Understanding the Types of Advertising Classifications
When you enter the world of affiliate marketing, you will run into acronyms and terminology that will make it somewhat daunting to navigate through and take proper advantage of the many earning options available.
Following are some of the most basic types of terminology used to signify how earning your commission works with regard to the treatment of the affiliate link “click”.
Labels and Acronyms Encountered in Affiliate Marketing
Several types of affiliate marketing systems are available, each with its unique approach and structure. Here are five common types:
- Pay-per-Sale (PPS) or Cost-per-Sale (CPS): This is the most common system. In this type of affiliate marketing, affiliates earn a commission when a referred visitor makes a purchase through their unique affiliate link. The commission is typically a percentage of the sale value. PPS is a popular model and is widely used by e-commerce websites and online retailers.
- Pay-per-Lead (PPL): With the pay-per-lead model, affiliates earn a commission when a referred visitor takes a specific action, such as signing up for a newsletter, filling out a form, or completing a survey. The commission is based on generating qualified leads for the advertiser. PPL is commonly used in industries like finance, insurance, and education.
- Pay-per-Click (PPC): In PPC affiliate marketing, affiliates earn a commission when a visitor clicks on their affiliate link and is redirected to the advertiser’s website. The commission is based on the number of clicks received. This model is often utilized by websites or blogs that focus on generating high traffic and engagement.
- Cost Per Action (CPA). These deals often hinge on conversion rate, or the percent of clicks that yield actual purchases.
- Two-Tier Affiliate Marketing: Two-tier affiliate marketing allows affiliates to earn not only from their direct referrals but also from the referrals made by those they have recruited as sub-affiliates. Affiliates earn a commission on their direct sales as well as a smaller commission on the sales generated by their sub-affiliates. This model encourages affiliates to build their own team of sub-affiliates and can create a network effect.
- Multi-Level Marketing (MLM): MLM affiliate marketing is similar to the two-tier model but typically involves a more complex compensation structure. Affiliates earn commissions not only from their direct referrals but also from the referrals made by their sub-affiliates, extending to multiple levels. MLM programs often involve the sale of physical products and require affiliates to recruit and build a network of distributors.
- Display Advertising: Display advertising refers to the visual advertisements that appear on websites, apps, or social media platforms. These ads can be in the form of banners, images, videos, or interactive media. Display advertising is often used for brand awareness, reaching a broad audience, or targeting specific demographics.
- Affiliate Marketing: Affiliate marketing is a performance-based marketing model where affiliates earn commissions by promoting other people’s or company’s products or services. Affiliates are rewarded for driving traffic or generating sales through their unique affiliate links. It is a popular method for monetizing websites, blogs, or social media channels.
- Native Advertising: Native advertising is a type of advertising that blends in with the surrounding content, providing a more seamless and non-disruptive user experience. These ads match the form and function of the platform on which they appear, making them appear more natural and less like traditional advertisements.
- Influencer Marketing: Influencer marketing involves partnering with influencers or individuals with a significant online following to promote products or services. Influencers create content, such as reviews, sponsored posts, or endorsements, to reach their audience and drive engagement and sales.
These classifications represent different methods and approaches to online advertising and marketing. Each classification has its own strategies, benefits, and considerations, and businesses often use a combination of these approaches to reach their target audience and achieve their marketing objectives.
It’s important to note that the suitability of each affiliate marketing system depends on factors such as the advertiser’s goals, the nature of the products or services being promoted, and the target audience. Understanding the different types of systems can help affiliates choose the most appropriate model to maximize their earning potential.
Products we independently select, and share may have an attached link to a merchant — we may receive a small commission if you choose to click on the link and buy, which does not affect the initial price. Trend Wealthy is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising for and linking to Amazon.com
