Payout models in affiliate marketing
The webmaster receives a reward when a potential client performs the target action of the offer. Subscription, installation, purchase, registration, filling out a deposit form with contact details.
There are many options for performing the target action, as well as payment models.
In this article, we will explore different payment models in affiliate marketing.
The CPA payment model is one of the most frequently used in affiliate marketing. Suitable for almost all offers and verticals. It's simple, it's immediately clear who pays for what.
CPA stands for Cost per Action. Subscription, installation, purchase, registration, filling out a deposit form with contact details.
Target actions are tracked through web analytics. Checking cookies or links with a tracking code.
For each credited action, a payment accumulates. It is specified in the offer. The amount is fixed.
Revenue Share or Revshare
Another popular payment model in the affiliate marketing world.
Revshare - a percentage of the advertiser's income.
The minus of the model is not fixed income. It is better suited for long term use. Here you need to wait until the user/client makes a deposit, bets on sports, pays for a subscription, and/or renews it.
CPS - cost per sale. The webmaster receives fixed prices for the paid order, there is no percentage of sales. Payments are negotiated. The model is suitable for selling goods in online stores and nutra.
CPI (Cost per Install)
If the application is installed - there is a payment. The model is for mobile, desktop games and applications.
CPL (Cost Per Lead) or PPL (Pay per Lead)
This is where you pay for leads. Users who perform the desired target action. In the context of the CPL or PPL payment model, information given by the user. Email, phone number, name, etc.
The advertiser takes the collected data for advertising, selling his product and newsletter.
Payment goes for received contacts. It doesn't matter if the client makes a purchase or subscription for money. Need information about a potential client.
Offers with a CPL or PPL payment model often have an SOI or DOI specification. Let's take a look at them.
Each user who fills out a contact form/questionnaire and leaves a request for further communication, is taken into account.
In this model, leads can be of “low” quality. This is a risk for the advertiser. Therefore, the payouts for this model are low.
Low-quality leads are a deliberate incorrect filling of the form (misspelled email address, phone number). For the advertiser - zero value in such forms.
There is also a possessive side: due to the simplicity of the target action, conversions are always high, and offers are easy to test for any budget.
Here, the user is required to perform two targeted actions. For example, provide an email and confirm it with a link. Or download a game and reach level 3. Register an account and fund your account.
Conversion - only after two confirmed target actions. Quality leads. Payouts are higher.
In the CPC model - pay per click. Clickable banners are almost everywhere. The more users click on the banner, the more you earn. It does not matter whether they buy the goods, whether they get an account and a paid subscription. Payout is per click.
CPO (Cost Per Order) — the webmaster receives payment for the order placed by the client, even if no purchase has been made. Just that is enough. The CPO model pays less than CPS.
СС-Submit (Credit card submit) - payout if the user enters credit card details; relevant for paid subscriptions and paid content, sweepstakes.
PPC (Pay Per Call) - payout per call; the buyer must call the toll number.
Trial (Триалка) - subscription payment model; the user buys a “trial” product, a temporary subscription. If satisfied, then the payment is taken monthly. Trial - a complex model, payouts depend on the term of subscription renewal.
Many models overlap or complement each other well.
You need to carefully read the characteristics of the offer in order to understand what the payout will be for.
All models have pros and cons. Some are better suited to specific verticals than others. Which model to work with is up to you.