Affiliate marketing programs has never been as
popular before as it is today. Why? There can
be a number of reasons. The most probable
reason, however, could be the fact that the
benefits of affiliate marketing have become
clearer to a lot of people now than they were
before.

Today, both the merchants and the affiliates can
see clearly that affiliate marketing can work for
both of them. The merchant sees affiliate
marketing today as the chance to advertise their
products at a lower cost. The affiliates, on the
other hand, sees affiliate marketing as an easy
way of earning profits online by doing what they
like most, and that is by creating websites.

Just as the popularity of affiliate marketing has
shifted into greater heights, so has the people's
outlook about it changed. No longer is affiliate
marketing considered today as an alternative
method for the merchant to advertise his
products, or as a source of additional income for
the affiliates. 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 marketing programs the same? Are the
benefits the same? Or are there affiliate
marketing programs that work better than the
others?

There are actually different types or classes of
affiliate marketing, and the number of types will
depend on how one will classify them. The most
basic affiliate marketing programs, however,
falls under two categories: pay-per-click (PPC),
and pay-per-performance (PPP).

• Pay Per Click (PPC)

PPC is the most popular type of affiliate
marketing for affiliates with small websites, and
probably the easiest way for them to earn money. 
In this affiliate marketing type, the merchant
pays his affiliate whenever a visitor is referred
to his site, that is whenever someone clicks
through the merchant's banner or text ads. The
affiliate gets paid a certain amount even if the
visitor he referred does not purchase anything
from the merchant's site. However, typical fees
for PPC affiliate programs are small, usually not
exceeding a dollar for every click.


• Pay Per Performance (PPP)

PPP affiliate marketing is the most popular among
merchant and is also 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 whenever the visitor he has
referred actually buys something from the
merchant's site or when the visitor becomes a
lead. This means a lot of savings for the
merchant. On the other hand, it becomes the most
lucrative type for the dedicated affiliate, for
commissions in PPP affiliate marketing usually
comes in the range of 15% to 20% of the actual
product sales.

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

o Pay Per Sale (PPS)

In a pay-per-sale type of affiliate marketing,
the merchants pay the affiliate a certain fee
whenever the visitor he has referred to the
merchant's site actually buys something from the
merchant's site. Affiliates are often paid on
commission basis, although other merchants would
opt to pay a fixed fee. But no matter what the
basis of the fee is, it is generally higher than
the fee paid to affiliates in a pay-per-click
affiliate program.

o 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 marketing, 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. Compensation for
this type of affiliate marketing is based on a
fixed fee whose rates approximate that of the
fixed fee in the PPS type.

Aside from these three specific types of
affiliate marketing, a lot of other affiliate
marketing types exist. If the classification is
based on the depth of the affiliate network, it
can be classified as single-tier, two-tier, and
multi-tier affiliate marketing. There is also
another type of affiliate marketing that pays the
affiliate each time the customer he has referred
purchases something from the merchant's site. 

• 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 commission 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 whenever the
customer he has referred returns to the site and
purchase another product. Compensation 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.


Warmly.

Ken Mathie.
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