'Net Features : CPL

Monetization Models for Affiliates (Intermediate)

Linc Wonham — Wed, 08 Jun 2011 20:00:00 GMT

WM recently posted an article entitled How to Make Money on Your Website, which was intended to give those new to affiliate marketing a useful overview of the different payout structures available to them through merchants and networks. These monetization models include cost per acquisition (CPA), cost per lead (CPL), cost per click (CPC) and cost per impression (commonly known as CPM).

Novices just starting out in the world of Internet marketing must know the basic differences between each option, but more savvy affiliates will tell you that one size does not fit all. The reason for now exploring these payment structures in more depth is to illustrate the fact that the most successful Web marketers are the ones who – rather than pick and choose – can find the optimal balance between them all.

CPA – Cost Per Acquisition
As the name suggests, the affiliate earns revenue only from actual sales – or acquisitions – made through their website. In most cases, this can require a significant amount of time and effort on the part of affiliates, whether through building a following, persistent communications, creative promotional offers or all of the above. This is the most common payment structure, and also the one that involves the most work and produces the greatest rewards. Choose these campaigns wisely, and then devote the proper amount of available resources to make your investments worthwhile.

CPL – Cost Per Lead
If the CPA model requires a hard sell from affiliates (and it does), the CPL model can be considered a considerably softer sell. The affiliate earns revenue simply by providing leads to the merchant, which can include any number of interactions but does not have to involve an actual sale. Under this structure, the affiliate’s main goal is to get visitors to fill out a registration form, download a whitepaper or join an email list, which is a significantly smaller undertaking than trying to get them to purchase actual product. Again, the most successful affiliates are vigilant in their choices, allotting the most time and energy to the highest-hanging fruit.

CPC – Cost Per Click
Cost-per-click revenues may be the lowest-hanging fruit on the Web marketing tree, but they also demand the least amount of effort on the part of affiliates and generally produce the lowest returns. Whereas CPA models require acquisitions, CPL models require moderate engagement, CPC campaigns require only that visitors click on an ad or a text link for the affiliate partner to receive a percentage of the merchant’s bid price. The downside, of course, is that the commissions on each click can be quite low, and marketers have to be somewhat discretionary about the CPC agreement into which they enter. These campaigns can provide a nice supplement in combination with the other models – and with much less effort – but, again, choose them judiciously based on your overall affiliate strategy.

CPM – Cost Per Thousand Impressions
This payment structure is far better suited for highly trafficked websites and makes little sense for (nor is it available to) those not pulling in a large volume of visitors. But once a site starts to generate a high number of pageviews, CPM campaigns can be an outstanding method for increasing that site’s affiliate revenues without the heavy lifting involved in CPA or even CPL models. This model is also commonly and effectively used for testing new formats that can be implemented in the targeting and segmenting of these larger audiences, once a site reaches that coveted level.

Once marketers have grasped the general concepts behind each payment structure, they can begin to tailor their affiliate campaigns accordingly. A CPA campaign, for instance, may be built around creating a community of followers -- or vice versa. CPL campaigns, on the other hand, may be more aggressive in their immediate calls to action, but less so in terms of building relationships with visitors. The ultimate goal, of course, is to find the right balance and to know which models call for which strategies.

How to Make Money on Your Website - Affiliate

Pete Prestipino — Tue, 07 Jun 2011 05:45:00 GMT

If there's one question asked repeatedly by those starting out in the world of Internet business, it is how to make money on their website. If you're not selling product (whether ebooks or any other tangible goods), then the only option is to become an affiliate (also often called the more innocuous "publisher") of another company.

There are tens of thousands of affiliate/publisher programs out there but understanding which type of program and which model best suits your site and your users is a difficult decision to make. Let's look at the different ways to make money on (or from) a website in order of the most-utilized/common.

CPA - Cost Per Acquisition
If you have ever signed up for an affiliate network you will likely be very familiar with cost per acquisition. CPA is by far the most common payout structure for merchants and in turn affiliate networks and affiliates. In CPA, affiliate websites direct their visitors (through display banner advertisements or sponsored text links) to the merchant's website. When a sale is made, the merchant gives the affiliate the pre-agreed commission.

CPL - Cost Per Lead
Those affiliates/publishers that are performing at an effective rate are those which may also have the luxury of promoting offers on a CPL basis. Cost per lead means that you, as the affiliate, direct website users/visitors to merchants' websites not in the hopes of them purchasing anything (although some programs have a CPA/CPL hybrid offering) but rather providing their information via filling out a form, signing up for a service, requesting information, etc.

CPC - Cost Per Click
Most publishers and affiliates starting out opt for cost-per-click offers. In CPC, affiliates receive a percentage of the advertiser's bid price. The most popular CPC affiliate/publisher program in the history of the 'Net is Google's Adsense program. The challenge for affiliates is in producing content that drives a sufficient amount of traffic so that even the small percentage of clicks which happen on these ads is profitable.

Cost Per Impression
CPM - While not as common as it once was, CPM (cost per thousand impressions) is now typically the reserve of websites with large amounts of traffic and sophisticated targeting and segmentation capabilities. CPM deals are often extended to publishers/affiliates by merchants when the site is established and afforded some authority by its users. For merchants, CPM deals are ideal for branding and awareness campaigns. For affiliates and publishers, CPM provides a low-impact way to generate profit from traffic without much leg-work.

WM Radio: Discussing PPC, and CPM vs. CPA

Mike Phillips — Fri, 06 Aug 2010 18:54:00 GMT

Pay-per-click marketing is the focus of this episode of Website Magazine Radio, as we talk with specialist Sergio Alvarez, COO of AI Media Group. We talk about the past, present and future of PPC and strategies to help your business profit. Also, we answer our listener question of the week, about the differences between CPM vs. CPA and which option is right for your website.

Listen now, and subcribe to Website Magazine Radio in iTunes!

LISTEN NOW! (Please visit the site to view this media)

Direct Download (right click and save)

If you would like to have your questions answered on Website Magazine Radio, please send email to editors@websitemagazine.com with "WM Radio" in the subject field.

Cost Per Twitter Lead?

Pete Prestipino — Wed, 17 Jun 2009 20:33:00 GMT

It is increasingly clear to many that marketing is becoming solely about engagement.

Pontiflex has a way for advertisers to build and grow lists of Twitter users using Cost-per-Lead (CPL) advertising. In addition to basic user information like name and email, Pontiflex's platform allows advertisers to capture Twitter handles of consumers who have opted-in to being contacted by the brand. Advertisers can then "follow" users on Twitter to better understand their concerns and also ask users to follow their brand to continue building the consumer/brand relationship. I initially thought I wouldn't be a fan, but I have to tell you that this might just have some merit.

Advertisers can currently run ad units through Pontiflex AdLeads on publishers like Boston.com, Monster.com, Orbitz.com and Babycenter.com. Using a form embedded inside the banner and direct response creative, users can choose to enter basic user information like first name, last name and Twitter handle. Users stay on the publisher's site during this process and their information is transmitted to the advertiser in real-time through Pontiflex's back end. Advertisers can then "follow" the user and reach out to them directly. Advertisers pay only for leads that have submitted their information.

"Marketing is moving from a one way monologue to a two way conversation," said Zephrin Lasker, CEO & Co-founder, Pontiflex. "Many advertisers have tried to incorporate Twitter into their marketing efforts but few have done so successfully. This gives brands a very easy starting point for building a group of people who want to engage with them on Twitter. With Pontiflex AdLeads, advertisers can now build a responsive community of users on Twitter, listen to what they are saying and respond in relevant ways."