Affiliate Marketing: Different Types

Affiliate marketing is classified into a number of types and fall under two categories. These are pay per click and pay for performance.

Pay/Click

This is also called PPC and is considered the easiest and most popular affiliate marketing method. This is a good thing for small websites. An affiliate earns money by placing the banner and text ads of merchants on your website and the affiliate gets paid for every click on those banners. With this method, the visitor is not required to make a purchase to earn money. The earnings for this are usually very small though.

Pay/Performance

This is also called PPP and is famous among all types of merchants. This method means that the affiliate gets credited when a visitor from their affiliate id performs a required action. This could be making a purchase or becoming a member of a website. This is extremely good for merchants because they only pay when they are paid. Its attractive for affiliates because they are usually getting a good share in the sale of the products. This can be around 15-20%.

Affiliate marketing can be divided into 3 classes in terms of depth. These are single, two-tier and multi-tier programs. Another type is when the when an affiliate marketer is paid for each sale that is made by a person referred by him. This is referred to as residual income affiliate marketing. Below well study them in detail.

Affiliate Marketing: 1-Tier, 2-Tier & Multi-Tier

An affiliate program of single-tier natures means that the affiliate receives commission for the visitors traffic or sales to the merchants website. Pay/performance and pay/click fall under this category.

Two-tier marketing means that the affiliate receives a commission for every action done by the visitors referred by him. He will get profit whenever some other affiliate, referred by him, gets a commission. This means the affiliate earns both directly and indirectly.

Multi-tier marketing is the same as two-tier marketing except that the affiliates get commission for the sales made by their affiliated affiliates in multiple tiers. The depth of this type may be unlimited.

Residual Income Marketing

This type of marketing involves the affiliate receiving a commission for every sale that his referred person makes on the merchant website. The only requirement of this is that on the first visit, the person needs to come from the affiliate link of the affiliate. The next time the same person buys something on the merchants website the affiliate will be paid a commission even if the customer goes directly to the merchant. The question then is how does the merchant know the affiliate id? The answer is that on the first visit of the person from the affiliate website, a cookie is created on the computer of the visitor. This cookie stores the affiliate id and usually expires after 3 months. Whenever a visitor goes to the merchant website, the computer is checked for a cookie. The cookie is then looked at for the affiliate id and the affiliate is credited for any purchase by the visitor.