Affiliate marketing is an area that not many people are familiar with. What it is, is a lucrative business that many individuals are taking on as a main source of income or as a side business. Finding the right product to promote is incredibly necessary for any kind of success as well as profits with affiliate marketing ventures.
The payment methods in affiliate marketing is quite the attraction for many online entrepreneurs because the sum of the methods of payment used by various affiliates differ in compensation structure, payout thresholds, and commission percentages. Each method has its own distinct advantages and disadvantages and online marketers weigh each of them to find a suitable vendor affiliate with a payment method that they really like and feel confident about.
Over 80 percent of most all online affiliate programs use the cost per sale or the revenue share method as their compensation platform. This involves distributing the payout based on the profit made from each sale or a portion of the sale. The other 19 percent of affiliates use the cost per action method of which payouts are distributed based on the customer’s actions. The remaining 1 percent uses methods other than CSP or CPA to generate their payment structure. There are several successful payout methods that affiliate marketers use to manage their business.
Click Per Impression (CPM)
The CPM type of payout is probably the most popular of all in the affiliate marketing payment methods. All that is required for payout to the affiliate is that the publisher loads the advertising onto his website, allowing his visitors to view it in order to get paid. CPM is used as the primary method of compensation by Google for their products including Adsense and Adwords. Although this type of compensation is not as popular or as lucrative as it was due to fraudulent activity, it is still a system that a lot of advertisers use and still many bloggers prefer.
Pay-Per-Click (PPC or CPC)
CPC differs in CPM because in order for the affiliate to be compensate, the visitor must go one step more and actually click on the link and visit the advertiser’s website for the affiliate to be paid. In this type of program, the publisher is concerned about drawing traffic to the site and not whether or not the customer purchases. The affiliate has already made his commission once the customer clicks on the link.
Click Per Action (CPA)
The method of compensation via Click Per Action requires the customer to click on the link and make a purchase before the affiliate will be compensated. Since marketing the products and ensuring the sale of items leans heavily on the advertiser, this type of compensation method is not as common but is certainly more lucrative than the others because of the additional steps to customer conversion and the skills necessary to motivate customers and promote the site.
So once all these methods are broken down, it’s not so scary right? Whether you choose CPM, PPC/CPC or CPA, the number one thing to remember is that you have to pick an affiliate and product that is right for you. If you don’t have confidence or passion about what you’re marketing, you won’t succeed at all.
aatif (8)
Sathish @ TechieM... (8)
Crunchynow (7)
Siva (7)
Blog Tips (6)
Charleston Marketing (6)
I am new to affiliate marketing. Need to learn many more things. I guess CPA pays best but u need to be good marketer to sell products directly.
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Shiva Chettri Reply:
June 23rd, 2010 at 4:17 pm
I too have just started playing with affiliate marketing. Yes CPA pays the best but as you said we need to be a good Marketer to convert on the products
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I like Click Per Impression , because it easy make money at most
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Shiva Chettri Reply:
June 23rd, 2010 at 4:17 pm
You mean CPM, yes it is a good way of leveraging your traffic
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i have also started working on that area and started a blog about it too
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Shiva Chettri Reply:
June 21st, 2010 at 5:11 pm
Ok got your URL
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Siva Reply:
June 21st, 2010 at 7:37 pm
Siva´s last blog ..Affiliate Marketing
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I always prefer a PPC or CPM based ad network over one that offers CPA based compensations. I must be too bad in affiliate marketing
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Shiva Chettri Reply:
June 23rd, 2010 at 4:18 pm
Well bro, CPM ad networks are good for starter bloggers like us since for affiliate marketing we need to have a good amount of traffic so that w can get conversions
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CPA is very lucrative as you said, but its not so easy, at least for me.
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Shiva Chettri Reply:
June 23rd, 2010 at 4:19 pm
It aint easy for others too bro, for CPA we need a lot of targetted traffic
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Siva Reply:
June 24th, 2010 at 6:44 pm
yup.. that too quality visitors and quality content otherwise they just ignore..
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blogging tips Reply:
June 27th, 2010 at 1:29 pm
CPA is easy and if you must be ready to loose traffic because its too irritative to do a survey to watch a video or a post.
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Shiva Chettri Reply:
June 27th, 2010 at 1:40 pm
Yup you are right, CPA is sometimes irritating because of its popups and surveys
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This is great but the real money would lie in combining technologies to your advantage. What I am trying to say is that I think you should use technology such as PPC to drive traffic towards your affiliate marketing site. The key is to do it in such a way that you get a good ROI. All traffic costs money so why not spend it wisely.
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CPA is a great way to create income. One the the most difficult issues with CPA’s is getting accepted into one of the networks. Most newbies will find this a challenge. Neverblue has been one of the easiest to get accepted into. Not sure if that is still true. To the newbie do not give up, persistence is everything. Matt
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I think the combination of PPC and CPA is good to drive traffic in a short term , however oragnic traffic is best for long term strategy
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Can we have another method of compensating affiliate apart from the normal method we are all used to.
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