Friday, June 18, 2010

How Many Types Of Affiliate Marketing Programs Do You Know?

by Stan Bannister

The following article is one of a series of articles which focus on Affiliate, Article and Internet Marketing. All of the articles are based on real experiences and research done over twenty years as a personal and business coach. They are also written in response to questions which I have been asked as well as address common challenges that people have with affiliate marketing, article marketing, internet marketing or running an online business in general. I sincerely hope that you find the following information of value. One idea, one tip, one clue can make all the difference.

How Many Types Of Affiliate Marketing Programs Do You Know?

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

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 opportunity to advertise their products at a lower cost. The affiliates, on the other hand, sees affiliate marketing as an uncomplicated 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 supplemental 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 most effective for you? Are all affiliate marketing programs alike? Are the benefits the same? Or are there affiliate marketing programs that work better than the others?

There are in reality 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 merchants and is as well 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 frequently 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 more often than not higher than the fee paid to affiliates in a pay-per-click affiliate program.

Affiliate, Article and Internet Marketing in general isn't as easy as many would have us believe. I fully understand (through my own experiences) that it is very much easier said than done. However, you are here, right now, because you have a desire to improve your business, grow your business, and be more successful. These articles are here with the sole intention of helping you to make the whole process a lot easier.

* Pay Per Lead (PPL)

The pay-per-lead type of affiliate marketing is a slight variation of the PPS type and is frequently 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.

Separate 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 several 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 just 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 purchases 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 in general have their own list of benefits. Which type of affiliate marketing will work best for you? It is not really for me to tell. Instead, it is for you to select which type of affiliate marketing program will suit your needs and characteristics best.

NOW is the time!

O.K. you have read the article. Now is the time for action. Without action, this article contributes no value whatsoever to your affiliate success. But remember, without action, you cannot blame this affiliate marketing article or any article for that matter. So, take action NOW.

Even if only one piece of advice, one piece of information, one tip makes a difference, then the whole article has been worth it for all of us.

NOW is the time!

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