Affiliate marketing has been a growing business online for some time and it is increasingly becoming more and more popular. The main reason is that it has become a great source of income for affiliates and merchants alike. Due to the growth of the business, there are more merchants willing to sell their products online and this also creates more opportunities for affiliates. Since its conception, affiliate marketing has been evolving just as any other business, so several different modes or schemes for affiliate marketing are now in place.
Here, we will discuss briefly each of the different modes and schemes for affiliate marketing.
First of all there are two main branches of affiliate marketing, Pay Per Click (PPC) and Pay Per Performance (PPP). First with the most popular:
Pay Per Click marketing involves the interaction of the public and an advert, affiliates get a commission every time someone clicks an ad or a link from the affiliate’s site. For every click performed, this means a referral from an affiliate site transfers to the merchant’s site. The affiliate gets paid for each visitor an agreed amount of money.
Pay Per Performance marketing is a bit different and is preferred by the merchants. In this case, the merchant pays the affiliate only if the referral actually did something on the merchant’s website. This is why merchants like this type of marketing, because they only have to pay when they see an actual result. This result can be either a sale, which is also known as Pay Per Sale (PPS) or this can be a lead. A lead is when the referral fills out an application, or form required by the merchant, this subtype of marketing is called Pay Per Lead (PPL).
These are only ways of classifying affiliate marketing by its method of compensation; however there are other different types of affiliate marketing. These are classified by the organizational depth they have, they can be Single, two or multi-tier programs. In a single tier program, the affiliate works alone and the commissions he receives are a direct product from his work. But in Two and Multi-Tier programs the affiliate can have sub-affiliates, and those sub-affiliates can have more people below them.
They all work towards the same goal, and when the affiliate receives its commission he will also receive the commission from all the people working below him, and he will have to pay a commission to an affiliate above him if there is any. This can expand the income of an individual affiliate as there are many people working for the same product, but it is rare that the programs have many tiers.
There is one last type of affiliate marketing, called Residual Income. This happens when a referral, that already bought a product from the merchant, comes back again to buy further products. This will allow the affiliate to receive a commission for the subsequent purchases. The different types of marketing will work best for some merchants and some will need a different type. You have to analyze which one will be the best for your particular case.
