Tuesday, August 01, 2006

The Different Types Of Affiliate Marketing

Have you ever wondered if what you know about affiliate is
accurate? Consider the following paragraphs and compare
what you know to the latest info on affiliate.

Affiliate marketing programs has never been as popular
before as it is today. Why? There can be a number of reasons.
The most probable reason, however, could be the fact that the
benefits of affiliate marketing have become clearer to a lot of
people now than they were before.

Today, both the merchants and the affiliates can see clearly
that affiliate marketing can work for both of them. The merchant
sees affiliate marketing today as the chance to advertise their
products at a lower cost. The affiliates, on the other hand, sees
affiliate marketing as an easy way of earning profits online by
doing what they like most, and that is by creating websites.

Just as the popularity of affiliate marketing has shifted into
greater heights, so has the people's outlook about it changed.
No longer is affiliate marketing considered today as an alternative
method for the merchant to advertise his products, or as a
source of additional income for the affiliates. For merchants
and affiliates alike, affiliate marketing is now considered as a
main source of profits and revenues.

So the question now is what type of affiliate marketing will work
best for you? Are all affiliate marketing programs the same?
Are the benefits the same? Or are there affiliate marketing programs
that work better than the others?

There are actually different types or classes of affiliate marketing,
and the number of types will depend on how one will classify them.
The most basic affiliate marketing programs, however, 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.
The affiliate gets paid a certain amount even if the visitor he
referred does not purchase anything from the merchant's site.
However, typical fees for PPC affiliate programs are small, usually
not exceeding a dollar for every click.

-Pay Per Performance (PPP)

PPP affiliate marketing is the most popular among merchant and is
also the most lucrative type for the affiliates. In this type of
affiliate program, the merchant only pays the affiliate whenever
his referral translates 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. 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 the range of 15% to 20% of the actual
product sales.

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)

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. But 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.

-Pay Per Lead (PPL)

The pay-per-lead type of affiliate marketing is a slight variation
of the PPS type and is often used by insurance and finance companies
and other companies who rely on leads for their company to grow.
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.
Compensation for this type of affiliate marketing is based on a fixed
fee whose rates approximate that of the fixed fee in the PPS type.

Aside from these three specific types of affiliate marketing, a lot
of other affiliate marketing types exist. If the classification is
based on the depth of the affiliate network, it can be classified as
single-tier, two-tier, and multi-tier affiliate marketing. 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.

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

These types of affiliate marketing are based on the different levels
or tiers in the affiliate network by which payments are made. 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.

-In two-tier affiliate marketing programs, the affiliate is not only
paid for the direct traffic or sales that he refers to the merchant's
site, but also on every traffic or sales referred by various other
affiliates who joined the affiliate program through his recommendation.
Multi-tier affiliate marketing works the same way, although the
affiliate gets additional commission for a wider number of affiliates
in different tiers in the affiliate network.

-Residual Income Affiliate Marketing

In residual income affiliate marketing, the affiliate gets paid not
only once for every customer he has referred to the merchant's site.
Rather, the affiliate is also paid whenever the customer he has
referred returns to the site and purchase another product. Compensation
for such type of affiliate marketing is based on either sales
percentage commission or fixed fee basis.

The different affiliate marketing types would virtually work
differently for merchants and affiliates alike, and each would
generally have their own list of benefits. Which type of affiliate
marketing will work best for you? It is not really for me to tell.
Rather, it is for you to choose which type of affiliate marketing
program will suit your needs and characteristics best.

The day will come when you can use something you read about here
to have a beneficial impact. Then you'll be glad you took the
time to learn more about affiliate.


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