type-of-affiliate-marketing

There are many different Types Of Affiliate Marketing programs that can be made. The main factor that determines which program is the best for the market, the products to be sold or website traffic. In this article we will look at 30 different types of affiliate marketing, each with their own advantages and disadvantages, what they are good for and how they can be used in various circumstances.

1. Cost per sale

Incentive: The merchant pays a portion of sales to affiliates for each sale they generate. This is a very simple type of affiliate marketing set up that does not come with too much bureaucracy.

For a small business that has a low number of products or a low turnover, this is a great way to get started. The setup costs will also be lower and it will usually require very little effort from the company to track sales and pay affiliates.

Downside: The payout to the affiliate may not be too high because of the scale of the business, or because they are trying to maintain a certain level of margin on their products. It also means that if you don’t make any sales, you get nothing.

2. Cost per action

Incentive: The merchant pays a portion of sales to affiliates for each sale they generate. This is a very simple type of affiliate marketing set up that does not come with too much bureaucracy.

Downside: It is sometimes hard to tell whether a sale was generated by an affiliate or not, so there may be a risk in the merchant not being able to pay their affiliates for certain sales.

3. Cost per mille / cost per click (CPM)

Incentive: Affiliates are paid based on the number of people who view their adverts and subsequently click on them. Usually the higher the click through rate of the affiliate’s ad, the more they will get paid.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

4. Pay per action / Pay per sale (PPA)

Incentive: The merchant pays their affiliates based on a certain number of sales or leads they generate within a specified period of time. The main incentive for affiliates in this type of marketing is the two-tier commission payment structure.

Example, an affiliate will receive $10 when they generate a sale for the merchant. They will also receive $2 when the customer referred by them makes their first purchase, and another $2 when they make their second purchase. Due to this type of structure, each affiliate acts as an ambassador for the business; they are incentivized to promote that business and keep bringing it new customers.

Downside: A common issue with PPA affiliate marketing is that the merchants are not able to monitor how many sales their affiliates are generating. Often this type of marketing is only suitable for businesses with a very good reputation.

5. Cost per success (CPOS) / Cost per action / cost per conversion (CPC)

Incentive: Affiliates are paid based on the number of people who view their adverts and subsequently click on them. Usually the higher the click through rate of the affiliate’s ad, the more they will get paid.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

6. Cost per action / cost per conversion (CPA/CPC)

Incentive: Affiliates are paid based on the number of people who view their adverts and subsequently click on them. Usually the higher the click through rate of the affiliate’s ad, the more they will get paid.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

7. Cost per sale (CPS) / Cost per action (CPA)

Incentive: The merchant pays a portion of sales to affiliates for each sale they generate, but doesn’t pay affiliates for each click on their advert. On the flip side, affiliates are paid based on the number of people who view their adverts and subsequently click on them. Usually the higher the click through rate of the affiliate’s ad, the more they will get paid.

Downside: It requires affiliates to try and attract as many clicks as possible. It is also important for merchants to try and ensure that the sales they generate are legitimate sales, so there may be additional fees involved.

8. Cost per view (CPV)

Incentive: Affiliates are paid per thousand views on the advert that they create. Adverts that are placed on websites with high volumes of traffic can be very profitable for affiliates if they generate enough clicks. Payouts usually depend on the kind of advertising network used by the merchant (for example Google AdSense, Federated Media etc.). There will most likely be a minimum payout threshold before an affiliate is able to request payment.

Downside: The affiliates are paid per thousand views, so if the advert receives 100,000 views but only 10 people click on it, they will only get paid once. This type of marketing requires a high volume of traffic to be profitable for affiliates. It is also important for merchants to try and ensure that the sales they generate are legitimate sales, so there may be additional fees involved.

9. Cost per install (CPI)

Incentive: Affiliates are paid per installation of the software or app that has been advertised by them. If an affiliate refers an app in an app store it needs to be downloaded by someone else in order for them to get paid.

Downside: Sometimes it can be difficult to find affiliate partners who will allow their product to be advertised this way.

10. Cost per lead (CPL) / Pay per lead (PPL)

Incentive: The merchant pays affiliates for each person that shows interest in their business through the affiliate’s advertising campaign. The merchant may pay a fixed rate for each lead generated or may pay affiliates on a CPA/CPL basis, depending on the agreement they have with their affiliates. Typically this type of payment is used by MLM companies, but is also sometimes used for other types of business.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

11. Pay per lead (PPL)

Incentive: The merchant pays affiliates for each person that shows interest in their business through the affiliate’s advertising campaign. The merchant may pay a fixed rate per lead generated or may pay affiliates on a CPA/CPL basis, depending on the agreement they have with their affiliates. Typically this type of payment is used by MLM companies, but is also sometimes used for other types of business.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

