Affiliate Marketing and Being Paid
Internet Marketing Programs or How Will I be Paid?
If you do a cursory analysis on Google examining the search phrase "Internet Marketing Systems" you are likely to be regaled on the following topics: Pay Per Click, Pay Per Sale, Pay Per Performance, Pay Per Lead, Single and Multi-tiered Payment Plans, and Residual Income. While interesting, they are NOT Internet and Affiliate Marketing Programs. More precisely they are plans of compensation to the marketer and a means of exchange of goods to the customer.
So, what is the difference between an affiliate marketing program and a plan of compensation?
An Internet and affiliate marketing program is: a structured plan representing a market in which a product(s) is found and advertised, offered for sale, and includes an exchange mechanism for transferring the product and the appropriate remuneration. In short, what you sell, how you sell it, and how you get paid is "the program."
A plan of compensation is: a process WITHIN an Internet and affiliate marketing program that facilitates the transference of cash or other monetary instrument for the exchange of products and/or services. In short, it's what gets the customer the good and you the cash when the advertising has convinced the customer that your market is valuable and the product(s) therein worth purchasing.
Having said this and offered some correction of terminology, we should cover the ways by which we get paid for our well thought out affiliate marketing programs. While some would suggest that this is the whole point of the exercise, to get paid, I would like to suggest that that idea will not sell many products nor endear you to your customer.
In review, an Internet and Affiliate Marketing Program consists of:
A market of goods
A product or products for sale
A product showcase-website or other "place" to see the product
An advertising strategy
A payment and product exchange plan
You don't want to make a single sale, you want happy interested to return buyers so you can make MANY sales.
Pay Per Sale is the compensation method most familiar to Internet and Affiliate marketers. In a pay per sale method the marketer is paid for a product or service. Often this is a direct sale of a product the marketer sells.
Pay Per Performance is transaction that happens only after a specific group of criteria have been met, namely, a product sale. This is a favored device of merchants because they provide no compensation to the Internet and affiliate marketer until such time as a product has actually been sold. All costs of advertising and of "herding" customers to a merchant's site are borne by the affiliate marketer. If there is no purchase, the merchant suffers no cost and the marketer must continue to convince customers to buy in order to cover his/her costs.
Pay Per Lead is a method that does not depend upon a sale to consummate payment to a Internet marketer. Instead, a marketer is paid when a customer or "lead" lands on the site and completes a form. This kind of payment system is based upon a fixed fee and is the same whether 2 or 200 people are sent to the website. The fee for each will not very. This method is most often used by insurance and finance companies and is not a common method in other venues of the Internet and Affiliate marketing industry.
Pay Per Click is a well defined system of payment within the affiliate Marketing industry. It most commonly occurs in the form of the Google Adsense or the Yahoo Publisher Network programs. The pay per click program requires that a website(s) host the Adsense or Yahoo "ads" on any of its web pages. When people reading the ads actually click through the ad to its target web address, the advertiser is charged a fee and a portion of that fee is given to the web host. Basically, the product the Internet and affiliate marketer is selling is the "real estate" on his/her web page. This is a method of "monetizing" your website and is usually an additional income and not the main source of affiliate marketer income.
Multi-tiered and Residual Payments are the most sought after compensation plans because the income is an extended, or better, a continuous stream of cash. The primary difference is duration. In the multi-tiered plan, you receive a commission for a purchase and if the buyer returns within a specified time to buy again, you again get paid once more. In the residual plan, the payments can essentially be endless. Affiliates selling to affiliates are the most obvious model. Affiliate "A" sells to "affiliate "B." Affiliate "A" gets a commission every time Affiliate "B" makes a purchase, but not only that, if affiliate "B" sells to "C" and "D," affiliate "A" gets a commission from all three. There are a limited group of products that use this compensation model but they are usually very lucrative.
Internet and affiliate marketing programs promote, advertise, and sell products. Compensation systems provide a method of exchanging product for cash or other instrument of compensation. The compensation plan is a component of the Internet and affiliate marketing program.
Now let's get out there and sell your stuff!
