Types of Affiliate Marketing Programs 
A synthetic classification
by Octavian P Jurma,
AlphaTotal.com
back to Introduction to Affiliate Marketing

Content
Single-tier affiliate programs
  • CPM (Pay per View)
  • PPC (CPC or Cost per Click)
  • PPS (Pay per Sale)
  • PPL (Pay per Lead)
  • PBC (Performance bonus)

Where to find Affiliate Programs?

Multiple-tier affiliate programs

Residual Income (Partnership) Programs

  • LCC (life of client commission)
  • ARC (affiliate referral commission) 

    We were saying that AFFILIATE (or ASSOCIATE) MARKETING can  be defined as a form of Referral Marketing (RM) in which two sites are in a business relationship that is build around some type or types of  Revenue Sharing Program (RSP). In other words where a site pays another site for sending customers their way. 

    To help you (and us) we have classified the Revenue Sharing Programs (RSP) in the following categories based on their payment structure:

Single-tier affiliate programs
   
These are programs that pay for traffic or sales you directly refer to their site.
Multiple-tier affiliate programs
   
These are programs that pay for traffic or sales you indirectly refer to their site, such as referrals made by people you referred to their site.
Residual Income Programs
   
Are Single or Multiple tier programs that pay a percentage of the revenue generated during the life of a client. 

Single-tier affiliate programs
   
These are programs that pay for traffic or sales you directly refer to their site

CPM = $ pay per 1,000 impressions or cost-per-1,000-impressions (CPM)
sometimes named
Pay per View
Cost per thousand is used by Internet marketers to price ad banners. Sites that sell advertising will guarantee an advertiser a certain number of impressions (number of times an ad banner is downloaded and presumably seen by visitors), then set a rate based on that guarantee times the CPM rate. In some cases there are no restrictions to the number of impressions.

Banner = everybody knows what a banner is. Just make sure you follow the guidelines for standard banner sizes as suggested by Internet Advertising Bureau when you design your web site.

PPC = Pay per click-through or 
CPC = Cost-per-click

Cost-per-click is an Internet marketing formula used to price ad banners. Advertisers will pay Internet publishers based on the number of clicks a specific ad banner or hyperlink gets. Cost usually runs in the range of $.001 - $.20 per click.
Note: Easy to confuse with PPL

PPS = Pay per sale
    Pays a $ amount for every sale or activity that leads to a sale and resulted from your direct referral.
There are basically  two variants:
        1. Fixed commission - where you make the same money regardless of the purchase amount
        2. Percentage commission - where you make a percentage from the sale, anywhere from 0.1% to 50% depending on the product
In many cases the two are mixed.

PPL = Pay per lead
    Easy to confuse with PPC It is actually a version of pay per sale with the difference that there products or services offered are free. An example is free e-mail accounts, free downloads or free news-letters. In most cases the "lead" is defined as the referral that "leads" to the opening of an account, which is usually required for any "free" reward.

 
PBC = Performance bonus commissions
    Special $ amounts, gifts or privileges that are offered to accounts that meet certain performance criteria. In many cases these have constraints of time.

RESIDUAL INCOME PROGRAMS

LCC = Life of client commission
   
Fixed or percentage $ amounts paid for the life of client. These are paid each time a client referred by you returns to make a purchase or renews a subscription type of service (such as fee based memberships and accounts) like web hosting for example.

ARC = Affiliate referral commission 
 
   These are commissions paid to refer affiliates. These special referrals enable the site to drive exponential traffic by recruiting Internet leadership. They also can overload their capacity to pay the affiliates and limits must be set to protect them. You should be extra-careful when you design or join such a program. ARCs are also the most controversial form of revenue sharing on- and off-line.
    Usually ARCs represent a fixed or percentage $ amounts paid of the commissions generated by the affiliate you refer. A very general categorization follows:

Multiple-tier affiliate programs

        Two-tier affiliate programs also known as uni-level affiliate programs or uni-level marketing programs. These ARC programs pay commissions for your referrals as well as the referrals of the people who join the program following your recommendation (hence two-tier or uni-level)

        Multi-tier affiliate programs also known as multi-level affiliate programs or multi-level marketing programs. These ARC programs pay commissions for your referrals, the referrals of the people who join the program following your recommendation and for the recommendations these people make on different tiers or levels (hence multi-tier or multi-level). Note that these are "multi" and not "infinitely" and these programs always have limitations that stir controversy, but their theoretical income potential is much higher than any other affiliate program. Not recommended for the faint of hearth.

This is a full topic in itself. You can learn more here

Where to find Affiliate Programs?

    For many reasons, by far, the best source of affiliate programs are the Affiliate Networks. These sites manage multiple affiliate programs and allow you to apply to many sites and manage the links from one convenient account. A good example is Commission Junction .
    Other good sources are Affiliate Directories or Hubs like AlphaTotal.com. Using one of these has the advantage that you can find most of the relevant information including Affiliate Networks in one convenient place.

Back to Introduction to Affiliate Marketing Programs