Pay-Per-Click Trials vs. Revenue-Sharing Programs: Pros and Cons of Each

by | Mar 22, 2015 | Advertising

Free pay-per-click trials are a great way to try out a PPC advertising program, but are they worth it? After all, eventually you will be paying for the service.

Let’s see how free pay-per-click trials stack up against revenue-sharing ad programs, which usually involve no up-front costs, but split the advertising revenue with you.

Pay-Per-Click Trials: Pros and Cons

First, let’s take a quick look at some pay-per-click trials pros and cons.

On the upside…

Free trials are free. Enough said. Free trials don’t cost a penny, and you won’t pay anything if you decide not to continue the membership.

You can see what the premium program is like. Advertising companies know how important it is to provide immediate value to their customers, so that’s what they do. A free trial lets you see what you will be dealing with.

Compare, contrast, save. You can try free trials one after another until you find the one you are satisfied with. Of course, always make sure you are fully cancelled out of any obligations, so you don’t “accidentally” get stuck with a membership fee.

These pros paint free trials in a pretty good light, right?

However…

The free trials don’t give a big picture. You want to know what your marketing ROI will be, how easy your campaigns will be to manage, and so forth. Free trials that are 15 or 30 days won’t give you much information in that regard.

They are designed to give you a taste – and just a taste – of what the programs are made of, but you won’t know how effective they are for your budget. A free trial just doesn’t give you an idea of your potential ROI: you have to stay on board to find that out.

Free trials aren’t really free in the end. A free trial is simply a technique to get you to buy into a subscription. Unlike freemium models, which often allow you to coast along for free as long as you like, free trials are specifically designed for the upsell.

Many free trials require you to sign up for a program, which means you’ve got to force a cancellation in order to opt out.

If you sign up, you often feel locked in and committed. Once you’ve signed up and jumped on board for the paid program, you’re “locked in,” at least to a certain extent. This simple psychological mindset is often enough to prevent you from branching out and testing other programs.

Revenue-Sharing: Pros and Cons

Revenue-sharing programs are usually free. Advertising companies make their money by splitting advertising revenue with you, rather than through monthly or yearly fees.

Here are a few of the upsides to revenue-sharing programs…

Revenue-sharing options are also free. The best revenue-sharing programs are run by industry-leading advertising companies such as CodeFuel, which charge no up-front fees and have no hidden costs. Unlike free trials, you don’t have to worry about upsells or minimum monthly payments.

You can get started quickly with the full tool set. Revenue-sharing programs let you get up and running in no time with the full version of the program – no “premium” features or locked functions. Usually, this simply means copying and pasting some code into your app, software, extension, or website, then checking the analytics software.

More volume makes up for the revenue split. With more tools immediately at your disposal, you’ve got access to more promotion and monetization tools. Why do you get more volume? Simple: more partners, advertisers, and publishers choose to work with programs that don’t have up-front fees. This means more resources are devoted to the network’s development.

The revenue-sharing model doesn’t sound too bad either.

However…

You pay for the advertising tools with shared revenue instead of a membership fee. Rather than paying for a set membership fee, you’re splitting ad revenue with the ad network. Depending on how much money you earn per month, this amount can be higher than other membership fees. If your income is low, then these fees will be low, but if your revenue is higher, then these fees will be higher.

This particular point is one reason many developers hesitate when it comes to revenue-sharing advertising programs. But there is another way of looking at it: higher earners are reinvesting higher amounts into the further research and development of these same advertising tools.

Programs with set fees also have a set revenue stream, based solely on the amount garnered from members. This means that they have more limited funds to invest in their advertising tools. Perhaps this is one reason why certain revenue-sharing programs have such good tools to offer.

 

Both types of programs have their pros and cons. But in many cases, revenue-sharing PPC programs offer the better end of the deal, in terms of program quality, traffic volume, and monetization potential. 