12. Pay per appointment (PPP) – commonly used by lead generation companies – PPA/CPL/CPS/CPI

Incentive: Affiliates are paid based on the number of people who show interest in their business through the affiliate’s advertising campaign. The merchant may pay a fixed rate per appointment generated or may pay affiliates on a CPA/CPL basis, depending on the agreement they have with their affiliates. Typically this type of payment is used by lead generation companies.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

13. Pay per click (PPC)

Incentive: Merchants pay affiliates for each click on their advert. Usually the more clicks that the ad generates, the more an affiliate will earn.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing. With Pay per click advertising, merchants need to ensure that they cover all their bases in terms of ensuring that they attract enough clicks and converting those clicks into sales.

14. Pay per call (PPC)

Incentive: Merchants pay affiliates for each phone call to the advertised telephone number. These phone calls are generally generated via telephone marketing. The affiliate earns a commission based on the length of the call and/or the value of any product sold during the call.

Downside: Calls may need to be monitored, recorded or reported in order for affiliates to get paid (especially if contact is made with them). This type of marketing can also cause privacy issues for both agents and customers if it is not effectively managed by both parties involved.

15. Pay per email (PEM) – commonly used by email marketing companies – PPC/CPC

Incentive: The merchant pays affiliates for each person who opens an email sent through their advertising campaign. Sometimes the affiliate’s commission payment is based on the number of people who receive the email and sometimes they are paid on a ‘per email opened’ basis. The more people that open an email, the more an affiliate will earn.

Downside: Every affiliate will need to establish and maintain a list of people that they can send emails to in order to receive payments, which may require them to pay for this themselves. Also, if the majority of the affiliates’ compensation is based on the number of emails sent, they may need to send a large volume of emails in order to generate enough revenue.

16. Pay per lead (PPL)

Incentive: The merchant pays affiliates for each lead that is generated from their advertising campaign. A lead could be an email address which is collected by an affiliate, or a sale made through an affiliate’s advertising campaign. Sometimes this type of payment is also referred to as ‘pay per sale’ or ‘pay per action’.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

17. Pay per view (PV)

Incentive: The merchant pays affiliates for every page on their website that is viewed by a visitor, excluding any pages where content is viewed, but not read. This type of payment is used in the adult entertainment industry and by book publishers.

Downside: PPL/CPL/CPS/CPI methods are better suited for this type of payment as affiliates may have to pay out more money to get visits to their website if they’re only being paid on a per page view basis.

18. Pay per action (PPA) – commonly used by affiliate networks – CPS/CPI

Incentive: Affiliates are paid based on the number of people who show interest in their promotion through their advertising campaign. The merchant may pay a fixed rate per action generated or may pay affiliates on a CPA/CPL basis, depending on the agreement they have with their affiliates. This type of payment is generally used by affiliate networks, but is also used by lead generation companies and sometimes by direct advertisers (merchants).

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

19. Pay per sale (PPS) – commonly used by affiliates – CPI/CPA/CPL/CPI

Incentive: Affiliates are paid based on the number of sales that are made through their advertising campaign. This payment is usually used by direct advertisers (merchants).

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

20. Pay per lead on first sale (PPLOS) – commonly used by affiliates – CPA/CPL/CPI

Incentive: This type of payment is commonly used by affiliates of direct advertisers (merchants) and means that affiliates are paid for each lead, who makes their first purchase through the affiliate’s website. In most cases, the affiliate is paid twice – once when they make a sale and another time when they receive their first payment from the merchant.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

21. Pay per impression (PIII) – commonly used by magazine publishers – CPI/CPA/CPL/CPI

Incentive: Affiliates are paid based on the number of times the publication is viewed through an advertising campaign. This payment method does not usually include any sales made through an advertising campaign (this might be because it’s considered to be too similar to CPA). This payment method is usually used by magazine publishers to incentivize subscriptions. Although this is not technically considered to be ‘pay per click’ since the publisher will only pay for views, it’s similar in that the publisher pays for impressions (views) without having to worry about whether the viewer has an opportunity to click through.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

22. Pay per sale on first sale (PPSOS) – commonly used by affiliates – CPA/CPL/CPI

Incentive: This type of payment is commonly used by affiliates of direct advertisers (merchants) and means that affiliates are paid for each lead, who makes their first purchase through the affiliate’s website. In most cases, the affiliate is paid twice – once when they make a sale and another time when they receive their first payment from the merchant. This method is similar to PPLOS but there is no limit to how many times a lead can be paid on their first sale.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

23. Pay per click (PPC) – commonly used by direct advertisers (merchants)

Incentive: Using this method, merchants pay affiliates for every click they receive on their advertising campaign. The advertiser can either pay a fixed rate per click or will pay affiliates on a CPA/CPL/CPI basis, depending on the agreement they have with their affiliates. This type of payment is generally used by direct advertisers (merchants). If the merchant opts to only pay per click, they will use Google AdWords to administer their advertising campaign.

