Thursday, September 28th, 2023
The working inner mechanics of affiliate marketing, has not changed that much since its inception. It’s pretty much the same, since when Amazon first launched its eCommerce site in the mid-90’s. What they single-handedly did, was pretty much pioneered the affiliate marketing industry.
Today, the same online affiliate marketing model and principles still apply, and works the same way. What has changed with the times however, are strategies such as the traffic sources like social media marketing, the payout methods, and changes in conversion strategies.
The Time To Start Your Online Affiliate Business Is Now
As the economy continues to downsize, and the traditional 9-to-5 jobs are becoming scarce, there are more transient workers than ever before, who are wanting to start their own home based business.
The easiest entry is online marketing, to earn an income from home, this in the hopes that it might someday replace or supplement their real world income.
What To Sell When Affiliate Marketing
The most common question that every new online marketer has when starting out in Internet marketing, is how they can make money on their website or blog.
If you don’t have any products or services of your own, such as ebooks or tangible goods, then the best option and the most popular, is to become an Affiliate Marketer or ‘publisher’ for another company or merchant.
There are absolutely tens of thousands of affiliate programs and products, that are available for you to promote, specific to your niche.
So what’s needed, is understanding the types of programs that are available, along with the payment models that best suits your particular website, and tailored to your visitors.
If you’re completely new to affiliate marketing, then you need to familiarize yourself with the industry jargon. There are various terms, that you need to understand.
These include knowing the different payout and tracking solutions and structures that are available, when it comes to the affiliate merchants and the affiliate networks.
The basic models of monetization, includes cost per acquisition (CPA), cost per click (CPC), cost per impression (CPM), cost per lead (CPL), and Residual Affiliate Marketing programs.
For those just starting out, and exploring the world of affiliate marketing, what’s needed is knowing the differences of each of these options.
The savvy seasoned affiliate marketers, will always tell you that one method, doesn’t always fit all.
One key reason why you need to understand the various payment structures, is so you’ll know why other marketers are using and choosing the various payment models to tailor to their needs, while finding a balance between them.
Cost Per Acquisition or CPA
Once you sign up with an affiliate network, you’ll quickly understand the concept of cost per acquisition, or CPA. CPA, is the most common payout structure for merchants and affiliate networks.
Using CPA, affiliate marketers will direct their visitors from their site or blog, usually from an article, a banner ad or a text link, to the sponsoring merchant’s product sales page.
Once a sale is made, the merchant will then pay you the affiliate, who’s displaying the ad, the agreed percentage of commission.
As the name Cost Per Acquisition implies, you as the affiliate marketer earns income once an actual sale or acquisition is made, through your promotional efforts.
In some cases, doing so can require significant amounts of time, capital and effort to generate revenue as an affiliate.
You are required to build a solid following, build trust through persistent communication, develop promotional offers that are creative in nature, and then combine them all together.
CPA is the most common payment structure, as well as the method that usually needs the most amount of work and effort. It also has the most potential, to produce the greatest revenue.
Make sure that you research and choose your campaigns and niches wisely, and then devote your available resources so your investment, will be worthwhile.
Cost Per Lead or CPL
Most experienced affiliate marketers who are profitable, will tell you that promoting CPL offers is the best way to go. The reason being, it’s the easiest action for your customer to take, for you to earn a commission.
How the CPA model and earning a commission works, is that you the affiliate marketer, directs your website visitors to the sponsoring merchants site.
This not in the hopes that they buy something, but to extract their information such as their email address, on the merchants site.
CPL can also include they fill out an online form, sign up for a specific service, or to request further information, etc. Once that action is completed, you get paid a commission..
One example, is you getting paid for sending your visitor to an Auto Insurance Quotes site, where your visitor submits their email address, to get various quotes for car insurance.
Provided that the submission is valid, you get paid for that action and your work is done.
Using the CPA model of affiliate marketing, where the customer needs to buy something, requires more effort to set up the campaign, and a bit of a ‘hard sell’ is needed, Using the CPL model, is considered a much softer sell.
The affiliate who’s marketing the CPL program earns a commission, simply by providing valid leads to the online merchant, which can include a number of different interactions, but doesn’t need to end in an actual sale.
