9 Affiliate Marketing Compensation Models You Didn’t Know

You will find some interesting and valuable affiliate marketing opportunities and affiliate marketing compensation models online.

These include places that claim you could earn thousands of dollars a month through your work.

It is true that you can earn thousands each month but it requires a great deal of effort and works on your part to make it possible.

You will receive compensation based on your efforts and how well your work led people into buying certain products.

Affiliate Marketing Compensation Models

What kinds of affiliate marketing compensation models are available to you?

You have to know how you will be paid before entering into an affiliate program so you will fully understand what you can get out of it.

There are four particular compensation models that are available through affiliate marketing.

Each of them pays according to individual activities and each works in its own particular way.

Some focus more on potential one-off profits, others may include long-term benefits.

The benefits you can expect vary from merchant to merchant.

Make sure you understand what is available and that you have a clear plan for whatever you want to highlight and focus on.

Be aware that it might take some time before you actually receive payment from a campaign.

Your compensation will depend on the effort you put into a campaign.

It can take weeks or months for you to get what you are looking for.

The following is an explanation of these four affiliate marketing compensation models and additional information on some of the extra programs and offers you might expect.

Related: 7 "Blunders To Avoid" While Finding The Affiliate Networks

1. Pay-Per-Lead (or PPL)

Pay per Lead or PPL
Image by https://catalystforbusiness.com/

The most commonly used option for compensation is pay-per-lead (or PPL).

This is where you are paid for each lead that you bring to a site.

In other words, your pay depends on the number of customers you direct to the vendor's website.

For instance, you might try to get someone to go on a website to buy a new tech product.

When someone clicks on a link to the site that sells such products and buys something, you will be paid provided the person in question completes the sale.

This model is typically used by service-oriented businesses.

An online service provider is a great example of this.

You might promote an ISP on your affiliate marketing website and then get paid for each lead that you produce.

This works when people click on the links on your site that direct them to a service site and then purchase contracts to use particular services.

The compensation is typically fixed.

For instance, if you refer people to an ISP that offers online access at $29-95 per month, then you could get a commission of $10 per month or even more.

The total would vary according to the size and cost of the contract.

Some merchants may also offer significant deals where you will get further commissions if someone renews a contract.

In this example, you might get an additional commission from a prior referral if that person renews a contract.

You could continue to be paid provided that a referral remains a customer of the program.

It will take a while for you to get a Pay-Per-Lead system to work for you.

You must do enough to convince people to click on your links and to make whatever you are offering attractive enough that people will want to buy it.

By using your marketing skills and being persistent with your content, it will become easier for you to get a big payout if you continue to work hard.

2. Pay-Per-Sale (or PPS)

Pay per Sale or PPS
Image by https://www.affiliate2day.com

The pay-per-sale (or PPS) compensation setup provides a commission for each individual product that is sold based on your lead.

When someone clicks on your link and buys a product from it, you will receive payment.

This is all thanks to the use of cookies.

The tracking cookie that comes from the customer's browser will identify you as the entity that led the person to a particular site.

This lets the retailer know that you are the one responsible for getting a sale to go forward.

The total amount of compensation will vary based on what the merchant has stipulated.

You might get 5 to 15 percent of the commission on each sale that you have been responsible for directing a customer to make, although some sites might offer something even larger.

This is one of the popular forms of affiliate marketing compensation models that take more time for you to complete.

The goal is to create a sensible context for whatever it is you are aiming to offer people.

A customer has to make a purchase for you to actually be paid.

The Pay-Per-Sale (or PPS) process works a little differently from PPL in that a cookie on the PPS setup might not last as long as it would for the PPL.

Therefore, you have to be convincing when working on a PPS site so that a customer acts on your offer as soon as possible.

Related: 10 Common Affiliate Marketing Mistakes To Avoid As a Beginner

3. Pay-Per-Click (or PPC)

Pay per Click or PPC
Image by https://www.inc.com/john-lincoln

The third option for compensation is the pay-per-click or PPC process.

