As affiliate marketing is beneficial to both the merchant as well as the affiliate, this business model has become the most popular way to earn money online. There are different types of affiliate programs available and each of them has it’s own advantages and disadvantages. The main types of affiliate programs are — pay per sale, pay per lead and pay per click. They can be either flat fee or commission based. There are also single tier or multi-tier programs. The following is a discussion about the different types of affiliate programs:
(i) Pay Per Click: (PPC) programs are the most popular affiliate programs available. Here, the affiliate is paid when some visitor clicks on any of the merchant’s ads shown on the affiliate’s website. The payment is made even though the visitor does not buy anything from the merchant website. The payment from PPC programs are usually low and ranges from a few cents to a Dollar. Some major PPC programs are Google Adsense, Yahoo Publisher Network, Chitika etc.
(ii) Pay Per Sale: (PPS) programs are the most lucrative affiliate programs. Here, the affiliate is paid a fixed commission (generally a percentage of the sale price) each time a visitor referred by the affiliate, purchases something from the merchant website. The commission can be as high as 75%.
(iii) Pay Per Lead: (PPL) programs are also very profitable. Here, the affiliate is paid when a visitor referred by him fills up an application, completes a survey, signs up for a mailing list or does some similar action for the merchant. These programs are mainly used by finance and insurance companies. The affiliate is generally paid a flat fee per lead.
(iv) Single tier and multi tier: In single tier programs, the affiliate is paid only for the sales generated by him whereas in multi tier programs, the affiliate is also paid for recruiting new members. Here, the affiliate is paid a percentage of the sales generated by members recruited by him.
(v) Residual income programs: In residual income programs, the affiliate is paid each time a visitor referred by him, returns to the merchant website and purchases something. The payment is generally made as a flat fee or on commission basis.