Residual commission

When joining an affiliate program, one should always look for a residual commission model, simply because the enormous potential in recruiting potential long term customers for the affiliate program. Many affiliate programs offer residual – sometimes named recurring commission – but not all are of the same nature, and sometimes the term residual is flat out misleading.

What does residual commission mean?

When referring a new customer to a pay per sale affiliate program, you will always get a commission on that sale, should it occur within the set period of time (length of cookie). With a residual commission, you will earn a commission not only on the first sale, but on all future purchases of that person. The referred customer will – in a matter of speaking – be yours; earning you commissions every time he revisits the affiliate site and buys something else.

Full vs. Limited residual commission

Some affiliate programs claming to offer residual commission will decrease the commission earned, limit the products eligible for commission or limiting the period of time the customers stays yours.

When facing a program like this, you need to look at the details of the program to see if they are really offering residual commission, or if they are using the term only to recruit more affiliates. If you decide on the latter, find another affiliate program - without limitations or lower residual commission - to join.

Potentials of residual commission

Clearly, the possibility to make a commission on future sales will make the overall revenue on each referred customer larger, but how much more can one make with a residual model?

Research shows that a surprisingly low percentage of online customers will return to make additional purchases from the same website. The reasons for this are unclear, but theories imply its in part because of the wide variety of online stores – making it easy to find a new web shop offering a lower price on the next item to be bought – and part because of the many dissatisfied customers of online shopping sites with little or no customer care.

Taking this in mind, the chance of one particular customer returning to an un-named web shop might seem slim, but if you choose your affiliate program carefully, you’ll see the statistics are lying – There are ways of greatly improving the chance of referring customers who will return again and again.

To fully take advantage of the residual commission model is to find an affiliate program of an extremely high quality. If you can find a well known brand in your niche, offering residual commission, you are one giant step closer to making some serious money.

Choosing a smaller alternative – perhaps with a higher commission – may prove wise when dealing with regular pay per sale programs, but if you are hoping for your referrals to return for some more shopping, you better be damn sure the site you are sending them to is of good quality. There are a few important things to consider when deciding on an affiliate program:

Overall look and feel of the website

If the website you refer visitors to – hoping to convert them into returning customers – looks shady, poorly designed or very slow loading, this will make the potential customer think twice. If they can’t afford a decent website, how much of a company is there behind the page?

Navigation

Is it easy to navigate on the website? Are you likely to find what you are looking for, or are you bound to grow tired of it all and search google for an alternative shop?

A wide range of products

If the affiliate program only sells a few different products, the chances of someone needing more than one of course decreases, be sure to find a program with a wide range of products.

Price

The prices on all merchandise is important, if they aren’t competitive, people will rarely – if ever – return for a second try.

When you have researched all your potential affiliate programs - offering residual commission - you should have a clear view of which ones will be more likely to attract their customers for a second, third and fourth time.

Financial affiliate programs – Not always about mortgages

At Affiliate Ranker, we notice many webmasters looking for mortgage and loans affiliate programs, but the financial sector offer much more services than that. Only seeing one type of program will make it harder to find that one, great program – suited perfectly for your website.

The popularity of mortgage affiliate programs can be explained – at least in part – by the high commissions and the fact that many programs offer pay per lead commission models, as well as the huge online demand for mortgages and loans.

Almost every grown up in the civilized world are affected by mortgage rates in one way or another, making the number of daily searches for terms related to loans almost to high to calculate. Making an effort to reach the top results on a query of this kind is perhaps one of the hardest SEO tasks one can take on. This said, the upside of a successful website about loans and mortgages can make an excellent profit.

Within the search terms related to mortgages and loans, one can find a lot of terms related to other financial services. Finding affiliate programs in such niches will broaden your targeted audience, presenting them with more ways of making you a nice commission.

Insurance affiliate programs

Insurance affiliate programs work similarly to mortgage programs. They often use a pay per lead commission model, are in a highly competitive niche and are something most people are affected by.

