The benefits of affiliate marketing is more pronounced today than before. This is one of the main reason for the immense popularity of affiliate marketing programs among so many thousands of internet marketers.
Just as the popularity of affiliate marketing has gone into overdrive, similarly the outlook of people has changed for the better about affiliate marketing. Affiliate marketing is no longer considered as a secondary method of marketing by the merchants, or as an additional income source by an affiliate marketer. For affiliates and merchants alike, affiliate marketing is now considered as a main source of profits and revenues.
Latest web technology has enabled the affiliate marketers to get their statistics and income figures the moment they make an affiliate sale. It is now possible to use companies like PayPal for payment and receipt processing. This has highly curtailed the time that an affiliate marketer needs to wait for his payments to be collected from the merchants.
Both the affiliates and the merchants have now realised that affiliate marketing is effective for both of them. The merchants perceive affiliate marketing as an opportunity to advertise their products at a much lesser cost. On the other hand, the affiliates see affiliate marketing as a uncomplicated way of earning profits online by doing something which they like most, and that is web publishing.
Are there any differences in affiliate marketing programs? Which are those affiliate marketing programs that work better than the others?
Pay-per-performance affiliate marketing can further be classified into two types: pay-per-sales (PPS) and pay-per-lead (PPL). Both these are highly popular.
a) 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. 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.
There are actually varieties of affiliate marketing, and the types will depend on how you are going to classify them. The primary classification of affiliate marketing programs 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.
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. Aside from these three specific types of affiliate marketing, a lot of other affiliate marketing types exist. 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.
Pay Per Performance (PPP) – PPP affiliate marketing is well liked among merchants and is also the most rewarding type for the affiliates. In this type of affiliate program, the merchant pays the affiliate only when his referral converts 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. On the other hand, this type of affiliate marketing becomes financially most rewarding for the dedicated affiliate, for commissions in PPP affiliate marketing usually comes in the range of 15% to 20% of the actual product sales.
Single-Tier, Two-Tier, and Multi-Tier Affiliate Marketing
C) Multi Tier – Multi-tier affiliate marketing works the same way, although the affiliate gets additional commission for more number of levels of affiliates in different tiers in the affiliate network.
An affiliate marketer has to try out different methods and decide which will work best for him or her. He/she should then concentrate on those affiliate marketing methods which are suitable for his/her style of internet marketing business.
Just as the popularity of affiliate marketing has gone into overdrive, similarly the outlook of people has changed for the better about affiliate marketing. Affiliate marketing is no longer considered as a secondary method of marketing by the merchants, or as an additional income source by an affiliate marketer. Pay Per Performance (PPP) – PPP affiliate marketing is well liked among merchants and is also the most rewarding type for the affiliates. On the other hand, this type of affiliate marketing becomes financially most rewarding for the dedicated affiliate, for commissions in PPP affiliate marketing usually comes in the range of 15% to 20% of the actual product sales. Aside from these three specific types of affiliate marketing, a lot of other affiliate marketing types exist.
Every affiliate marketer finds that these different affiliate marketing methods work differently for each of them. Multi tier affiliate marketing, also called Multi-Level Marketing (MLM) is a highly difficult type of internet marketing and it does not work for everyone. As a matter of fact, many legitimate marketers consider MLM as illegal or something which is undesirable.
D) Residual Income Affiliate Marketing – In this type, apart from the affiliate getting paid for every customer he has referred to the merchant’s site, the affiliate is also paid whenever the customer he has referred goes back to the merchant’s site and purchases another product. Commission for such type of affiliate marketing is based on either percentage of sales or based on fixed fee.
A) Single Tier – 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, PPL, and PPC) fall under the single-tier classification.
B) Two Tier – In two-tier affiliate marketing programs, the affiliates are not only paid for the direct traffic or sales that he brings to the merchant’s site, but also on every traffic or sales referred by other affiliates who joined as sub-affiliate of the above affiliate marketer.
These types of affiliate marketing are based on the different levels or tiers in the affiliate network by which payments are made.