The Different Types Of Affiliate Marketing
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
* 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.
About the author:
Blair Gwilt is an online marketer and owner of the website
http://www.theaffiliatevoice.com. His site offers information
and resources for people seeking to start a home business.
Written by: Blair Gwilt
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