The Different Types Of Online Affiliate Marketing
By Jamie Snodgrasss, Mon Jan 2nd
Affiliate marketing programs has never been as popular before asit is today. Why? There can be a number of reasons. The mostprobable reason, however, could be the fact that the benefits ofaffiliate marketing have become clearer to a lot of people nowthan they were before.
Today, both the merchants and the affiliates can see clearlythat affiliate marketing can work for both of them. The merchantsees affiliate marketing today as the chance to advertise theirproducts at a lower cost. The affiliates, on the other hand,sees affiliate marketing as an easy way of earning profitsonline by doing what they like most, and that is by creatingwebsites.
Just as the popularity of affiliate marketing has shifted intogreater heights, so has the people's outlook about it changed.No longer is affiliate marketing considered today as analternative method for the merchant to advertise his products,or as a source of additional income for the affiliates. Formerchants and affiliates alike, affiliate marketing is nowconsidered as a main source of profits and revenues.
So the question now is what type of affiliate marketing willwork best for you? Are all affiliate marketing programs thesame? Are the benefits the same? Or are there affiliatemarketing programs that work better than the others?
There are actually different types or classes of affiliatemarketing, and the number of types will depend on how one willclassify them. The most basic affiliate marketing programs,however, falls under two categories: pay-per-click (PPC), andpay-per-performance (PPP).
*Pay Per Click (PPC)
PPC is the most popular type of affiliate marketing foraffiliates with small websites, and probably the easiest way forthem to earn money. In this affiliate marketing type, themerchant pays his affiliate whenever a visitor is referred tohis site, that is whenever someone clicks through the merchant'sbanner or text ads. The affiliate gets paid a certain amounteven if the visitor he referred does not purchase anything fromthe merchant's site. However, typical fees for PPC affiliateprograms are small, usually not exceeding a dollar for everyclick.
*Pay Per Performance (PPP)
PPP affiliate marketing is the most popular among merchant andis also the most lucrative type for the affiliates. In this typeof affiliate program, the merchant only pays the affiliatewhenever his referral translates into an action--that iswhenever the visitor he has referred actually buys somethingfrom 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 therange of 15% to 20% of the actual product sales.
Pay-per-performance affiliate marketing can be furtherclassified into two popular types: pay-per-sales (PPS) andpay-per-lead (PPL).
oPay Per Sale (PPS)
In a pay-per-sale type of affiliate marketing, the merchants paythe affiliate a certain fee whenever the visitor he has referredto the merchant's site actually buys something from themerchant's
site. Affiliates are often paid on commission basis,although other merchants would opt to pay a fixed fee. But nomatter what the basis of the fee is, it is generally higher thanthe fee paid to affiliates in a pay-per-click affiliate program.
oPay Per Lead (PPL)
The pay-per-lead type of affiliate marketing is a slightvariation of the PPS type and is often used by insurance andfinance companies and other companies who rely on leads fortheir company to grow. In this type of affiliate marketing, theaffiliate is paid whenever the visitor he referred to themerchant's site fills up an application form or any similar formrelated to the business of the company. Compensation for thistype of affiliate marketing is based on a fixed fee whose ratesapproximate that of the fixed fee in the PPS type.
Aside from these three specific types of affiliate marketing, alot of other affiliate marketing types exist. If theclassification is based on the depth of the affiliate network,it can be classified as single-tier, two-tier, and multi-tieraffiliate marketing. There is also another type of affiliatemarketing that pays the affiliate each time the customer he hasreferred 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 differentlevels or tiers in the affiliate network by which payments aremade. In a single-tier affiliate marketing program, theaffiliates are only paid based on the direct sales or traffic hehas referred to the merchant. All the previously mentionedaffiliate marketing types (i.e. PPS< PPL, and PPC) fall underthe single-tier classification.
*In two-tier affiliate marketing programs, the affiliate is notonly paid for the direct traffic or sales that he refers to themerchant's site, but also on every traffic or sales referred byvarious other affiliates who joined the affiliate programthrough his recommendation. Multi-tier affiliate marketing worksthe same way, although the affiliate gets additional commissionfor a wider number of affiliates in different tiers in theaffiliate network.
* Residual Income Affiliate Marketing
In residual income affiliate marketing, the affiliate gets paidnot only once for every customer he has referred to themerchant's site. Rather, the affiliate is also paid whenever thecustomer he has referred returns to the site and purchaseanother product. Compensation for such type of affiliatemarketing is based on either sales percentage commission orfixed fee basis.
The different affiliate marketing types would virtually workdifferently for merchants and affiliates alike, and each wouldgenerally have their own list of benefits. Which type ofaffiliate marketing will work best for you? It is not really forme to tell. Rather, it is for you to choose which type ofaffiliate marketing program will suit your needs andcharacteristics best.
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