Friday, July 14, 2006

Affiliate Marketing Compensation Models

Pay-Per-Impression (CPM)
In this model the commission is based on Impressions. For every 1000 times the Ad is displayed the publisher gets an amount as commission from the Advertiser.

In short CPM means Cost-Per-Mil (Mil = 1000) Impressions

Pay-Per-Click (CPC)
Cost-Per-Click. Advertiser pays Publisher $x.xx amount of money, every time a visitor (potential prospect) clicks on the advertiser's Ad. It is irrelevant (for the compensation) how often an Ad is displayed. Commission is only due when the Ad is clicked. See also click fraud.

Pay-Per-Lead (CPA or CPL)
Cost-Per-Action or Cost-Per-Acquisition (CPA), Cost-per-Lead (CPL). Advertiser pays Publisher $x.xx in commission for every visitor that was referred by the publisher to the Advertiser (Website) and performs a desired action, such as Filling out a Form, Creating an Account or Signing up for a Newsletter. This compensation model is very popular with online services from ISP's, Cell Phone Providers, Banks (Loans, Mortgages, Credit Cards) and Subscription Services.

Pay-Per-Sale (CPS)
Cost-Per-Sale (CPS). Advertiser pays the publisher a percentage (%) of the Order Amount (Sale) that was created by a customer who was referred by the publisher. This model is by far the most common compensation model used by online retailers that have an affiliate program.

Pay-Per-Call
This is a new compensation model. No official abbreviation exist yet. Advertiser pays publisher a $x.xx commission for phone calls received from potential prospects as response to a specific publisher Ad. Recently developed call-tracking technology allows to create a bridge between online and offline Adve

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