Affiliate Marketing - What You Should Know

By Steve Seah  

Affiliate marketing is gaining popularity day by day because of the increasing consciousness amongst the masses about it. Merchants as well as the affiliates have realized that affiliate marketing proves beneficial for both of them. Affiliate marketing gives the merchant the opportunity to advertise their products at a low cost while the affiliates find affiliate marketing as an easy way to earn money online and that too by doing something that they could enjoy

The perception of people about affiliate marketing has undergone a sea change with the rising popularity of affiliate marketing. Today, no one considers affiliate marketing as an alternative method of advertisement of products by a merchant or as a source of additional income for an affiliate. As of now, affiliate marketing has become the main source of profits and revenues for many the merchants and affiliates.

Now, there can be a number of questions that could be asked about affiliate marketing. For example, what type of affiliate program should one opt for or does all affiliate marketing programs accrue the same benefit or are all the affiliate marketing programs the same deep down or are there affiliate marketing programs that prove to be more beneficial than the others.

It is true that there are different types of affiliate marketing but these types surely depend on the way one classifies them. However, fundamentally affiliate marketing programs can be classified into two heads-pay per click (PPC) and pay per performance (PPP).

PAY PER CLICK (PPC) AND PAY PER PERFORMANCE (PPP)

PPC is the most popular as well as the easiest way of earning money for affiliates having smaller websites. An affiliate gets paid when a visitor is referred to his site i.e. when a user clicks through the merchant's banner or text ads. This payment to the affiliate does not depend on whether the visitor makes any actual purchase on the merchant's site. Contrary to that, under PPP affiliate marketing the affiliate gets paid only if the referred visitor actually makes any purchase or if the referred visitor turns into a lead. Due to this difference, the returns on PPC for an affiliate would be comparatively less than PPP. PPP affiliate marketing is considered a better bet for both the merchant as well as for the affiliates.

Similarly Pay Per Performance (PPP) affiliate marketing has yet been classified into two categories: - pay per sales (PPS) and pay per lead (PPL). As the name suggests under the PPS system, the affiliate only gets paid if actual sales is made while under PPL affiliate system, the affiliate gets paid if the visitor fills up an application form or any such similar form related to business of the company. This kind of system is used by companies which depend on leads for their growth like finance and insurance companies.

SINGLE TIER, TWO TIERS AND MULTI TIER AFFILIATE MARKETING

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

These are different types of affiliate marketing programs depending on the depth of the affiliate network. If the affiliates only get paid on the basis of direct sales or traffic that he has referred to the merchant's site (for example-PPS, PPL and PPC), this kind of program comes under single tier affiliate marketing. Similarly, if he gets paid for the direct traffic that he has referred and also for every traffic or sales that has been made by affiliates recommended by him, he comes under the two tier affiliate marketing. In multi tier affiliate program, the affiliate gets paid like two tiers but besides that he also gets paid for other affiliates in different tiers in the affiliate network.

RESIDUAL INCOME AFFILIATE MARKETING

The affiliate gets paid not once but every time the referred customer makes a purchase on the merchant's site. The payment may be made as a fixed amount or as a percentage of the sale amount.

Thus, we find that there are a number of affiliate marketing programs and the choice that you make must depend on your own convenience and requirement.

Steve Seah is a corporate business manager learning entrepreneurship. Grab free reports and ebooks from his sites 

Article Source: EzineArticles expert=Steve_Seah