Payment models in affiliate marketing

Affiliate marketing attracts newcomers by the fact that you can make money from advertising other people’s products. The concept of affiliate marketing looks attractive, but it is unlikely that you can make a stable profit in a few days. Any webmaster who has a source of target traffic can make money on affiliate links. The only thing to do is choose the appropriate offer, set up advertising tools, and work to increase conversions.

Pay per click affiliate links

A CPC affiliate program is a model where your payout depends on the number of clicks you get for a link, banner, or text. CPC is rarely seen in affiliate programs because the cost per click is usually low.

PPC or PPV, which is better?

Many advertising networks, in addition to paying for clicks, offer a payment scheme for pay-per-view affiliate programs. That is, they do not pay for the fact that a person clicked on a banner, but simply for the fact that they visited the page with the promotional material. At first glance, it seems that this is more profitable.

However, the rates under this model are so low that in most cases the money does not amount to much. Only in some cases is it worth considering this option — when there is a lot of not-the-highest-quality traffic. However, you need to test each site individually.

Cost Per Action

CPA (Cost Per Action) is an advertising model in which an advertising platform (promotion channel) receives payment from an advertiser only for certain user activity on a promoted resource. Actions are understood to mean switching to a specific page, browsing a certain number of pages, filling out a form, participating in a survey, buying a product, downloading a file, installing a program, etc. A CPA affiliate program is beneficial for the advertiser, as payment is made only for a significant result.

CPA affiliate marketing types:

• CPO (Cost Per Order) — a fixed fee per order placed.
• CPI (Cost Per Install) — the pay-per-install affiliate model for an application (program).
• CPL (Cost Per Lead) — one of the popular models for advertisers: pay per visitor and their contact information.
• CPS (Cost Per Sale) — payment for the paid purchase (as a rule, a % of the check). This affiliate revenue model protects the advertiser from unnecessary waste of money, but the price of triggered online advertising is quite high. Often the work on this payment system involves deferred payment of a commission.
• CPD (Cost Per Download) — payment for one file download.

Choosing a CPA toolkit

Every affiliate program has an obligatory attribute — an advertising toolkit, which allows the webmaster to attract visitors to the affiliate site. Let’s consider the most popular of them:

• Affiliate link — always available on the partner’s offer (offerer) description page. The received link can be inserted on your website, mailing list, group on social networks, or used in ads for contextual and banner advertising systems.
• A banner — a classic online advertising tool that leads to your partner’s page. As a rule, the banner already has an affiliate link prescribed. Usually, the most popular sizes of banners are available.
• Teaser — a text link with a picture.
• Rotator — a script that displays banners and teaser blocks from a predefined list.
• A commodity feed — an XML or CSV upload of the selected products. All links to products in the feed contain affiliate IDs. You can easily create your own affiliate store, product catalog, or simple storefront based on it.

Types of traffic

Traffic is a flow of users — the people you bring to the advertiser who have committed targeted actions. Traffic is divided into free and conditionally free. The latter does not need to be purchased or paid for by clicks or displays — for example, SEO-optimized sites, and one’s own groups and communities on social networks. These are resources you invest in not through traffic purchases, but through the development of the site. The paid option comes into play when the webmaster has no displays of their own and traffic needs to be purchased — this is, say, targeting or contextual advertising, teaser, and banner networks.

About business models

In this section, we talk about the main types of sites and models from which you can attract traffic, and then “pour” it to advertisers. An affiliate business model is a model for promoting goods and services using various sources of traffic. Here’s what they are:

• Different sites: online stores, showcase sites (catalogs), including financial showcases, dropshipping stores, weblinks, information portals of any subject, price comparison services — anything you can think of.
• Cashback and loyalty programs — when a part of the money spent on a purchase is returned to the buyer.
• Coupons and promo codes.
• Arbitrage of traffic in social networks or contextual advertising networks. In this model, the webmaster buys traffic and sells it at a higher price — for example, buying ad impressions and reselling them to advertisers as target actions, clicks or purchases.
• Traffic arbitrage through targeted advertising on social networks.
• Content projects: blogs, forums, media projects. You can create your own platform or work on an already existing one by leaving affiliate links there.
• Email marketing: collections or personal newsletters.

This is not an exhaustive list. There are other business models: brokered traffic, White Label, retargeting. But that’s a story for more sophisticated webmasters.

Additional forms of payment

In addition to affiliate payouts for certain actions, advertisers pay big webmasters bonus rates. Advertisers realize that they get their main turnover and customer flow only from large webmasters — this is 70-80% of all traffic. That is why advertisers meet such webmasters halfway by making lucrative offers, increasing pay per lead, and paying extra bonus rates.

Some online stores offer a different incentive for webmasters. For example, an affiliate offers $10 per lead, and informs that if the webmaster, with the help of attracted users and buyers, could sell more than $1000, they get a bonus of $10 for each accomplished lead — i.e., their earnings will increase by 20%. Not a bad incentive.

As you can see, there are many payment models in affiliate marketing. Each webmaster chooses their own model in which they start to work actively. Each of them has its own secrets, its own ways of working, its own advantages and disadvantages. Which one to choose is up to you. Test the traffic with one or another model, experiment, try it out. You are sure to find the most suitable payment model that will bring maximum earnings.

Conclusion

Whatever model you choose, always pay the closest attention to the working conditions. The various restrictions imposed by advertisers are strictly individual. You never know in advance which options for attracting traffic are allowed and which are not. And do not forget that the same site can bring huge profits on one model and show zero results on another. That is why we recommend you pay attention to the CPA affiliate network MelBet, which always offers favorable conditions.