The different types of affiliate programs

One of the reasons that affiliate marketing, has become so popular is, because of the fact that it is, potentially risk free , does not require a startup expense nor does it have costs of development and is an easy way of reaching out, to an audience across the world. It’s an absolute win-win situation, for both merchants and affiliates.

The Merchant get his product across to a large audience, with minimal expense while the affiliates, can earn money, just by creating websites. From just being considered, an alternative source of revenue generation, affiliate marketing has gone on to be considered, as the main source of revenue generation, for both Merchants as well as affiliates.

This has only pushed more people into getting on to, the Affiliate Marketing bandwagon. For a newcomer, various questions arise, which is the best? What will work better than others? What are the benefits? Do some affiliate programs, work better than others? The most basic types of affiliate marketing, can be classified, under 2 heads pay per click and pay per performance,

Pay Per Click (PPC)
PPC is the type where Merchants, pay for referring visitors, on to his site, by clicking on the ads posted, on the affiliate’s website. This is usually done, to generate traffic. The affiliate gets paid, even if no sale is made. However PPC payouts, are usually small.

Pay Per Performance (PPP)
Here the affiliates are paid, only if the referrals get converted into a sale. This is a beneficial program, for both the affiliate as well as the merchant. The affiliate gets paid anywhere between 15-20% of the product value, while it would mean a lot of savings, for the merchant. Pay-per-performance affiliate marketing can be further classified, into two popular types: pay-per-sales (PPS) and pay-per-lead (PPL).

Pay Per Sale (PPS)
Here the Merchants actually pay the affiliate, a certain fee, only if the visitor he referred buys something, from the Merchant’s site. This is usually paid as a commission, but most Merchants, prefer to pay a fixed amount, as a fee. But the payout is usually higher, than the pay per click programs.

Pay Per Lead (PPL)
This type of affiliate programs pays the affiliate, only if the visitor referred to the merchants website, registers himself on the Merchants Website. Usually used by finance and insurance companies who usually rely on leads. Compensation is usually, a fixed fee for every lead that is generated. While the above are based on the compensation offered, there are numerous others, which are based on the way, they operate. Here are a few based, on the depth of the affiliate network

Single-Tier, Two-Tier, and Multi-Tier Affiliate Marketing
These are those, which are based on the depth, of the affiliate programs. 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. The affiliate marketing types (i.e. PPS< PPL, and PPC) fall under the single-tier category.

This is essential a kind of multi level marketing, where there various level of tiers, below the first tier affiliate. The first tier affiliate, will not only get paid, for sales referred directly, but also from those generated, by those in the tiers below him.

Residual Income Affiliate Marketing
Here, the affiliate is paid whenever his referral makes a purchase i.e once a visitor has been referred to the merchant’s website, the affiliate gets paid, as long the referral keeps buying from the Merchants web site. While there are numerous affiliate programs, all of them are at the best variations of the above mentioned. What works for you, depends a lot on what you would prefer and what would benefit you, the most. Choose, but choose wisely.