Some insurance programs are highly specified, making them very good for related websites, but not nearly as good for a site about banking, loans or mortgages. Even though it is not impossible a visitor of such a site would be interested in cat insurance, it’s not nearly likely enough. Be sure to find an insurance program offering insurances for everything or a program targeting something relevant to your topic.

Stocks and Investment affiliate programs

All though these affiliate programs are highly specific, if you can find a way to promote them, they almost always pay very well. For any type of investment affiliate program, you should never choose one without residual commission. The big upside lies in the possibility of referring one, or a few high rollers – making them earn you commission over and over again on every trade they do.

If you have a site with a section about stocks and/or investments – looking at affiliate programs promoting trading-tools or similar can convert very well at times.

Real estate affiliate programs

Perhaps the most specific of all financial affiliate programs, real estate programs will only perform well under certain circumstances; if you have a website about real estate (obviously), if you have a geographically specified site or if you have a site with classifieds. The few real estate affiliate programs available do pay fairly well, mainly due to the high price on their services. Real estate programs are closely related to mortgage affiliate programs – many websites offer products and services from both niches.

Looking at financial affiliate programs, trying to find one or a few somewhat relevant programs to promote can, if done correctly, earn you some serious commission. It might not be easy, but if you find a way – you won’t be disappointed.

Pay per impression affiliate programs

For webmasters running sites with high traffic, looking at affiliate programs offering a pay per impression commission model may be an excellent way of improving your affiliate revenue without the need of referring any visitors to the program.

An impression is simply one view of an ad, most often a banner ad. The ad is served by the affiliate program itself and contains the affiliate’s own tracking code to monitor the number of views and clicks.

Pay per impression programs measure the amount of impression in thousands, and therefore it is often referred to as pay per mil or pay per mille. The stated commission is what you get per thousand impressions of the banner ad.

The PPM programs work in different ways. Some – if not all – offer banners for you to use, many have pop-ups or pop-unders, often with a different payout from regular banners and text ads.

As with pay per click programs, advertisers using the PPM model are always fighting people who are trying to cheat the system. Even though regular PPS programs fight their share of frauds, PPC and PPM is far more vulnerable to fraud.

This has lead to an extensive arsenal of tools designed only to catch cheaters, making the top PPM – and PPC - affiliate programs very hard to cheat, so don’t even think about trying. They will catch you and your earnings will be lost.

Many PPM affiliate programs are in fact small networks of advertisers promoting their sites thru the PPM program. In many cases, this leaves the publisher with many excellent choices as to which product to promote.

In other cases, the PPM program offers their publishers a rotating banner with ads from various companies within a specific niche. As you are not worried about sending clicks, but rather have as many see the ad as possible, this is a good way of having some variety in advertisement, opposed to one banner people grow tired of seeing.

Yet a different set of pay per impression programs have adverts of a contextual nature. You only need to insert a small affiliate script on your pages to make on-target ads appear. A few of these programs offer you to serve multiple adverts on the same page, thus increasing your affiliate commission.

Paying publishers for impressions, without knowing if you are gaining anything in sales or traffic, is risky. That’s why most PPM programs have very strict rules as to which publishers to accept as affiliates, as well as what traffic is allowed.

In general, these programs do not allow any automated traffic gained from traffic exchanges of any kind. This includes any form of click or hit exchange. If you are caught using these methods of gaining more traffic, you will loose all commission earned so far. There are some PPM programs offering significantly lower commission who allows most sources of traffic, but these commissions are so low it’s not interesting for publishers with generic traffic.

Adding a PPM affiliate program to a site with good traffic can certainly add to your revenue. If you add the code only to pages where you have plenty of visitors, you will soon notice a difference. But, as you are not gaining anything from referring visitors, you shouldn’t place the ad in a prominent spot. Those spots should be used for PPC or PPS programs where you gain from sending more visitors to the affiliate program.

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.