6 Types of Affiliate Payment Model

I am sure you are following these affiliate marketing posts and now have more and more ideas to start your affiliate website. However, one important thing that you should know about is the affiliate payment model, which decides how you will earn commissions from the merchants.

1. Pay Per Sale (PPS)

Few studies show that this Affiliate Payment Model is one of the most used compensation models by many merchants and affiliate networks; some studies say up to 80% of affiliate programs use this. The merchants focused on increasing sales select this type of model. Let me tell you how it works.
The consumer on the Affiliate’s site clicks on the affiliate link and goes to the merchant’s site. Once the consumer makes the purchase, the Affiliate earns the percentage commission on the product’s value from the merchant. These days, because of cookies, it is also possible to track and give credit for the sale that occurred after a few days from when the consumer visited the Affiliate’s site. It means it does not require the consumer to buy the product immediately. After clicking on the affiliate link, if the consumer purchases the product, even after a few days, the sale is attributed to your affiliate site. You can still earn the commissions.

2. Pay Per Click (PPC)

Whenever a consumer clicks on the affiliate link present on the affiliates’ site, then as part PPC payment model, the affiliate earns a commission on clicks.

It is possible that in this type of payment model, certain irrelevant clicks might occur, and an irrelevant audience might visit the merchant’s site. Also, in this model, the Affiliate is only concerned until the point clicks occur on the link. What happens after the click is not associated with the Affiliate. The merchant pays per click.

3. PAY PER MILE (PPM)

Pay per mile, or pay per thousand impressions is not a popular model in affiliate marketing. Some merchants do follow this model, though. So if the ads get 1000 impressions, the Affiliate earns commissions from the merchant.

4. Pay Per Action PPA

In this payment model, you as an affiliate can earn a commission on completion of the merchants desired action on the merchant’s website. Examples of the actions are creating an account, signing up for a newsletter, downloading an e-book, filling out a form, etc. The more the targeted audience you send to the merchant’s website, the better the chance of getting the actions done by the consumer.
Depending on the desired action on the merchant’s website, the merchant’s payment models can be called pay per lead, pay per acquisition, or pay per conversion.

5. Pay per call

This model is a subset of PPA. In this model, the calls are tracked, and every time a consumer calls, the Affiliate earns the commission. You must have observed the use of mobile has increased; hence more and more merchants are giving the option of click-to-call. Where the consumer can click and call the merchant’s sales representative or customer service. This payment model has been gaining popularity recently.

6. Pay per install

Some Merchants have mobile applications to sell the product or service, or the application is a platform that is a service of sorts that they have developed. These merchants wish to get more installs for their applications. So the desired action of the merchant is to get more installs. So when you as an affiliate drive traffic with the affiliate links that lead to installs, you are completing the desired action of the merchant, and you earn the commissions.

These are the payment models. And as an affiliate, you need to know these, and you should accordingly plan your website, content, placements of affiliate links, targeting the right consumers, etc.

So in this post, We spoke about various types of affiliates and payment models. To know more about affiliate marketing, check out our Affiliate Marketing section.