Affiliate Marketing Compensation Methods
The world of affiliate
marketing is a bit confusing at first. The payouts are usually described
by a number of abbreviations and it might take a little bit of reading
to actually understand how they all work. I'll do my best to explain the
various compensation methods now.
The first is a straight sales commission. This is known as either
revenue sharing or pay-per-sale. It is abbreviated as PPS. Some will
refer to it as cost-per-sale, or CPS. It just depends upon their
perspective in the terms. This occurs for all of the methods actually.
Sometimes it's listed as your pay and sometimes it's listed as their
cost. There's no real difference in the long run though.
This method of compensation is the easiest to understand. You'll just
receive a percentage of the referred customer's purchase. Amazon is one
of the bigger companies that offers such a program. If you refer a
person to their website for a purchase, you receive a set kickback
depending on the category and volume you provide. This should be pretty
easy to grasp. The big thing to remember is that this won't pay much for
small-ticket items. Some programs do offer revenue sharing for all of
the registered customer's future purchases though. This could really add
up to a sizable chunk of change.
The other primary type can be classified under pay-per-action (PPA)
or pay-per-lead (PPL). These are also called cost-per-action and
cost-per-lead programs. There is a bit of a gray area when it comes to
these programs. PPL can be just a set commission rate. If you signed up
as an affiliate for that parakeet training e-book mentioned on the
summary page, you would receive $4 for each good lead or action. In this
case, a valid lead or action would be the purchase of the book. PPL and
PPA cover another important area of affiliate marketing though. Many
websites just use affiliates to refer new members and sign ups. Take
those annoying ads that offer free ringtones or a free Xbox 360. Those
are run by several affiliates. The going rate is about 60 cents for
every new email address that is entered by a referred customer. There's
a full range of varying PPA programs available. Loan forms and insurance
quote forms are popular variants. Then you have the range of toolbars
that require a download for their action. In the end it doesn't really
matter what the specific program is. You just have to get your lead to
do something that they want.
You may be thinking that this is all well and good, but how do I get
the actual money. This is actually a pretty easy process. The company
you're working through will monitor your conversions and track your
earnings. At the next pay cycle, they'll pay in the format requested.
Direct deposit and checks are popular options. Some programs will offer
payouts through Paypal. This is basically just an online payment
processor that any Ebay user should be familiar with. Payments to Paypal
can be used to shop online or transfered via ACH to the bank of your
choice. |
