become clearer. Many more people are now more aware than they were before.
Popularity of Affiliate Marketing is booming
Today, both the merchants and the affiliates can see clearly that affiliate marketing can work for both. The merchant sees affiliate marketing today as the chance to advertise their products at a lower cost. While affiliates see affiliate marketing as an effortless way of earning profits online. Really just 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. Affiliate marketing is no longer an alternative method for advertising products. It is also not a source of additional income for the affiliates. For merchants and affiliates alike, affiliate marketing is a main source of profits and revenues.
The Different Types of Affiliate Marketing
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 several types or classes of affiliate marketing. 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. Especially for affiliates with small websites, and the easiest way for them to earn money. With PPC the merchant pays his affiliate whenever someone clicks through the merchant’s banner or text ads. You get 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 program, the merchant only pays you when his referral translates into an action. That is whenever the visitor buys something from the merchant’s site or when the visitor becomes a lead. This means a lot of savings for the merchant. For commissions in PPP affiliate marketing, it 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. This is whenever the visitor he has referred to the merchant’s site buys something from the merchant’s site. Affiliates are often paid on commission basis, although other merchants would opt to pay a fixed fee. It is 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. It is often used by insurance and finance companies who rely on leads for their company to grow. In this type you are paid when the visitor he referred to a site fills out an application form. Or any similar form related to the business of the company. Compensation 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 various levels or tiers. These tiers are in the affiliate network by which payments are made. In a single-tier affiliate marketing program, you are only paid based on the direct sales. Or they are paid by the traffic that is 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 programs, you are not only paid for direct traffic or sales that are referred to a site. You 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, you get paid not only once for every customer he has referred to a site. You are also paid when the customer is 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. Both for merchants and affiliates alike, and each would 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.
Regardless of the types of affiliate marketing programs, you need to have a marketplace where you can engage in affiliate marketing. You also need a way to get up and running. Some of the markets I suggest you investigate first to get a quick start are Commission Junction, and ClickBank. For a more detailed list go to our Affiliate Programs Page.
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