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The Different Types Of
Affiliate Marketing

For merchants and affiliates alike, affiliate marketing is now considered as a main source of profits and revenues.

So the question now is what type of affiliate marketing will work best for you? Are all affiliate programs the same? Are the benefits the same? Or which affiliate program that work better than the others.
 

There are different types of affiliate marketing, and the number of types will depend on how one will classify them. The most basic affiliate programs can be put under two  categories.

1. Pay Per Click (PPC): PPC is the most popular type of affiliate marketing for small websites the easiest way for them to earn money. In this affiliate program type, the affiliate earns affiliate commissions whenever someone clicks through the merchant's banner or text ads even if the visitor he referred does not purchase anything from the merchant's site. However, typical affiliate commissions for PPC affiliate programs are small, usually not exceeding a dollar for every click.
2. Pay Per Performance (PPP): PPP affiliate marketing is the most lucrative type for the affiliates. In this type of affiliate program, the merchant only pays the affiliate whenever his referral translates into an action?that is the referral actually buys something from the merchant's site or becomes a lead. Affiliate commissions in PPP affiliate marketing usually comes in the range of 15% to 20% of the actual product sales. Some products in affiliate networks like ClickBank and PayDotCom pays as much as 75%!

Pay-per-performance (PPP) affiliate marketing can be further classified into two popular types: pay-per-sales (PPS) and pay-per-lead (PPL).

1. Pay Per Sale (PPS): In a pay-per-sale type of affiliate program, the merchants pay an affiliate commission to the affiliate whenever the visitor he has referred to the merchant's site actually buys something from the merchant's site. The affiliate commission paid is generally higher than the fee paid to affiliates in a pay-per-click affiliate program.
2. Pay Per Lead (PPL): The pay-per-lead type of affiliate marketing is a slight variation of the PPS type and is often used by insurance and finance companies and other companies who rely on leads for their company to grow. In this type of affiliate program, the affiliate is paid whenever the visitor he referred to the merchant's site fills up an application form or any similar form related to the business of the company. Affiliate commission for this type of affiliate program is based on a fixed fee whose rates approximate that of the fixed fee in the PPS type.

Aside from the above types of affiliate marketing, a lot of other affiliate marketing types exist. Based on the depth of the affiliate network, it can be classified as single-tier, two-tier, and multi-tier affiliate marketing.

Single-Tier, Two-Tier, and Multi-Tier Affiliate Marketing

These types of affiliate marketing are based on the different levels or tiers in the affiliate network by which payments are made. In a single-tier affiliate marketing program, the affiliates are only paid based on the direct sales or traffic he has referred to the merchant. All the previously mentioned affiliate marketing types (i.e. PPS, PPL, and PPC) fall under the single-tier classification.

In two-tier affiliate marketing programs, the affiliate is not only paid for the direct traffic or sales that he refers to the merchant's site, but also on every traffic or sales referred by various other affiliates who joined the affiliate program through his recommendation.

Multi-tier affiliate marketing works the same way, although the affiliate gets additional affiliate commissions for a wider number of affiliates in different tiers in the affiliate network.

Residual Income Affiliate Marketing

In residual income affiliate marketing, the affiliate gets paid not only once for every customer he has referred to the merchant's site. Rather, the affiliate is also paid for the recurring sales also from the same customer. Affiliate commissions for such type of affiliate marketing is based on either sales percentage commission or fixed fee basis.

The different affiliate marketing types would virtually work differently for merchants and affiliates alike, and each would generally have their own list of benefits. Which type of affiliate marketing will work best for you? It is not really for me to tell. Rather, it is for you to choose which type of affiliate marketing program will suit your needs and characteristics best.

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