Tuesday, October 16, 2007

Paid per click vs. Pay per sale

When using affiliate programs, the option of getting paid per click is often tempting. This can be in form of contextual advertising, or traditional PPC programs. This option, how ever, is not the best option in all cases. How do you know when to choose to be paid per click, and when to choose a PPS model?

People familiar with adsense or other forms of contextual ads – with a fluctuant amount paid for each click – are aware of the big difference between the price for a click in a competitive niche and a less competitive one. These days, there are numerous websites dedicated to listing and reviewing various keywords and niches for contextual advertising.

If you have a website in a niche lucrative and competitive – and you are attracting visitors – you might stand a good chance of getting a fair amount of money for every visitors you send thru contextual ads, but if you are running a website in a less competitive niche, odds are you not to thrilled with the money you make with contextual ads.

This is a perfect time to switch to an affiliate program. The good thing about affiliate programs lies in the ability to target the products and ads yourself, while with contextual ads, you are stuck with a more or less accurate script deciding what will convert best and pay you the most.

There are a few differences in promoting a pay per sale affiliate program, both difficulties and possibilities.

The main difficulty is you are now hoping for your visitors to, not only click, but to buy the products or services you are advertising. With contextual ads – in its simplest form – all you need to do is place the code on a prominent placed and cross your fingers. With affiliate programs you need to be more subtle. Looking only at the commission you will receive, and not looking at the quality of website you are sending visitors to, will not be a very profitable project. Instead, you should do as much research you possibly can, and always try to improve both your click thru rate and your conversion rate. Don’t be afraid to try new affiliate programs if the first one won’t make you any money.

When using static ads – banner and/or text ads – you have a much better way to choose the ads according to your visitors. Different from the scripts doing the work with contextual ads, you have the means to look at several other factors to decide what you site is about. Looking at your visitors will give you additional information on what products or services they might be looking for, and hopefully buy.

In addition to this, you have a good chance of promoting the products you are advertising, hence pre-selling them. This is known as one of the most important factors when working with online affiliate programs, simply because your visitors often have some level of trust in you and your writing. This has little to do with you or your website, but simply because people tend to believe the person not obviously gaining from it. If a website brags about their products, people will filter it out, deeming it blatant advertising, but if another source – you – tells them the same thing, they are less reluctant to consider it the truth.

As a rule of thumb, traditional pay per sale affiliate programs will perform better than contextual ads in niches of low to medium competition. In niches of high competition – i.e. pharmacy products, gambling and travel – the price paid per click can sometimes make the use of contextual advertising it highly profitable.