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the different types of affiliate marketing
By John Ugoshowa
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 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 marketing can work for both of them. The merchant sees marketing today as the chance to advertise their products at a lower cost. The affiliates, on the other hand, sees 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 marketing has shifted into greater heights, so has the people's outlook about it changed. No longer is 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, marketing is now considered as a main source of profits and revenues.
So the question now is what type of marketing will work best for you? Are all marketing programs the same? Are the benefits the same? Or are there marketing programs that work better than the others?
There are actually different types or classes of marketing, and the number of types will depend on how one will classify them. The most basic 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 marketing for affiliates with small websites, and probably the easiest way for them to earn money. In this marketing type, the merchant pays his whenever a visitor is referred to his site, that is whenever someone clicks through the merchant's banner or text ads. The 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 programs are small, usually not exceeding a dollar for every click.
• Pay Per Performance (PPP)
PPP marketing is the most popular among merchant and is also the most lucrative type for the affiliates. In this type of program, the merchant only pays the 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 marketing usually comes in the range of 15% to 20% of the actual product sales.
Pay-per-performance marketing can be further classified into two popular types: pay-per-sales (PPS) and pay-per-lead (PPL).
o Pay Per Sale (PPS)
In a pay-per-sale type of marketing, the merchants pay the
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 program.
o Pay Per Lead (PPL)
The pay-per-lead type of 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 marketing, the 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 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 marketing, a lot of other marketing types exist. If the classification is based on the depth of the network, it can be classified as single-tier, two-tier, and multi-tier marketing. There is also another type of marketing that pays the each time the customer he has referred purchases something from the merchant's site.
• Single-Tier, Two-Tier, and Multi-Tier Marketing
These types of marketing are based on the different levels or tiers in the network by which payments are made. In a single-tier marketing program, the affiliates are only paid based on the direct sales or traffic he has referred to the merchant. All the previously mentioned marketing types (i.e. PPS< PPL, and PPC) fall under the single-tier classification.
• In two-tier marketing programs, the 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 program through his recommendation. Multi-tier marketing works the same way, although the gets additional commission for a wider number of affiliates in different tiers in the network.
• Residual Income Marketing
In residual income marketing, the gets paid not only once for every customer he has referred to the merchant's site. Rather, the is also paid whenever the customer he has referred returns to the site and purchase another product. Compensation for such type of marketing is based on either sales percentage commission or fixed fee basis.
The different marketing types would virtually work differently for merchants and affiliates alike, and each would generally have their own list of benefits. Which type of marketing will work best for you? It is not really for me to tell. Rather, it is for you to choose which type of marketing program will suit your needs and characteristics best.
John Ugoshowa. For more information about affiliate marketing see the affiliate marketing section of The Free Ad Forum at: http://www.thefreeadforum.com/infowizards/CAT/Affiliate-Marketing_68_1.html
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