This is also the reason why CPL, it’s the preferred marketing method that’s used by most affiliate marketers.
Under the CPL structure, the affiliate’s primary goal is getting their site visitors to fill out some type of registration form, download a product information whitepaper, or opt into an email list, which i a lot less effort than attempting to get that visitor to actually purchase a product or service.
The most successful affiliate marketers, those who are dogma about the choices that they make, where their time and effort is limited, will do CPL marketing, as it’s the path of least resistance.
Cost Per Click or CPC
Most affiliate marketers when first starting out, usually begins with the ‘cost-per-click’ model. Using CPC, affiliate marketers receive a pre-determined percentage of the bid price that’s paid by the advertiser, once their visitors clicks on a banner or text ad, that’s placed on their blog.
The best example as well as the most popular CPC publisher program, is Google’s Adsense.
The challenge for the affiliate marketer, is to provide enough relevant unique content on their blog, so that it hopefully attracts enough targeted traffic, and the visitor will click on the banner or text ad that’s placed on the site. What’s earned, is a percentage of the click.
Generating revenue from the CPC affiliate marketing model, is considered the premier ‘lowest-hanging fruit’ revenue, when it comes to online affiliate marketing, this especially when first starting out.
CPC marketing, also requires the least demand on time or effort on your part as an affiliate marketer, but it also generally produces the lowest return on revenue.
The Various Affiliate Marketing Models
What CPA requires is someone to actually buy something to earn any money.
The CPL model, requires moderate engagement such as filling out a form.
What CPC involves, is that the visitor clicks on a media ad banner or a text link on their site, for the affiliate marketer to earn a percentage of the click.
Although the commission that’s earned on every CPC click can be low, participating in CPC, provides for additional supplemental income, especially when combined with the other payment models.
Cost Per Impression or CPM
CPM or Cost Per Thousand impressions, is typically used on authority sites with significant amounts of traffic, that usually uses sophisticated traffic targeting methods.
CPM marketing, is available more for experienced publishers, for those who operates an authority blog. One that’s firmly established, and gets massive amounts of traffic.
For merchants, Cost Per Impression can be ideal for brand awareness campaigns. CPM for publishers, can provide an easy low-impact method, of generating profit from traffic without much effort.
Since CPM as a payment structure, is better suited for those who have a high traffic website, it doesn’t make sense nor is usually made available, for lower volume niche blogs with little traffic.
But once a blog begins to generate a significant number of unique visitors, using a CPM campaign can be an easy and outstanding method to increase affiliate revenue. All without needing to get involved in the other more time consuming payment methods.
CPM is also used for testing out new formats, that can be implemented and segmented for larger audiences, this once the site reaches a significant level of traffic.
Residual Affiliate Programs
Another way to earn income as an affiliate marketer, and perhaps the best long-term strategy to make money on the internet, is to participate in a residual payment affiliate program.
Residual affiliate programs, are usually CPA based, where the affiliate earns a commission every month from a customer that they recruited, for as long as the customer that was referred to the merchants site, remains with the service or product.
An example, is a membership site or a web hosting site. Once the affiliate refers a visitor to become a member of the membership or hosting site, the affiliate earns a commission every month, for as long as the customer remains a paying monthly member.
Another form of residual income, is when the affiliate earns a commission, every time that the customer that’s referred, or purchases something on the merchants site.
A residual affiliate program, is popular among affiliate marketers, who are looking for a long-term passive income stream, as their income accumulates every month, for as long as the customers they referred to the merchants site, remains paying customers.
The Various Affiliate Marketing Models
Once an affiliate marketer understand the various payout methods, that are behind each of the different payment structures, they can then begin to tailor and shape their affiliate campaign efforts accordingly.
CPA campaigns for instance, can be designed around creating a community of niche followers. CPL campaigns can be a little more aggressive of a campaign, such as an immediate call to action. Building a relationship with their visitors, also doesn’t need to be as strong.
The ultimate goal however, is to find the proper balance, along with knowing what type of traffic is required for each affiliate marketing strategy.