There are many different types of affiliate programs, and it can be difficult to decide which one is the best for your brand.
In this blog post, we will discuss the three most common types of affiliate programs by compensation method: pay-per-sale, pay-per-click, and pay-per-lead.
Another way to categorize affiliate programs is by the level of involvement: unattached, related and involved.
We will also discuss the types of affiliate partners and provide tips on how to choose the right type for your business.
What is affiliate marketing?
Affiliate marketing is a performance-based marketing strategy in which businesses reward affiliates for each visitor or customer they bring in.
The industry has four core players: the merchant (also known as ‘retailer’ or ‘brand’), the network (that contains offers for the affiliate to choose from and also takes care of the payments), the publisher (also known as ‘the affiliate’), and the customer.
The affiliate’s own marketing efforts are what drive the traffic, making this a cost-effective way to acquire new customers for a brand. In order for an affiliate to be successful, they need to have a large audience that is interested in the products or services being offered.
This can be accomplished through various marketing channels, such as a blog, social media, or email list.
Once the affiliate has built up their audience, they can begin promoting the merchant’s products or services and earn commissions on any sales that are generated.
Types of affiliate programs by compensation method
Pay-per-sale affiliate programs are the most common type of affiliate program.
Under a pay-per-sale program, the affiliate is paid a commission for each product that they sell or is purchased by a customer they have sent to the advertiser.
The advantage of this type of program is that it provides the affiliate with an opportunity to make money without owning any products.
However, the downside is that the affiliate is only paid if they are able to generate a sale. This can be a difficult task, especially for new affiliates.
This method is popular with both manufacturers of physical products and creators of digital products.
Pay-per-click affiliate programs are another common type of affiliate program.
Under a pay-per-click program, the affiliate is paid a commission every time a customer clicks on one of their links.
This type of program can be easier to generate income with than a pay-per-sale program, but the commissions are usually much lower.
Often used by businesses that require a high volume of customers where the value of each lead is lower. The gaming industry is a good example.
Pay-per-lead affiliate programs are similar to pay-per-click programs, but the affiliate is paid a commission when a customer signs up for a free trial or provides their contact information.
This type of program can be difficult to generate leads with, but the payouts can be higher than other types of programs.
This model is typically used by high-ticket service providers such as insurance companies and local businesses like plumbers or garden design companies.
Types of affiliate programs by the level of involvement
Unattached affiliates are not associated with the merchant in any way.
They simply promote the products or services of the merchant and earn a commission on every sale that they generate.
This type of affiliate is popular with businesses that have a wide range of products or services to offer. They can also be used to promote multiple merchants at the same time.
The affiliate is often not a user of the service or product they promote, they simply choose the affiliate offers based on high commission or the perceived profitability potential.
Related affiliates are associated with the merchant in some way.
This can be through a business or personal relationship, such as being an employee or partner of the merchant.
Related affiliates are often able to earn higher commissions than unattached affiliates because they have a closer relationship with the merchant.
Another type of a related affiliate can be an influencer with an online presence such as a blog or social media profile. To generate more income, they often use affiliate links to products or services related to their topic.
They may or may not be users of the products they promote.
Involved affiliates are those who have a close relationship with the merchant and are actively involved in promoting their products or services.
This can be through owning a website or blog dedicated to the merchant’s industry, writing product reviews, or participating in online forums related to the merchant’s products.
Involved affiliates are more likely to be users of the products or services they promote and have a better understanding of the merchant’s target market.
Because of this, they are able to generate higher quality leads which can result in higher commissions.
Types of affiliate partners
Blogs and content sites
Blogs come in all shapes and sizes, and most feature a personal voice and a specific niche. The best blogs offer something unique, whether it’s a new perspective on an old topic or insights into a particular niche.
Many bloggers also use affiliate links to generate income. These links allow readers to purchase products or services through the blogger’s website, and the blogger earns a commission on each sale. By using affiliate links, bloggers can turn their passion for writing into a profitable business.
Product review sites
These sites are an important part of the online shopping process for many consumers, as they provide an independent opinion on products and services.
Whereas a blog usually features more personal content related to the blog owner, review sites are more product-focused, featuring comparable data points, and aiming to provide information that helps the reader to choose the best option for them.
Coupon and deal sites
If you’re trying to introduce a new product or service to the marketplace, you might want to consider creating an affiliate partnership with a coupon site.
By offering a discount on your product, you’ll be able to attract first-time buyers who might not have otherwise considered your brand. And if they’re satisfied with their purchase, they could become brand advocates, helping to spread the word about your business.
An influencer is someone with a large online following in a particular niche.
They use their online profiles to promote products or services to their followers, who are often interested in what the influencer has to say.
This type of affiliate partnership can be very effective, as it allows you to tap into an already engaged audience. And if the influencer is a satisfied user of your product or service, their positive endorsements can be very powerful.
Email marketers have a large list of email subscribers, to who they send regular updates, and they often include affiliate links in these.
Email affiliate marketing can be an effective way to reach new customers, but it needs to be done in a way that doesn’t annoy or alienate potential buyers.
No one likes getting spam, so it’s important to make sure that any emails being sent out are targeted at people who are actually interested in what you’re selling.
If done properly, email affiliate marketing can be a great way to expand your customer base without having to spend a lot of money on advertising.
Search affiliates use paid search advertising to generate leads for merchants.
They bid on keywords related to the merchant’s products or services, and when a searcher clicks on their ad, they’re taken to the merchant’s website.
This type of affiliate marketing can be very effective, as it allows you to target potential customers who are already interested in what you have to offer.
And because you’re only paying for leads that are generated, it can be a very cost-effective way to grow your business.
How to choose the right affiliate partners for your brand?
You need to start with creating a persona for your ideal customer. (1)
Once you have this, you can research and think through where your ideal customers are most likely to search for what you have to offer.
The best affiliate partners are those that align with your brand and create content that complements what you’re selling.
For example, if you sell health supplements, an affiliate partnership with a fitness blogger could be a great way to reach new customers.
Or if you sell beauty products, partnering with a fashion influencer could help you to reach a new audience.
The most important thing is to make sure that your affiliate partners are reputable and that their promotion methods are ethical.
You don’t want to tarnish your own brand by partnering with an affiliate that has a bad reputation.
Do your research, read reviews, and ask around before you commit to an affiliate partnership.
And finally, don’t forget to track your results.
See which affiliate partners are generating the most leads or sales for you and adjust your strategy accordingly.
By constantly testing and tweaking your approach, you’ll be able to maximize your results and grow your business in a sustainable way.