How Do Affiliate Programs Work?
How do affiliate programs work? Well, it depends on the type of affiliate program you are participating in. In this article, we take a look at the most common variations and how they work.
There are many different types of affiliate programs. We’ll cover the differences below, but there are similarities to all of them as well. The first similarity is they all have some act that the affiliate must cause visitors to take. This act might be a click through by a unique visitor to the program site, a newsletter sign up or the purchase of a product. In exchange, the affiliate receives revenue for each occurring act. Let’s look at an example.
Let’s assume I have a financial site providing monetary tips to people. I want to pick up as many signups to my newsletter as possible. I set up an affiliate program to do this. I tell every affiliate I will pay them $1 per sign up. If an affiliate sends a visitor to my site, but they don’t sign up for the newsletter, then the affiliate doesn’t get paid. If they do sign up – cha ching!
Pay Per Click
The pay per click program is one of the more popular on the web. As the name suggests, these affiliate programs work by paying the affiliate for each unique visitor that clicks through to the destination site. Pay per click programs are often abused as affiliate come up with all kinds of ways to try to artificially inflate their clicks. In fact, these programs are generally disappearing in favor of…
Pay Per Lead
The pay per lead program is also indicative of its name. The affiliate sends through traffic to the sponsoring site. When any of the visitors fill out a inquiry form, the affiliate gets paid. There are actually master lead programs now that offer up programs on certain subjects. When the lead comes in, competing sites can then bid on it. This creates a range of revenue per lead for the affiliate. The pay per lead approach is becoming very popular in the affiliate program industry and will probably become the dominant approach as the years pass.
Pay Per Sale
The pay per sale program is the next logical step up. Sponsoring sites love these programs because they only have to pay when a sale is actually made. Affiliates are less enthralled because now they have to hope the sponsoring site knows how to convert leads to sales. For this reason, many affiliates shy away from pay per sale programs. They will always be around, but they will probably never become the dominant affiliate program on the market.
There are many different approaches to affiliate programs. That being said, these are the most common ways affiliate programs work.