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Compensation Packages In Affiliate Internet Marketing

Oct 31, 2007
Predominant compensation methods

Today, nearly 80 percent of affiliate programmers use the CPS (cost per sale) or the revenue sharing as their compensation method. The remaining 19 percent use CPA (cost per action) and rest use other methods like CPS (cost per click) and CPM (cost per mil)

Diminished methods for compensation

The method of PPC (pay per click) and the pay per impression in the early affiliate marketing was very rarely used and today the method is not important at all. The CPT (cost per thousand) method requires only the publisher of the website to promote advertisements on his websites and bring forth in the market in order to get paid for the commission. While the PPC method only requires an additional step in the conversion process in order to generate revenue for the website publisher. In this, the visitors should not only be acquainted with the ad, but should also be pursued to click on the ad and visit the publisher's website. The method of CPC (cost per click) was more in use in the early days of affiliate marketing. This method was reduced over time because of click fraud issue. This is also very similar to the click fraud issues that modern search engines face today. The related advertising to this like Google AdSense is not considered as a statistic but if the contextual advertising is considered then the affiliate marketing is not considered.

Other Compensation methods for Internet marketing channels

The method of PPC (pay per click) is the main compensation model for search engines that promote pay per click. Google uses the compensation method of CPM for their AdWords or AdSense features for advertising on their websites but is an exclusion in the search engine marketing. Though the search engines only started experimenting with the compensation structures recently with the long-established affiliate marketing like pay per click action they also displayed advertisements that offered CPA in early 1998. Anyhow, trends have changed drastically.

Multi-tier Programs

There are some of the advertisers that offer multi-tie programs which distribute commissions in a hierarchical method to referral networks of sub-partners and sign ups. The growing system of the multi tier programs rewards a chain of publishers who are not directly linked to each other and yet are paid income for their higher level sigh-ups. This hierarchical structure had been successfully implemented by a company called Quixtar.com which is today called as Amway. The company has implemented a network of marketing structures in the affiliate Internet marketing to execute its marketing program for major corporations. There are also two tier programs that exist in the minority Internet affiliate marketing programs while most are single tier programs. Referrals that are programmed further than two-tier are called as multi level marketing (MLM) or network marketing.
About the Author
Stephen C Campbell (MBA, MSc, MCIM) is a business consultant and internet marketer who has conducted business throughout Europe, Far East & U.S. Learn
more about internet marketing at

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