Two basic categories of affiliate marketing program techniques are pay-per-click and pay per action. Each of these offers a unique approach to the traditional affiliate marketing business. Structure your affiliate program for success by making use of one of the most popular types of revenue generation available.

Pay-Per-Click (PPC)

PPC is by far the most popular program implemented by affiliate marketers. It’s especially useful for affiliate marketers with small websites and often the easiest way for them to earn money. An affiliate can generate a lot of traffic and clicks, making this type of program quite profitable.

In a PPC program, the affiliate marketer places any combination of banner and text ads on their website. Ads direct visitors to merchant websites or even to specific products on the affiliate merchant’s site. The affiliate is then paid per click, hence the name. Even when no sale is made, the affiliate marketer is still rewarded with commission.

The majority of these ads come from sites that have a lot of different merchants. They are called ad networks. These networks, similar to social networks, track your data and maintain the affiliate relationship with affiliate merchants.

Some programs allow affiliates to pick and choose which ads will be used on their websites. Other more popular programs such as Google Adsense, Yahoo, and ClickBank use automated rotating ads. Ads placed will correlate with the content on each page of the affiliate marketer’s website.

Pay-Per-Lead (PPL)

PPL marketing is a variation of PPS. In PPL programs, affiliates are paid a commission when a visitor has the potential to become a future buyer. Even though the lead may never turn into an actual sale, it gives the merchant the opportunity to interact with the new client. They, therefore, consider this an asset and are willing to pay affiliates to find leads.

Pay-Per-Action (PPA)

PPA is the more lucrative type of affiliate program when compared to PPC. It’s the most popular technique implemented by affiliate merchants. With the PPA approach, affiliate marketers are paid only if there is a lead or sale. Affiliate merchants don’t feel like they’re paying for traffic.

Affiliate marketers generate more income by using PPA ads. Rather than being paid a normal commission of less than $1 per click, they’re given a percentage of the price of the product they’re advertising. This is very rewarding for a dedicated affiliate who does more than just place ads on a website and leave it at that.

Required Action for PPA

The two most popular required actions for a PPA campaign are to sign up for an e-mail newsletter or buy a product. PPA affiliate marketing can be categorized as either pay-per-sale (PPS) or Pay-per-lead (PPL). When a visitor clicks your affiliate link then signs up for a newsletter, you’ve helped generate a lead for the affiliate merchant. The same holds true for sale.

In a PPS system, affiliates are paid commission only if a product is purchased. Commission percentages usually range from 15 percent to 20 percent of the actual product price. The affiliate merchant makes the final decision on the best compensation for the product sold.

The sales of products delivered via e-mail or download such as e-books bring a higher commission percentage. It’s not surprising to see a product with a payout of 75 percent in this case. Affiliate merchants that offer high percentages for items available through electronic means realize that their product may be sold again and again.

PPS programs many times offer incentives to their affiliates. These incentives are based on their performance. Performance incentives can range from gifts to higher payout rates and bonuses.