Affiliate commission – What plan to choose.

For webmasters new to affiliate marketing, some of the terms might not always be so easy to understand. While some terms are less important, you at least need to understand the different commission types available.

Affiliate commission – Choosing a revenue option

When choosing an affiliate program, the commission offered is - obviously - very important. So is the commission type. Should you choose a program that pays you for every visitor you send their way, so called PPC? Or should you go with the option of sharing the revenue for that particular visitor? Fixed commission or a percentage? The options are many, there is no general answer to what is best. It’s up to you to decide where to send your visitors, to experiment, evaluate and finally choose one or a few affiliate programs best suited for your needs.

PPC - Paid per click

Many affiliate programs offer you a - fixed or varied -commission for every visitor you send their way. Often these programs are similar to Google’s Adsense program, namely contextual advertising. The advantages of this are many, but so are the limitations. The main advantage is just the contextual bit, the task of placing relevant ads on every page is gone, and all you need to do is choose what program to join. Another great advantage is – because of the flexible nature of these programs, you will only need to join one program, making it easier to reach the payout threshold. The downside of it all is the revenue. If you can target your visitors, and subsequently what they are looking for, you can make a much larger profit with other types of affiliate programs. But, it WILL require far more work.

PPM – Paid per mille

This is roughly the same as PPC, the difference being you get paid for every visitor viewing the ad, they do not have to click it. Many companies, offering contextual advertising, have this option included in their program. The good part about it is the possibility to get paid while visitors stay on your site, instead of referring them to someone else. This option is most suitable for high traffic web sites - with small quantities of visitors, this rarely adds up to a good profit. It can, however, be a good way of targeting often viewed pages on your site.

PPS – Paid per sale

This type of commission is based on the activities of the visitors you refer to the affiliate website. If you send active visitors, who shop a lot, this can be a goldmine compared to PPC and PPM. The type of commission varies as well. It can be a percentage of the sale, a fixed amount per sale/signup or a combination of both. What to choose is very dependant on your audience, and what category of program you are looking for.

In some cases, often with a recurring commission, the option of sharing the revenue, thus getting a percentage of the total order, rake or what have you, will be far better than choosing a fixed amount per sale. The dynamics of percentage vs. revenue sharing will be looked at more deeply later on.

PPL – Paid per lead

This is roughly the same as PPS, but you get paid for leads instead of sales. This is a fairly uncommon commission method, but it often applies to specific categories of affiliate programs; Insurance companies, financial institutes and other companies with high priced products in competitive markets. If you have a site targeting visitors looking for these kinds of products, this can be a highly interesting revenue model for you.

There are other, less common, alternatives. Many of them are individual, and are mainly for very specific niches, or for experienced affiliates.

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.