PPL, PPS, PPC, and PPI: Affiliate Compensation Models and Their Benefits

by | Feb 25, 2015 | Advertising

The acronyms PPL, PPS, PPC, and PPI, affiliate marketing, and advertising compensation method, are probably familiar to most online marketers. Each compensation method pays differently and has a different earning potential. Which one is right for you?

Each has its benefits, its drawbacks, and its applications. Generally speaking, certain types of compensation pay more than others, but it should be noted that these rates can vary greatly, especially when it comes to highly competitive industries. 

Pay-Per-Lead (PPL)

Most companies place a high value on leads and offer pay-per-lead (PPL) – often considered a type of pay-per-action (PPA) – compensation methods. As with most affiliate networks and compensation methods, the rate can vary greatly from advertiser to advertiser and from industry to industry. Lead-generation programs offered through affiliate networks can pay anywhere from $2 to $20 or more.

Subscription-based services, such as internet service providers and cell phone networks, as well as other service-based vendors, tend to use this model.

Pay-Per-Sale (PPS)

Pay-per-sale (PPS) requires payment in the form of a commission each time a product is sold. This commission is almost always a percentage of the total cost of the product. As with the other compensation models, the exact rate can vary greatly. But, in general, this rate has the potential to be as high, if not higher, than the others.

Some sales, such as a $2.99 ebook with a 6% commission, doesn’t have a lot of monetization potential, given the low commission rate as well as the low conversion rate for purchases. A camera, however, that generates the same commission on a $1,500 sale would have the potential to be much more lucrative.

This compensation model is very common in affiliate marketing and can earn marketers a great deal of income, but it is also highly competitive and quite time-consuming.

Pay-Per-Click (PPC)

Pay-per-click (PPC) advertising is one of the most ubiquitous, common terms in the online advertising world. With this compensation method, marketers earn money each time a person clicks on an advertisement. Anyone who wishes to monetize an app or a website, for instance, can insert PPC ads as a way to generate an online income stream.

In general, PPC ads don’t earn very much revenue – often less than a few cents. Highly competitive niche markets, however, can pay much more. Logically speaking, then, the more traffic you have and the more you engage them, the more money you will earn.

Pay-Per-Impression (PPI)

Pay-per-impression (PPI) ads are another common compensation model for display ads and text ads. They generate revenue based on the number of times people view the ads. From the advertiser’s perspective, this compensation method is typically called cost-per-mille (CPM), which means cost-per-thousand impressions.

As with PPC, the pay tends to be low relative for this compensation model, and often requires large amounts of traffic in order to gain a significant income.

Which Compensation Model is Best for Marketers?

After reading the above descriptions, it may seem that PPL and PPS are the better way to go. After all, they earn you much more money, so why wouldn’t you?

It’s true, but there are other factors that you should take into consideration.

PPL and PPS take more time to implement. Adding ads to your website, software program, or browser extension is usually a matter of inserting the proper code. And if you have enough traffic to your site or users engaged with your app, you’ll be able to generate decent revenue.

On the other hand, it can be harder to convince someone to spend money on a product or service. You have to put time and effort into contextualizing the offer, creating good content to pitch the sale, and earning people’s trust. This type of marketing can often be a part-time or even full-time job.

Affiliate marketing is highly competitive. Generally, when people use the term “affiliate marketing,” they are referring to PPL, PPA, and PPS compensation methods. Because this type of marketing can be so lucrative, it is also highly competitive. The niches have all become saturated with talented, tech-savvy marketers who make it very difficult to squeeze in. And, as time goes on, these fields will only become more competitive.

Certain types of content are more suited to certain types of marketing. PPC and PPI ads are ideal for certain types of content, but not as ideal for others. They can be excellent for monetizing software, apps, or browser extensions, for instance. Since PPS and PPL marketing often relies heavily on context and content, it can be more of a creative and logistical challenge to use these types of marketing to monetize anything code-based.

 

While there is no one right way to monetize anything, there are two general things to consider: what type of content you’re trying to monetize and how much time you have to put into your online marketing efforts. For those who want to put less time into marketing and more time into content creation, PPC and PPI ads are probably the way to go. But for those who want to focus on the marketing side of things, context-driven sales, and so forth, PPL and PPS compensation methods will probably work well.  

