Affiliate Marketing Programs

There has never been as much interest in affiliate marketing programs as there is at the present. This is most likely because these programs offer a lot of benefits and people are becoming increasingly aware of what there is to be gained.

Merchants and affiliates alike benefit from the affiliate marketing model: merchants have an extremely cost effective form of advertising, since they don’t pay a cent until they make a sale and affiliates look at affiliate marketing to make money online by doing relatively undemanding work from home.

As affiliate marketing has become more widely adopted by companies, it has come to be seen not just as one of many ways for merchants to advertise products and services or as a secondary revenue source for affiliates, but as a primary means of advertising and of income for merchants and affiliates respectively.

Since there are a lot of different affiliate marketing programs and indeed several different types of affiliate marketing, the question remains of which will best meet your needs? Are some better than others, or are all affiliate marketing program created equal?

Broadly speaking, there are two kinds of affiliate marketing programs: PPC (pay per click) and PPP (pay per performance).

Pay Per Click (PPC)

Affiliates who have smaller websites usually prefer this kind of affiliate marketing, since it presents an easier way for them to earn commissions. This model allows affiliates to be paid for each visitor referred to the merchant’s site, even if they do not make a purchase. Of course, the commission paid is much smaller than for those in PPP programs – almost never more than a dollar per click and typically far less than this.

Pay Per Performance (PPP)

PPP affiliate marketing programs are preferred by merchants as well as most affiliates. These programs involve the affiliate being paid a commission only when a referral they have made makes a purchase, signs up for a mailing list or whatever other action is desired by the merchant. This is far more cost effective for merchants, but will give the affiliate a much larger commission, typically between 15% and 20% of the amount of the sale.

These programs can be organized into two sub categories: pay per lead (PPL) and pay per sale (PPS).

Pay Per Sale (PPS)

In pay per sale affiliate marketing programs, the merchant pays a commission to the affiliate only when their referrals make a purchase. This commission may be either a flat fee or a incentive of the amount of the sale. Either way, this commission tends to be significantly higher than in a pay per click affiliate marketing program.

Pay Per Lead (PPL)

Companies such as insurance companies and others who make extensive use of leads to keep their business going often use this type of affiliate marketing program. In this type of program, affiliates are paid when their referrals sign up to a mailing list or other form. These programs typically pay a flat gratuity to affiliates.

There are yet other types of affiliate marketing, including affiliate programs with more than one tier – there are single tier, two tier and multi tier affiliate programs. There are also programs which pay affiliates on all sales made by a customer they have referred; these are residual income affiliate marketing programs.

Residual Income Affiliate Marketing

Residual income affiliate marketing lets affiliates earn commissions not only on the first sale made by a referral, but also the purchases made on return visits to the merchant’s site by these referrals. This type of affiliate marketing program may pay affiliates either on a percentage basis or pay a flat fee per purchase.

Two tier affiliate marketing programs pay affiliates for their own referrals as well as for those made by other affiliates who they have recommended. Multi tier affiliate marketing programs are similar, with the difference being merely the depth of the network.

Single-Tier, Two-Tier, and Multi-Tier Affiliate Marketing

In these programs, the affiliates are paid based on the depth of the network. A single tier program is the traditional type, with affiliates being paid only for the traffic they have personally referred – this is the kind of affiliate marketing program which is most common.

There are pros and cons to each type of affiliate marketing program for merchants and affiliates alike. Now that you know how the different kinds of program work, you can make your own decision on which will be the best for you.