Affiliate Marketing commissions
Affiliate Marketing is based on the idea of making the website operators become your advertising partners. In affiliate networks, merchants (those who want to advertise) and the publishers (website owners who want to incorporate ads in their sites) come together. For previously defined actions, publishers receive commissions from the advertiser. The most common pricing models are Pay-Per-Click, Pay-Per-Lead and Pay-Per-Sale.
Affiliate commissions are only paid for successes
Costs in the form of commissions are incurred for the merchant only if the user clicks on the ad and takes a specific action, for example, if he purchases on the web page of the advertiser. Commissions paid per clicked advertisement are usually quite inexpensive, because clicking on an ad may lead the visitors to the website, but they may not execute any actions intended by the advertiser. Those visitors who come to a website through an affiliate link and sign-up for the newsletter, send a contact request, or join a community, mean higher commissions to the merchant, because a lead has been generated that can be converted into a sale (Pay-Per-Lead). In such a case, the publisher gets a higher commission for the user action. If the user makes a purchase, the commission payable is calculated as a percentage of the purchase value. Hence, the higher the purchase value, the higher the affiliate cost and the commission received by the publisher. By the way, a specific action may not be completed immediately after clicking on the advertisement: cookies set on the user’s computer when they click on the affiliate link can have a validity of 30, 60 or even 90 days. So, if the visitor leaves the page, but returns later and completes the action intended by the merchant, the publisher still gets his commission.
The commission for the publisher can be determined on an individual basis, so that the merchant has the possibility to grant special terms to particularly successful partners.
Commissions for publishers and network
When determining the costs of Affiliate Marketing, the costs for the usage of the affiliate network must be taken into account. A fee for the network operator occurs with each click. This is mostly a percentage share. For example, if the merchant pays 1.50 Euros commission for the lead, and the affiliate network requires 30 percent for using the network, then the final costs would be 1.95 Euros (1.50 Euros commission and 0.45 Euros for the affiliate network, net price).
