Affiliate marketing’s popularity continues to grow. There are many reasons for this, especially since the benefits of becoming involved in the business are better known then they once were. Merchants and affiliates alike see the many benefits available to them through affiliate marketing – merchants can advertise their wars in a very cost effective manner, while affiliates have a relatively easy way to generate an income online by making websites and producing content.

People are looking differently at the business model of affiliate marketing than they once did – rather than seeing it as a supplemental form of advertising or producing a revenue, it has now come to be seen as a primary means of advertising and for some affiliates, even as a career.

The question is really which type of affiliate marketing will bring you the best results? Are all programs the same? Do they all offer the same benefits? Are some programs better than others? There are a few different kinds of affiliate marketing programs, depending on how you choose to classify them. Basically, though, there are two types. Pay per click (or PPC) and pay per performance (or PPP)
• Pay Per Click (PPC) This is the most common type of affiliate marketing program and presents the easiest way for affiliates with small websites to earn an income. In this model, the affiliate is paid when a visitor clicks through the affiliate’s ads – whether or not a sale is made. However, the commission per click tends to be very small, much less than a dollar per click on average.

• Pay Per Performance (PPP) This model is popular with merchants and is the most potentially lucrative for affiliates. In this type of affiliate program, the affiliate is paid only when the visitor performs a specified action; usually making a purchase, though in some cases for signing up on a mailing list or other action. This is the best value for the merchant and for a truly dedicated affiliate, can bring in a lot of money – since commissions tend to be 15-20% of sales (but digital products are typically a lot higher 50%+).

Pay per performance affiliate marketing can then be classified into two subtypes: pay per sale (PPS) and pay per lead (PPL).

Pay Per Sale (PPS) In the pay per sale model of affiliate marketing, an affiliate is paid a flat fee or a commission each time a visitor that they have directed to the merchant’s site makes a purchase. Regardless of whether this is a commission of a flat fee, it is almost invariably higher than in a pay per click program.

Pay Per Lead (PPL) Pay per lead is a variant of the pay per sale model and is used most commonly by finance and insurance companies; any company which relies heavily on leads to grow their business will be likely to us pay per lead affiliate programs. In these programs, the affiliate is paid when a visitor they have referred signs up, fills out an application or some other action which lets them be counted as a lead for the company. These models generally pay the affiliate a flat fee along the lines of those seen in a pay per sale program.

Other than these three types of affiliate marketing programs, there are other kinds of programs as well. They can also be classified based on whether affiliates can be paid for referring other affiliates to the program; these can be termed as single tier, two tier or multi tier programs. There are also residual programs, where the affiliate is paid every time one of their referrals makes a purchase from the merchant’s website.

• Single-Tier, Two-Tier, and Multi-Tier Affiliate Marketing These types of affiliate marketing programs pay affiliates based on not only customer referrals, but also for finding other affiliates to market thee merchants’ products and services. A single tier system is the conventional model, where affiliates are paid only for their own customer referrals.

• In a two tier affiliate marketing program, affiliates are paid for their own referrals as well as those brought in by affiliates who they have referred to the program. Multi tier affiliate marketing programs work the same way, but on a larger scale and over multiple tiers.

• Residual Income Affiliate Marketing In residual income affiliate marketing, the affiliate is paid each time a customer they have referred to the merchant returns to the merchant’s site and makes a purchase. These programs pay either a flat fee or on a commission basis.

These different types of affiliate marketing work differently for affiliates and merchants and each has its own benefits. Which type is best for you? That’s up to you to decide.