In today's post we're going to take a quick tour through the world of affiliate marketing, describing the main idea and the main affiliate models.
First introduced in 1989, affiliate marketing is now a multi-billion dollar market that allows people from all over the world to make money online. The basic point of affiliate marketing is to promote the goods or services of a third party (hereinafter - advertiser) and receive commissions for targeted actions, depending on the affiliate model.
It is quite obvious that there are tons of different types of services and goods, as well as targeted actions that can be interesting for the advertiser. Let's look at the most common affiliate models to help you understand the basics of affiliate marketing.
Short for Cost Per Action or Cost Per Acquisition, CPA is an affiliate model that allows you to earn a fixed commission for each target action performed by the affiliate's traffic.
The most common actions are purchase (may be called CPS - cost per sale or PPS - pay per sale) or deposit, but the target action is always defined by the advertiser. Sub-models such as CPI (cost per application or browser extension installment) and COD (cash on delivery, i.e. the customer pays for the goods on delivery, not online) can be categorized as a CPA variant, but these models are often defined as independent affiliate models.
The younger sibling of the CPA model, CPL, also known as Cost Per Lead, is an affiliate offer model where advertisers pay a fixed commission for each sign-up generated by the affiliate's traffic. There are two main types of CPL affiliate offers: SOI and DOI.
SOI stands for single opt-in, which means that filling out a sign-up form triggers a conversion.
DOI, which is double opt-in, means that in addition to filling out a form, a user must confirm the sign-up process via an email confirmation link.
Considering that it is much easier for people to sign up than to buy something online or make a deposit, and that the value of a lead is not the same as a purchase, CPL payouts are correspondingly lower than CPA payouts. That's why affiliates drive a lot of traffic to CPL offers, where the amount of commission is offset by the number of conversions.
The model where percentages decide. In short, an advertiser can choose to share a percentage of the revenue generated by each particular customer that comes from the affiliate's traffic, rather than using fixed amounts of currency per target action.
Revenue share offers are appreciated by affiliates in the long run, as a large portion of revenue share deals offer lifetime commissions. Imagine having hundreds of leads renewing paid services on a monthly basis or betting on every sporting event. Sound too good to be true? Well, welcome to the club!
Newbies may be confused and think that we are talking about the advertising format known as pay per click. But be careful, we are talking about the pay per call model of affiliate offers.
As the name suggests, in this case advertisers are interested in receiving inbound calls from potential customers and offer payouts based on the fact of a call (minimum call duration required to trigger the conversion) or a fixed amount in currency per minute (in addition, the commission may be a fixed percentage of the cost of the call in case of incoming toll calls).
We hope this article will help newbies get a basic understanding of the main models of affiliate offers. Here at Profit Pixels, we offer only the best affiliate programs based on the models highlighted above.
Join today and start earning big!