Downside: PPC is suitable for all products, services and markets; however it’s very dependent on what the advertiser is trying to achieve. PPC campaigns can be very complex and, depending on the scale and complexity of the advertising campaign, it can be very time-consuming to manage.

24. Pay per click on first sale (PCLOS) – commonly used by affiliates – CPL/CPI

Incentive: This type of payment is commonly used by affiliates of direct advertisers (merchants) and means that affiliates are paid for each lead, who makes their first purchase through the affiliate’s website. In most cases, the affiliate is paid twice – once when they make a sale and another time when they receive their first payment from the merchant. This method is similar to PPLOS but there is no limit to how many times a lead can be paid on their first sale.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

25. Pay per action (PPA) – commonly used by direct advertisers (merchants) – CPI/CPL/CPI

Incentive: Using this method, merchants pay affiliates for every action they take on their advertising campaign. The advertiser can either pay a fixed rate per action or will pay affiliates on a CPA/CPL/CPI basis, depending on the agreement they have with their affiliates. This type of payment is generally used by direct advertisers (merchants). If the merchant opts to only pay per action, they will use Google AdWords to administer their advertising campaign.

Downside: PPA is suitable for all products, services and markets; however it’s very dependent on what the advertiser is trying to achieve. PPC campaigns can be very complex and, depending on the scale and complexity of the advertising campaign, it can be very time-consuming to manage.

26. Pay per call (PPC) – commonly used by direct advertisers (merchants)

Incentive: Using this method, merchants pay affiliates for every phone call they receive through an advertising campaign. The advertiser can either pay a fixed rate per call or will pay affiliates on a CPA/CPL/CPI basis, depending on the agreement they have with their affiliates. This type of payment is generally used by direct advertisers (merchants). If the merchant opts to only pay per call, they will use Google AdWords to administer their advertising campaign.

Downside: PPC is suitable for all products, services and markets; however it’s very dependent on what the advertiser is trying to achieve. PPC campaigns can be very complex and, depending on the scale and complexity of the advertising campaign, it can be very time-consuming to manage.

27. Pay per chat (PPC) – commonly used by direct advertisers (merchants)

Incentive: Using this method, merchants pay affiliates for every chat they have through an advertising campaign. The advertiser can either pay a fixed rate per chat or will pay affiliates on a CPA/CPL/CPI basis, depending on the agreement they have with their affiliates. This type of payment is generally used by direct advertisers (merchants). If the merchant opts to only pay per chat, they will use Google AdWords to administer their advertising campaign.

Downside: PPC is suitable for all products, services and markets; however it’s very dependent on what the advertiser is trying to achieve. PPC campaigns can be very complex and, depending on the scale and complexity of the advertising campaign, it can be very time-consuming to manage.

28. Pay per call on first sale (PCLOS) – commonly used by affiliates – CPL/CPI

Incentive: This type of payment is commonly used by affiliates of direct advertisers (merchants) and means that affiliates are paid for each lead, who makes their first purchase through the affiliate’s website. In most cases, the affiliate is paid twice – once when they make a sale and another time when they receive their first payment from the merchant. This method is similar to PPLOS but there is no limit to how many times a lead can be paid on their first sale.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

29. Pay per click on first sale (PCLOS) – commonly used by affiliates – CPL/CPI

Incentive: This type of payment is commonly used by affiliates of direct advertisers (merchants) and means that affiliates are paid for each lead, who makes their first purchase through the affiliate’s website. In most cases, the affiliate is paid twice – once when they make a sale and another time when they receive their first payment from the merchant. This method is similar to PPLOS but there is no limit to how many times a lead can be paid on their first sale.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

30. Pay per call on first sale (PCLOS) – commonly used by affiliates – CPL/CPI

Incentive: This type of payment is commonly used by affiliates of direct advertisers (merchants) and means that affiliates are paid for each lead, who makes their first purchase through the affiliate’s website. In most cases, the affiliate is paid twice – once when they make a sale and another time when they receive their first payment from the merchant. This method is similar to PPLOS but there is no limit to how many times a lead can be paid on their first sale.

Downside: This method of payment is not suitable for all products or services and is very dependent on what an advertiser is trying to achieve. If the merchant is promoting a very specific product that will only be suitable for a target audience, it will probably not be cost effective to use this type of marketing.

Leave a Reply

Your email address will not be published.

You May Also Like

Affiliate Marketing Definition, How to Start & Example – 2022

Affiliate marketing is the use of different types of marketing to generate…