When you look at paid advertising for your site, you might consider a PPC option, where you will link up to a keyword on a search engine and the pay is based on the number of clicks people initiate on that link.

However, a PPC system is more than just something you could spend money on for your marketing needs.

It is also something that can determine what you might be paid.

With this model, a merchant or network will pay you for every time someone clicks on your marketing links.

This means that every time someone sees your ad and clicks on a link, you will have a chance to earn something from it.

This is a simple option for getting money but it is also typically a cheap one.

You might only get a few cents for every click.

Sometimes the PPC option can link up to a Pay-per-Sale or Pay-per-Lead deal.

However, that does not happen too often as the PPC system is frequently separate from anything else you might enter into.

Still, you do not have to get someone to buy something just to make money from a PPC.

With a PPC plan, you just need to get people onto your site and make your content enticing enough that someone will want to click on your links.

You will get paid for the clicks regardless of whether or not someone goes as far as to buy something on the other site.

Although you could make money from the clicks that come on a PPC site, you will get even more out of your work if you have a PPS or PPL plan to go along with it.

4. Pay-Per-lmpression (or CPM)

Pay per impression or cpm
Image by investopedia.com

The fourth and final option to get paid is the pay-per-impression, or CPM.

This is an option that does not require people to actually click on your content.

All you need to do is get people to come onto your site and read what is there.

All it takes for this to work is for you to have a web page come up on someone's computer.

The display and text ads that come with your campaign need to load up properly for it to count as an impression.

The goal of the PPI process is that it encourages people to do what they can to make their advertisements more visible.

The PPI process is the least profitable form of compensation.

You would have to get thousands of impressions to make anything decent from this platform.

This makes it all the more important for you to produce consistently good content on a regular basis.

You will get more impressions when you have enough content and plenty of regular readers who want to see everything that you are putting onto your website.

5. Free Gifts

Free Gifts
Image by https://soulsoaring.com

Did you know that you could get more than just a good payday with your affiliate site?

You could get some free gifts from a program.

Free gifts are often given to people for their hard work in getting more customers onto a site.

The terms associated with such gifts may vary.

Let's say that you are working on a site that sells sports fan apparel.

You might get a reward for every $100 that you earn.

This could be something like a $5 coupon to the site that you are promoting.

This free gift might sound cheap but it is still a good reward for the work you have put in.

The value of the gift will vary based on what program you have chosen.

When looking for a program, check to see that the gift offered is interesting and gives you an incentive to keep on working.

More importantly, think about how free gift might work for you.

Is that free gift something you would actually want to use yourself.

It is best to avoid working with programs that offer gifts you would not actually use or would not have an interest in.

6. Rewards For Referring New Affiliates

Rewards For Referring New Affiliates
Image by Gerd Altmann from Pixabay

You could also be paid extra for producing more affiliates.

That is, you might encourage people on your site to become affiliates on a campaign.

This could help you to get even more money.

Your bonus would come as you get a new affiliate to join your site.

This bonus might be worth $50 or more although that is just an example of what is available.

Do not expect the value of the reward to be worth too much in most cases.

The process you would use for referring a new affiliate would entail posting messages on your site about encouraging people to sign up for the same program you are working on.

You can tell people about a program that is open and how they can benefit from it.

You could ask those people to use you as a referral when they are signing up to be a part of the program.

This is attractive but you should use this form of promotion rather sparingly.

If you use it too often, people will think that you are being overly demanding or too specific about what you want to get out of your site.

Don't spend a lot of time on it as the reward you might receive will more than likely be a one-off benefit.

Related: Can You Make Money With Wealthy Affiliate? (The Truth They’re Hiding)

7. Multiple Reward Tiers

Multiple Reward Tiers
Photo by Pixabay from Pexels

An interesting thing you can see in some marketing campaigns is that you might qualify to get into a particular reward tier.

This is where you would get larger rewards for your work depending on the tier you choose.

