Affiliate Marketing Compensation Models

Affiliate Marketing Compensation Models:

 

Compensation models are present in many areas of online marketing, including affiliate marketing. What is typical for affiliate marketing is that its achievement is based on performance which means that desired action must be completed for the compensation to be issued. 

 

In this post, we will learn some most commonly used affiliate marketing compensation, models.

 

1) Pay per sale (PPS)

 

Over 90% of affiliate programs online are using the PPS compensation model. The affiliates are paid only when they complete the sale. The process goes like this that affiliates promote products or services affiliate links. They drag the users to the merchant's product page through this unique affiliate link. When the user buys a product or service then the affiliate is paid some compensation. This is the most commonly used compensation model all over the online world.

 

2) Pay per action (PPA)

  This affiliate marketing compensation model is also known as pay per acquisition, pay per lead, or pay per conversion. In this model merchants pay affiliates for making their visitors perform some particular action that is most important for the merchant. This action can be filling a form, submitting an email address, putting zip-code, creating an account, signing up for a newsletter, or to download an e-book.

 

In this model initial sale is not important for the merchant and the affiliate. The best way to earn money for an affiliate is to just send targeted traffic to an affiliate link. The basic concept of this model is just lead generation. The merchants will use these leads for their email marketing. As you know email marketing is also the other main source of online marketing. 

 

Pay per action includes two compensation models that can occur in affiliate marketing.

 

l Pay per call

  Merchants pay affiliates to drag targeted traffic to the merchants and make them call them for their business inquiries. Just like clicks are tracked these calls are also tracked by the technologies used by the merchants. This compensation model is useful for mobile users as mobile users are increasing day by day.

 

l Pay per install/download

  Another way to promote their business and get targeted traffic to their product page or service is to pay per install or download. Merchants pay affiliates to promote their apps or books. Affiliates make users install their apps for testing purposes. 

3) Pay per click (PPC)

  This is another amazing compensation model in affiliate marketing. This payment method is mostly used in SEM (Search engine marketing). Merchants pay affiliates for bringing real legitimate clicks to their offer.

 

In this method, there is not any restriction that how many clicks affiliates bring to merchants. This model is also used in Amazon marketing. Many affiliates try their best to choose those offers which have a high PPC rate because in this way they can get or earn high income on every click they generate from all over the world. The click rate is based on location also. Top tier countries like the USA, U.K, Australia, New Zealand have a high rate and other low tier countries have low rates.

 

4) Pay per mile (PPM)

 Pay per mile or pay per thousand impressions is also used in search engine marketing. Many merchants also offer this compensation model to many affiliates on their networks. The affiliates will be paid against thousands of impressions that they generate from their marketing efforts.

 

Conclusion:

  Affiliate marketing is a performance-based marketing. Both merchants and affiliates use this marketing for their best results. A good affiliate will always focus on real and solid ways of promoting their products and offers. Don’t use shortcuts or cheat anyone. Just give value to your targeted audience. Solve their problems by providing some valuable offers and products then only then a good affiliate can earn a lot of money from affiliate marketing and take this as a full-time job.

 

PPS (pay per sale) is the most commonly used model and every affiliate will always focus on this model for generating a high income from affiliate marketing. Many affiliates can earn huge income by promoting a high ticket affiliate product. 

 

PPA (pay per acquisition/ pay per lead/ pay per conversion) is also my favorite compensation method. It is the easiest method because I think in this method affiliates don’t feel the pressure or burden of generating sales. Because our task is only to bring the legitimate and real lead to the merchant. Our marketing effort is only for generating leads not sales. Sale is a headache for merchants. So I like and I suggest all new affiliates to promote such types of offers so that you can learn and start easily.