Types of Affiliate Marketing Programs
1. Pay-Per-Click
This is the most popular type of affiliate marketing program especially for affiliates with small sites. In this type, the affiliate earns money whenever a visitor from his site is directed to the merchant’s site. That happens when someone clicks on the text ads or banners placed in the affiliate’s website. Even if the visitor referred to the site did not make a purchase, the affiliate gets a certain amount for directing that visitor to the merchant’s website. The fees, however, for PPC affiliate programs are relatively small. They typically don’t exceed a dollar for every click.
2. Pay-Per-Performance
Among the types of online affiliate programs, this is the most commonly used by most merchants and is also the most profitable type for affiliates. Its benefit for the merchant is that he only needs to pay the affiliate if the traffic referred to his site translates into sales, meaning, whenever a visitor becomes a lead or buys something from the site. For the merchant, this means big savings. For the affiliate, on the other hand, pay-per-performance is the most lucrative type of affiliate marketing program because the profit they get is high. The commission affiliates get from each transaction typically ranges from 15% to 20% of the actual sale.
Pay-per-performance program can be further categorized into two – pay-per-sales and pay-per-lead.
• Pay-per-sale
In this type, the affiliate gets paid when the visitor he referred to the merchant’s website makes a purchase. The payment is usually on a commission basis, though some merchants offer a fixed rate. Whatever the basis of the fee, it is generally higher than what pay-per-click affiliates receive.
• Pay-per-lead
This type of affiliate marketing is a variation of the pay-per-sale type and is commonly used by finance and insurance companies as well as other businesses that rely on leads. Here, the merchant pays the affiliate whenever the visitor directed to the merchant’s site decides to fill up an application form or any form related to the company’s business. The affiliate usually receives a fixed fee that’s almost the same to the rate in PPS type.
Today, there are hundreds and thousands of websites in the web that run their online affiliate programs. And these sites can prove that affiliate marketing is the most efficient and cost-effective way to promote the merchant’s products and services online. This type of Internet marketing assures you of fast Return of Investment.
