4 Different Types of Affiliate Marketing Revealed

Today, affiliate marketing has become very popular. There are number of reasons. One of the most probable reasons could be that a lot of people are more clearer of the benefits of affiliate marketing than they were before.

Both the merchants and affiliates know that affiliate marketing can work for both of them.

Web merchant sees affiliate marketing as a opportunity to advertise their products and services at cost-effective way.

The affiliates, on the other hand, sees affiliate marketing as a tool for making money online by doing things they like the most – i.e. creating websites, reviewing products and services they use/like, and providing useful and relevant content on their site.

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The people’s outlook about affiliate marketing has shifted just as its popularity has soared into greater heights.

Today, affiliate marketing is no longer considered as an “alternative” way for the web merchant to advertise his/her products, or a passive income generating strategy. For both affiliates and the web merchants, affiliate marketing has become the “main” source of income and revenues.

So the million-dollar questions you must ask are:

  1. What type of affiliate marketing should I choose and enter?
  2. Are all affiliate marketing the same?
  3. Are the benefits the same?
  4. Or, are there certain type of affiliate marketing programs that work better than the others?

There are number of types of affiliate marketing out there. The number, however, depends upon how you will ‘classify’ them. The most fundamental/basic affiliate marketing programs, however, fall under two categories: Pay-per-click, or PPC and Pay-per-performance, or PPP.

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Type #1: Pay-per-click, or PPC

PPC is the most popular type of affiliate marketing available for affiliates who run small websites, have small budget, and are probably looking for the easiest way of earning money online.

In this particular affiliate marketing type, the affiliate gets paid whenever he refers a visitor on web merchant’s website. Or, whenever a visitor clicks through the merchant’s banner and text ads displayed on affiliate’s site.

In this type of affiliate program, the affiliate gets paid by the merchant a certain amount even if they (the visitors) do not purchase anything from the merchant.

But, the payments for PPC affiliate programs are usually small – i.e. not exceeding a dollar for every click.

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Type #2: Pay-per-performance, or PPP

PPP affiliate marketing program is considered to be the most popular and lucrative type for both merchant and the affiliates.

In this type of affiliate model, the affiliate gets paid by the merchant only when his referral actually translates into a customer – i.e. whenever the referral purchase something from the merchant’s website or when the visitor becomes a lead.

This way, the merchant saves a lot of money on advertising. For dedicated affiliate, this model can become the most lucrative type of business as the commissions in PPP affiliate marketing is usually in the range of 15% to 20% of the actual product price.

The pay-per-performance affiliate marketing can be further broken down into two popular affiliate-marketing types: pay-per-sales, or PPS and pay-per-lead, or PPL.

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Type #2.1: Pay-per-sale (PPS)

In a pay-per-sale affiliate model, the merchant pays the affiliate only when his referral makes a purchase on the merchant’s site. Affiliates are usually paid a fixed amount of fee as commission. The paid amount is also usually higher than the commission paid in the pay-per-click affiliate program.

Type #2.2: Pay-per-lead (PPL)

The pay-per-lead affiliate-marketing model is slightly different from the PPS type. Finance and insurance companies and other companies that rely on ‘leads’ for their company to grow often utilize it.

In this affiliate marketing type, the affiliate gets paid whenever his referral fills up an application form or any other similar form related to the business of the company.

Related article: Does 2-Tier Affiliate Program Really Work?

The affiliates, in return, are paid a certain amount of fixed fee as commission. The fixed fee in the PPL type is equivalent to that of the PPS type.

In addition to these three types of affiliate marketing models, there are also other types that 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 networking program.

There is another type of affiliate marketing program that pays the affiliate every time his referral buys something from the merchant’s website.

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Type #3: Single-Tier, Two-Tier, and Multi-Tier Affiliate Marketing

These affiliate-marketing types are based on the various levels or ‘tiers’ in the affiliate network by which payments are made.

In the single-tier affiliate program, the affiliates get paid only on the direct sales or traffic referred to the merchant’s site. All the affiliate-marketing types mentioned above (PPS, PPL, and PPC) fall under the single-tier affiliate marketing type.

In the two-tier affiliate marketing program, on the other hand, the affiliate is only when his referrals make a purchase or visits on the merchant’s website, but also on every traffic or sales referred by other affiliates who joined the affiliate program from his referral.

Related article: Drive ‘Laser-Targeted Traffic’ Using Yahoo Search Markeing (YSM)

The Multi-tier affiliate marketing program works similar way, only the difference is that the affiliate gets extra bonus for creating a wider network of affiliates in different tiers in the affiliate network.

Type #4: Residual Income Affiliate Marketing

In residual income affiliate marketing, however, the affiliates receives a paycheck only once for every referral he drives to the merchant’s website. In addition, he also receives a paycheck whenever the customer that he referred returns to the merchant’s site and make another purchase. The commission paid on such affiliate marketing type is based on either percentage commission or fixed fee basis.

Related article: How to Create Multiple Streams of Affiliate Marketing Income

Conclusion: The Different Types of Affiliate Marketing

All these different types of affiliate marketing model will work differently for both the merchants and the affiliates alike. Each type usually has their own set of benefits. Therefore, I cannot really tell you which affiliate marketing is best for you. Rather, you need to choose the type of affiliate marketing program that will best suit your needs and personality the best.

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