It can get very confusing until you learn the terminology.
Some of the variations are below.
It will depend on the merchant or the affiliate network which type you will see so get familiar with them right away so you will choose smartly.
Pay Per Performance (PPP)
PPP is the one that the merchants prefer so you will see this type most often.
The merchant pays the affiliate when the required action is performed, such as a purchase or a new lead.
Pay Per Click (PPC)
PPC is the easiest way to earn money through affiliate marketing and also the hardest to get accepted to.
Your approval to their affiliate program is more rigorous.
When someone clicks your link or banner they are taken to the merchant’s site and you get paid a set amount for the click.
They do not need to purchase anything for you to make money.
These are also the hardest to find when you are new to affiliate marketing.
It will take some searching and applying to many programs individually or through an affiliate network to find some to start out with.
Otherwise, if you are denied save it for later and re-apply when you have more traffic.
The amount per click is usually small also, so it will only truly be beneficial when you have a lot of traffic.
This is also why the merchants are picky in approvals.
I say “more is more” in regards to how many affiliates you have in your program but they don’t look at it the same way.
(Not to be confused with Pay Per Click advertising through sites like Google Adsense. Whole different ball-game.)
Pay Per Sale (PPS)
You get your commission only if the person purchases the product.
They click through your link and a cookie is set on their browser.
Even if they do not purchase immediately, if they go back that cookie will register their sale at a later date and you will receive the commission.
Cookies vary in length of time. Some merchants have cookies that last a year (Wealthy Affiliate) and some only last 24 hours (Amazon).
Of course, your commission rate will also vary.
Some pay a percentage of the sale (plus the upsells) and others pay a flat rate.
There are also recurring commissions.
If for instance, the customer clicks on a link for a membership to something you will receive commission as long as that person remains a member.
Pay Per Lead (PPL)
this is mostly when they sign up with the merchant.
Your link or banner takes them to the site and they fill out a contact form, possibly for free ebook, or a newsletter.
This is basically a way for the merchant to get leads to generate new business and new sales down the road.
Cost Per Click (CPC)
As the name implies you are paid for the click – once on the merchant page the sale is left to them. You just need to get the click.
Cost Per Lead (CPL)
This one is where they fill out a form and generate a new lead for the merchant.
Cost Per Action (CPA)
This is a specific action that the merchant wants. It could be a download a survey, etc.
Cost Per Sale (CPS)
And of course once they click it leads to a sale either right then or when then purchase at a later date recorded by the cookie left on browser.
Pay Per Call (PPCall)
For each call made through your affiliate ad you are paid a rate by the merchant.
The rate is determined generally by the number of calls made by the people who call from your ad.
Some PPCall pay per call OR per impression or per conversion.
Single-Tier, Two-Tier, and Multi-Tier Affiliate Marketing
Single-Tier – you get paid a commission for the action required by the merchant that the customer does.
The above types fall under this category, PPC, PPS, AND PPL. It could be a one-time purchase or recurring fee but you only get paid from YOUR referral.
Two-Tier – this one you get paid the commission for your traffic and sales and also a commission on your referrals traffic and sales in the merchants program.
Multi-Tier – this one works the same as two-tier but of course there are multiple tiers.
Customer clicks link on your site and buys product.
Customer then becomes an affiliate of that same merchant and their customers click through and generate a commission for both of you.
Then their customer joins the program and send traffic to the site making you, your original referral and themselves a commission.
Sometimes the commission will be written as tier1/tier2 (ex. 10%/5%).
You will need to read all the fine print on the tier programs. Some will pay a percentage of revenue obtained by your referral but they may also may only pay a percentage of a percentage.
In other words – If product is $10.00 and commission is 50% then the first scenario will pay you the percentage of the $10.00 the same as your referral.
In the second scenario they pay a percentage of the affiliate’s percentage or 25% of the 50% your referral received.
Recurring billing and multi-tier affiliate marketing are the two to aim for to generate passive income monthly once you do the work up front by writing content, getting your own leads (email list).
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