Introduction to Different Types of Affiliate Programs

Many of today’s merchants and company’s market their products online using affiliate programs. They use affiliate programs because they are cheap to implement and if done right they can have a high return in additional profit for the company. Not only companies like affiliate programs, but also affiliate marketers see it as a low cost method to make money online. (Affiliate marketers are people who promote other peoples products for a commission of the sales price.) There are many different types of affiliate programs on the internet and today we will look at some of them.

Most affiliate programs can be divided under the following three categories:

  • Pay Per Performance
  • Pay Per Click
  • Residual Income Affiliate Marketing Programs

1. Pay Per Performance (PPP)
Most company’s and online merchants use a form of Pay Per Performance (PPP) affiliate programs. The marketer only receives payment if the person refereed is taking a specific action. This action can be a purchase or a lead. The advantage for the companies is that the affiliates will spend their own money and time to promote the affiliated company’s products.

Two sub-categories of Pay Per Performance (PPP) affiliate programs are:

  • Pay Per Sale (PPS)
  • Pay Per Lead (PPL)

1.1 Pay Per Sale (PPS)
Pay Per Sale (PPS) affiliate programs are programs that only pay the marketer if the person referred by affiliate marketer makes a purchase. (For instance they purchase an information product from the website.)

1.2 Pay Per Lead (PPL)
Pay Per Lead (PPL) affiliate programs are a little different than Pay Per Sale (PPS) programs. In most cases only large companies use PPL programs, such as insurance or finance company’s like banks. The affiliate marketers will be paid a fixed commission whenever a visitor referred to the merchant’s website does a specific action, for instance fill out an online form or requested some type of other information.

2. Pay Per Click (PPC)
Pay Per Click (PPC) affiliate programs are very popular. PPC affiliate programs are one of the easiest affiliate programs for web publishers to make money online with. Most contextual advertising companies (for instance Google Adsense) make use of the PPC principle.

3. Residual Income Affiliate Marketing Programs
Normally an affiliate is only compensated if referred customer does something at that moment in time, but the nice thing of Residual Income Affiliate Marketing Programs is that the affiliate also gets compensated if the same customer takes another action at a later point in time.

For example a referred customer buys a book in the beginning of the year. The affiliate gets paid for that action. A few months later the customer goes back to the merchants website and buys another item and again the affiliate gets a paid a commission.

In Conclusion
As you can see there are many types of affiliate programs out there. Each affiliate program has its own drawbacks and advantages. Find out which will work best for your circumstances and start making money online as an affiliate. Take a look at the post “5 tips for selecting a good affiliate program to promote” for more info on how to pick a good affiliate program.

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One Response to “Introduction to Different Types of Affiliate Programs”

  1. CSA on March 23rd, 2009 13:10

    all kinds of business whether online or not has its own glitches and disadvantage. We just have to be sensitive and vigilant in order for us to meet our success and generate larege amount of money.