Pay Per Play vs. Pay Per Impression vs. Pay Per Click – What’s Better?

by | Feb 24, 2015 | Advertising

Pay per play, pay per impression, and pay per click are all compensation methods used in online advertising. If you’re a developer who wants to monetize an app, if you’re a blogger who wants to test out monetization methods, or if you’re simply curious, you may want to learn more about them.

Keep reading to learn which compensation method pays more and which you should use in your advertising campaigns.

Pay-Per-Play

Pay-per-play (PPP) gets less play than other compensation method acronyms (pun intended). This is certainly because it refers to a relatively uncommon method of advertising: audio advertising.

It’s not that audio ads themselves are uncommon, but they are uncommon online. The web is a medium composed predominantly of written content and visual images. Though audio ad networks are available, they are relatively uncommon.

Anecdotal evidence from around the web suggests that they just don’t generate that much revenue. The Nielsen Norman Group – leaders and experts in the usability field – suggested that audio ads have a negative impact. They are ranked right up there with the “dreaded pop-up ads.”

Pay-Per-Impression

Pay-per-impression (PPI) is a compensation method that pays based on the number of impressions, or views, that an ad receives. From the advertiser’s perspective, this is abbreviated CPM, which stands for cost-per-mille, or cost-per-thousand-impressions.

This type of compensation model is used predominantly with display ads, text ads, video ads, interactive ads, and so forth. The pay rate varies, but is more widely known than the PPP compensation model, simply because there are so many more ads that use PPI than PPP as a payment setup.

As you may be able to guess, the advertiser pays out the ad network and the publisher each time an ad is viewed 1,000 times.

The rate varies based on the specific type of ad and the industry. Video ads can be over $20, while other types of display ads average at a few dollars per thousand impressions. At the low end, you’ll be receiving a few cents; at the high end, you’ll be receiving a few dollars, but the rates never quite compare to the rates for video ads.

Pay-Per-Click

Pay-per-click (PPC) rates are often much less per click, with small click-through rates that average around 0.3%. This means that if you receive 10 cents per click and get a 0.3% conversion rate, you will need more than 300 visitors to get a single click. That means you will need more than 3000 visitors to get a dollar.

Now, this is just extrapolation based on a hypothetical scenario with a hypothetical web page. But it gives you one clear idea: you need lots of traffic to earn money from these ads.

This is true whether you are using PPC ads on your website or in your app, though bear in mind that people tend to use apps for much longer periods of time than they do websites. The more engaged a user is with an app, the more they’ll be exposed to ads and the more likely they are to convert.

Which One Works Best?

It’s a toss-up between the PPC and the PPI. In either case, whether you’re designing for a website or an app or a software program, you’ll need significant amounts of traffic to generate a decent income from the ads.

To figure out the best option for you, put the ads in context with your particular marketing campaign and your content. If you already have an app or a website, it should be a simple matter to test out each advertising method and see which one works better.

Let’s compare the math above to potential earnings for a PPI ad: if you receive 10 cents per thousand views, then it would take 3,000 views to reach 30 cents. Not quite the same as 3,000 views for one dollar, is it?

Of course, this “10 cents” metric is arbitrary. As mentioned, the rates vary greatly based on your industry and how high profile your app or website is.

The highest paying industries, regardless of the compensation method, are business, technology, family and parenting, home and architecture, and web design. The lowest-paying industries are gaming, weddings, and beauty.

Do a little research to find out the average payments for your industry, then rough out some calculations to find out how much traffic you would need to reach a certain dollar amount.

From the above data, it’s clear that the PPP compensation method, i.e., audio ads, just isn’t feasible unless you run a radio show or podcast. And between the other two methods, PPC ads look like they have better results, but always do your advertising research, check your traffic and conversion numbers, and test. In some cases, the conversion rates and payout rates don’t equal the industry averages.