So one of the most common questions that’s asked by new online marketers starting out in Internet marketing is how they can make money on their site or blog. If you are not selling any products or services such as ebooks or any tangible goods, then the option you have is to become an Affiliate Marketer or “publisher” for another company.
There are absolutely tens of thousands of affiliate programs which are available for you to promote. What’s required however is understanding the types of programs as well as the payment models which best suits your particular website, tailored to your visitors.
If you’re relatively new to affiliate marketing then you need to familiarize yourself with the local lingo such as the various terms that are used in the different payout and tracking structures which are available when it comes to merchants as well as affiliate networks. The basic models of monetization models include: cost per acquisition (CPA), cost per click (CPC), cost per impression (CPM), and cost per lead (CPL).
For those who are just starting out exploring the world that is Internet marketing, what’s required is being familiar with the basic differences of each of these options. The savvy seasoned affiliate marketers will always tell you that usually one size or method does not fit all.
One of the main reasons why you need to know these various payment structures is so you can then fully understand how most of the successful marketers are using as well as picking the various models to tailor to their needs, and are also able to find the balance between them.
Cost Per Acquisition or CPA
If you’ve ever signed up yourself for any type of affiliate network, you will most likely be familiar with the concept of cost per acquisition. CPA is the most common payout structure method for merchants as well as for affiliate networks and their affiliates.
Using CPA, affiliate marketers direct their visitors to their sites or blog usually through a display banner ad or a text link to the sponsoring merchant’s product website. Once a sale is made, the merchant will then pay the affiliate displaying their ad the pre-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 promotion efforts.
In most of the cases, this can usually require significant amounts of time as well as effort to generate revenue as an affiliate, as you are required to build a solid following, build trust through persistent communication, develop promotional offers which are creative in nature and then combine them all together.
Since CPA is the most common of payment structures, as well as being the method which usually involves the most amount of work, it does however has the potential to produce the greatest revenue. Make sure that you research and choose your campaigns and niches wisely, and then devote all of your available resources so your investment will become worthwhile.
Cost Per Lead or CPL
The affiliates which are performing at a fairly effective rate are those marketers who may also be successful promoting CPL offers. Cost per lead requires that you as the affiliate marketer to direct your site visitors to the sponsoring merchants’ sites, not necessarily in the hopes that they end up purchasing something, but to provide their required info to them via filling out an online form, signing up for their specific service, or requesting further information, etc.
One example would be you getting paid for directly sending your visitor to an Auto Insurance Quotes site, where your visitor submits their email address to get various quotes on car insurance. Provided that the submission is valid, you get paid for that action and your work is done.
Since integrating the CPA model of marketing usually requires a bit of elbow grease to set up the campaign and a bit of a “hard sell,” utilizing a Cost Per Lead model is considered a much softer sell.
Since the affiliate who is marketing the CPL earns income simply by providing valid leads for the online merchant, which includes any number of different interactions, the best part is it doesn’t have to end in an actual sale.
Under the CPL structure, the affiliate’s primary goal is getting their site visitors to usually fill out some type of registration form, download a product information whitepaper or opt into an email list, it’s a lot less effort than attempting to get that visitor to actually purchase a product or service.
As most of the successful affiliates are always vigilant in the choices that they make, they will allot the most time as well as energy to the lowest hanging fruit. They will take the path to least resistance.
Cost Per Click or CPC
Most publishers when they are first starting out will begin with the “cost-per-click” offers affiliate marketing model. Using CPC, affiliate marketers receive a pre-determined percentage of the bid price paid by the advertiser. The best example as well as the most popular CPC publisher program is Google’s Adsense program.
The challenge for the affiliate marketer is to provide relevant unique content on their site or blogs which are able to drive sufficient amounts of targeted traffic to their sites, since there is just a small percentage who will click on the ads to make it profitable.
Cost per click or CPC to generate revenue is the premier “lowest-hanging fruit” when it comes to Web marketing when first starting out. CPC marketing also requires the least demands on time or effort on your part as an affiliate marketer, but then, it also generally produces the least return.
While CPA requires actual acquisition or sales for income, and CPL models require moderate engagement such as filling out a form, all CPC campaigns requires is that the visitor clicks on a media ad banner or a simple text link for the affiliate to be able to receive a predetermined percentage of the merchants bid price.
The commission however on each of the CPC clicks can usually be quite low, as well as marketers needing to to be somewhat discretionary regarding the CPC agreement that they enter.
The CPC campaigns can provide for an excellent supplement if combined with the other payment models, and with a lot less effort.
Cost Per Impression or CPM
Cost Per Impression is not as popular as it once was, CPM or Cost Per Thousand impression is typically used on those sites with significant amounts of traffic using sophisticated targeting methods.
CPM deals are most commonly offered to those qualified publishers by merchants who operates a site or blog which is already firmly established as well as afforded some authority by their users. 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 Cost Per Thousand Impressions as a payment structure is a lot better suited if you have a high traffic website, so as a result, it doesn’t make sense nor is it usually available for lower volume specialized traffic sites with poor traffic.
But once a blog begins to generate a significant number of unique visitor pageviews, using a CPM campaign can be an easy and outstanding method to increase affiliate revenue, all without needing to get involved in Cost Per Acquisition or Cost Per Lead payment models.
CPM models are also used for testing out new formats which can be implemented and then segmented for larger audiences, this is once the site reaches a significant level of traffic.
Once the online Web marketer has grasped the various general concepts behind each of the different payment structures, they can then begin to tailor and then shape their affiliate campaign efforts accordingly.
CPA campaigns for example can be designed around creating a community of niche followers. CPL campaigns can be a little more aggressive of a campaign in its immediate call to action, but building relationships with their visitors doesn’t have to be as strong. The ultimate goal however is to find the proper balance and know which of the models are required for each strategy.