Affiliate marketing models


Affiliate marketing is a rapidly growing segment of commerce where skilled individuals connect advertisers and customers. However, this industry is littered with a veritable alphabet soup of important terms and conditions that can confuse all but the most determined.
Many of these acronyms identify the various compensation models of affiliate marketing, and are key in the planning and execution of advertising campaigns.

PPS – Pay Per Sale (revenue share)
The PPS (pay per sale) compensation model is where the advertiser pays a specific percentage of all sales generated by the affiliate. For this reason, this model is also referred to as a revenue share or revshare model. This model is unique in that it can be used to promote items such as computers and other electronics where other models, such as PPA, fall short.

PPA/PPL – Pay Per Action or Pay Per Lead
PPA or pay per action is the compensation model by which publishers are paid a commission based on the completion of a certain action. For example, affiliate A refers a customer to a landing page where the customer proceeds to create an account with the advertised service. The affiliate is then paid for that generated lead. This model can be applied to filling out forms, signing up for a trial, etc. This model is very popular with financial services (mortgages, car loans, credit cards) and subscription services, to name a few.

PPI – Pay Per Install
The PPI or pay per install compensation model is similar to PPA/PPL models except the affiliate is paid when a customer installs a specific piece of software. This model is particularly popular in the distribution of adware. For example, a free software program is bundled with adware, and then the bundle is distributed by BitTorrent, software repositories, and the like.

These three models are by far the most popular methods of compensation in affiliate marketing. However, connecting definitions to abbreviations is only half of the battle; to truly get a grasp of affiliate marketing, the only step one need to take is launching that first campaign. Furthermore, by launching your first campaign, you’ll get a better idea of advertising practices in relation to different offers and products.

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