Pay-per-click advertising is common, but what about pay-per-click affiliate programs? These formerly popular programs have been declining over the past few years and many affiliate networks have phased them out entirely.
But if you’re an honest affiliate marketer, hoping to earn revenue based on a pay-per-click affiliate program, can you actually make some money at it? The biggest challenge is actually finding an affiliate network that still offers these programs.
Why Pay-Per-Click Affiliate Programs are Uncommon
Pay-per-click programs used to be commonplace, but they began losing popularity with the increase of bot traffic. Merchants who paid for clicks soon realized that the “leads” generated from bot traffic or incentivized human traffic just wasn’t generating a return on investment.
Bot traffic is nothing new, and pay-per-click advertising networks have to deal with fraud on a regular basis. This phenomenon is well documented, and some sources claim that over one-third of all ad-traffic consists of bots.
Affiliate marketers often define the cutting edge of online marketing practices, but there are always some bad apples to be found in the bunch. Commission Junction is one affiliate network that shut down its program due to abuse. And most major affiliate programs don’t even offer pay-per-click affiliate programs for this very reason.
Pay-Per-Click Compensation Models
Pay-per-click advertising is common, and many ad networks have developed ways to deal with false traffic. The eBay affiliate program, for instance, has developed a system that pays based on the quality of traffic you deliver. If you deliver bot traffic and low-quality leads that never convert, your earnings will reflect this. And it may not be worth pursuing.
Large advertising networks such as eBay and Google have algorithms designed to deal with bot traffic and tackle fraud, but affiliate pay-per-click programs often have to play both sides of the field: merchants and affiliates. Mediating the game and dealing with both merchants and affiliates can be a pretty daunting proposition, especially when fraudsters are constantly evolving their tactics. When fraud is detected by major advertising networks, the account is usually banned.
The eBay Partner Network does offer both pay-per-click and pay-per-sale compensation models, but it tends to refer to the pay-per-click model as “advertising,” not an “affiliate program.” For many, this is just semantics. When you offer pay-per-click compensation, aren’t you really just paying for an advertisement?
Why Other Compensation Models Work Well
The vast, vast majority of affiliate offers are based on the cost-per-sale compensation model. This means that you get a percentage of a sale, as opposed to revenue based on clicks. As mentioned, eBay and Google can deal with fraud by reducing the payout for low quality traffic or by banning suspect accounts, but affiliate networks have a double-edged sword to deal with.
Their customer base consists of merchants and affiliates. If they ban an affiliate, they cut out a portion of their customers. If they permit affiliates to send false traffic to the merchant, they undercut the quality of their own affiliate program and risk alienating merchants.
The dominant compensation model is the cost-per-sale model. Merchants offer a percentage of the final sale to the affiliates, which is much less risky than a cost-per-click model. It virtually eliminates the fraud potential, since merchants put zero money down and only pay the affiliate upon completion of a purchase. If an item is returned, the commission must also be returned.
While some affiliate programs, such as EntireWeb, still offer pay-per-click compensation models as well as pay-per-sale models, this pricing structure is becoming less and less common among major affiliate networks.
What Model Most Affiliate Programs Use Instead
“Cost-per-click” can be thought of as a form of lead generation. When you advertise a merchant’s product or service and being paid for each click, you are actually being paid for leads. But, as mentioned, when that lead is a bot or an incentivized human, it isn’t worth anything to the merchant.
Merchants do, however, want more leads, so affiliate programs have stepped up the quality of pay-per-click programs and replaced them with other forms of lead generation, such as pay-per-call. These programs are also very difficult to fool, and an affiliate can receive payments for each lead that calls the merchant.
In these cases, merchants are responsible for closing the sale. Affiliates get paid regardless of whether or not a purchase is made. This form of lead generation helps keep the affiliate networks, affiliate marketers, and the merchants clear of potential fraud.
Anyone interested in pay-per-click affiliate programs may have trouble finding an affiliate program that still offers the pay-per-click compensation model. For the most part, all pay-per-click compensation models are offered through advertising programs. Each compensation model has its pros and cons and works better for some monetization strategies than others.