Merchant once tied up with the intermediary comes to an agreement on reporting/tracking (transaction) methods to be followed to track the sales/lead/clicks. Intermediary servers also keep track of these activities to ensure proper commission is given to affiliate.
To ensure the proper remuneration to affiliate and intermediary, merchants makes use of transaction reporting techniques for each sale/lead/clicks generated. Based on the sales/leads they receive, transactions are reported to the intermediary server.
Intermediary receives the transactions reported to them by the merchant, compares it with the clicks/lead tracked by them internally and makes sure affiliates gets proper remuneration from the merchant for their marketing effort.
Affiliate marketing process falls on many Payout models..
Affiliate Payout Models
There are several remuneration models utilized by the Merchant to compensate the Affiliate. The model and commissions which will govern a particular campaign is negotiated and agreed upfront before a campaign is initiated. The remuneration models are described below
- Cost per click (CPC): Affiliate is paid by the merchant each time an end user/consumer clicks on the advertisement.
- Pay per sale: Affiliate earns the commission every time a purchase is made on the merchant’s website by a visitor, referred to them by the affiliate.
ii. % of Sale (tiered) - This works with the concept “More number of sales, more the commission”. E.g. When sales exceed $X then affiliate commission is Y%.
- Pay-Per-Lead: Affiliate earns a commission for every visitor that was redirected by the affiliate to the merchant’s website and performed some action, like filling out a registration form or opening an account and so on. This model commonly used in cell phone, banking, credit card or mortgage sectors.
- Cost per Impression: Affiliate gets paid a specified sum for every thousand impressions including the Page Views or Displays of the advertisement.
Intermediary Payout Models
Intermediary can get remunerated in any of the below ways
1) Based on the mutual agreement with the merchant when the latter agreed to accept the intermediary services to get linked with potential affiliates & joined them.
2) Based on the sales/leads/clicks generated by the affiliates.
3) For the services they render to affiliate and merchant to manage their business activities.
CAMPAIGN EFFICIENCY MEASUREMENT
Click through Rate (CTR): Way of measuring the success of online advertising campaign.
Click Through: Process in which the merchant website gets opened by a click performed the consumer with intent to see the product. CTR- Number of Clicks/Number of Impressions
Please add your comment if you want to get it improvise or you want any further info !!
Keep looking this space for the next article about A Real World Example in AFFILIATE MARKETING.. Happy reading & Regards :)