Affiliate marketing programs have never been more popular than they are today. For merchants, the appeal of such programs is cost-effective advertising, while affiliates find such programs attractive because they provide a quick and easy way to generate an income. Once considered a sideline, affiliate programs now play a vital role in the world of Internet marketing. There are a limitless number of programs from which affiliates can choose. However, most fall under one of two categories: pay-per-performance (PPP) and pay-per-click (PPC).
PPC is the more popular of the two programs for affiliates who are running small businesses. With this program, the affiliate is paid for each visitor that clicks from his or her site to that of the merchant’s. The affiliate is paid regardless of whether or not a sale is made. The fee paid for each click is typically nominal and generally does not exceed one dollar.
PPP affiliate marketing is favored by many merchants. This is because a fee is paid only if a sale is made through the efforts of the affiliate. For dedicated affiliate marketers, however, such programs are quite lucrative. This is because the affiliate will earn a commission on each sale, which typically ranges from 15% to 20% of the total cost of the goods or services purchased by the customer. There are two subdivisions of pay-per-performance affiliate programs: pay-per-sales (PPS) and pay-per-lead (PPL).
With pay-per-sale affiliate marketing, the affiliate is paid a specific fee whenever he or she redirects a visitor to the merchant’s site and a purchase is made. This predetermined fee will depend on the specific agreement between the affiliate marketer and the merchant. However, such fees are always much higher than the pay-per-click fee mentioned above.
Pay-per-lead affiliate marketing programs are frequently used by finance and insurance companies who heavily rely on leads for company growth. With such programs, affiliates are paid whenever visitors fill out application forms or similar documents, provided they have landed on the merchant’s site through the efforts of the affiliate.
Affiliate marketing agreements are also categorized as single-tier, two-tier, or multi-tier programs:
With a single-tier program, the affiliate is paid only for the direct traffic or sales he or she redirects to the merchant’s site. With two-tier affiliate marketing programs, the affiliate is also paid for traffic or sales sent to the merchant’s website by affiliates that he or she recruited into the program. Multi-tier affiliate marketing programs operate in a similar manner to that of two-tier programs, although the marketer enjoys additional commissions from a higher number of affiliates in the network.
Residual Income Programs
With residual income, the affiliate earns money each time a customer returns to the merchant’s site and makes another purchase. The compensation can be in the form of a preset fee or a specific commission. There are numerous options from which one can choose when searching for the ideal affiliate marketing program. For this reason, marketers should review the various plans and select the one that best suits their needs.