Here is an example to show you how multiple tiers work.

Let's suppose you are working on a program with an airline and you are promoting travel to various destinations that a particular airline might serve.

As you refer people to that airline's website, you will make commissions from the sales you generate.

You might get a better reward if you bring in more sales.

If you have sold fewer than 25 travel packages, then you might get a 5 percent commission for each package that is sold.

Those people who cause 26 to 100 packages to be sold might get an 8 percent commission.

Those who cause the sale of 101 or more of those packages might be awarded 12 percent commission from those sales.

This offer encourages people to work harder to refer people to the airline.

Those who do the most work and are more effective at getting referrals will be rewarded for being more efficient and productive.

However, there might be a time limit set as to how long you can take advantage of such bonuses.

For instance, the number of sales you have initiated could reset after a few months or after a full year.

Therefore, you would have to work harder to get as many referrals as possible within that set time limit.

8. Revenue Sharing

Revenue Sharing
Photo by rawpixel.com from Pexels

Revenue sharing is not that common when it comes to ways for you to earn money from a merchant but it is still worth noting.

Revenue sharing works in that you will earn a percentage of the revenues that a business earns.

The total you earn will vary based on the contract you enter into.

You might get a small amount of the revenues if you refer enough people to a site.

It is tough to figure out how much money you would actually get from revenue sharing.

A site might allow 10 percent of its revenues to be divided up among its affiliates.

Those revenues will vary based on who put in the most effort.

An affiliate who does more will get a larger share of the pie, for instance.

This could be measured based on the values of the transactions.

Also, the total revenues involved will vary based on how busy a site is and how many people choose it.

A business might be incredibly active and give its affiliates a lot of money.

However, it might also be in the middle of a down period and thus affiliates will receive less revenue.

This is an extremely volatile form of reimbursement.

As a result, most merchants and networks do not consider the revenue sharing option as a viable and reliable system of payment.

9. Compensation via Advice or Gifts

A merchant could also provide you with additional advice on how to get the most out of your marketing work.

You can get free help from the merchant to assist you in getting the most compensation possible.

This may come from a weekly or monthly email newsletter or access to a particular website that offers regular information on what you can do.

You might receive messages that include details on the newest offers that the merchant has plus tips on how to sell what you are promoting.

This might not sound like compensation per se as it does not necessarily involve money.

However, it does give you extra help to decide how you can get the compensation that you deserve.

You may also get a free copy of something you are trying to sell depending on the merchant.

Let's say that you wanted to promote a weight loss book that people could download.

The author might provide you with a free or discounted book or at least a significant portion of it.

This access is given to help you understand what is in a book and how it works so that you can promote it.

Related: How To Make Money With Affiliate Marketing Without a Blog or Website?

Can You Combine Affiliate Marketing Compensation Models?

In most cases, you will not be able to use two or three of these affiliate marketing compensation models at once.

Most merchants focus on just one to simplify the program but every merchant varies based on what they have to offer.

Check online to see what options each retailer has to offer so you can decide if a particular choice is worthwhile for you.

Your ability to run a successful affiliate marketing campaign must be reviewed in detail.

By running a great campaign that is convincing to the public and offers enough information to all, it will be easier for you to make the most out of it.

You must look at how well you are able to get the impressions and other points on your campaign working right.

By using the right standards, it will be easier for you to get the most compensation possible.


These are the most common affiliate marketing compensation models in the industry and amount of money you can make with any of the models will solely depend on your efforts.

Watch for the rules involved with entering into a program.

All merchants have their own plans for how they will compensate you.

Sometimes you might get more money in the long term but the rules involved with the program you move into should be reviewed diligently.

Do you have any question regarding affiliate marketing?

Feel free to ask in the comments below and I will be happy to answer it 🙂

About the author 

Hardik Raval

Hardik is passionate about helping people launch their own online business. He loves to talk about online business ideas, affiliate marketing tools, tips and other sources of residual income available on the internet.

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