Affiliate Program Guide

SUMMARY: Pay per click affiliate programs pay affiliates a small amount for every click-through they generate. In other words, they are rewarding affiliates for sending them visitors. There are some advantages to such a relationship, but better-performing affiliates will almost certainly be better off under a flat-fee or commission-based affiliate arrangement.

Advantages of Per-Click Affiliate Programs

• You get paid for every visitor you send to the target site (or for every visitor that clicks somewhere on the landing page in the case of second-page-click programs), and not just for the small subset of visitors who go on to buy or sign up for something
   
• Most pay-per-click programs provide excellent, detailed real-time or near real-time statistics on how many clicks you've delivered so that you can keep track of your earnings very easily
   
• It doesn't take much effort to take advantage of this kind of program: just put up a banner or text link to the target site and you're in business... there's not a lot of pre-selling required to generate a click!

Disadvantages of Per-Click Affiliate Programs

• Some programs cap the click-through ratio
  While touting this measure as an anti-fraud protection, some pay-per-click programs cap the payout you can receive based on the ratio of the number of ads you display against the number of people who click through those ads. This can hurt your potential income if you have an extremely relevant, targeted site. For instance, the program may refuse to pay for any clicks generated in excess of a 5% click-through rate (i.e. if more than 1:20 of the people seeing the banner or text link are clicking through to the destination site)
  
  Example: a program with a click-through ratio cap of 5% and a payment of $0.03 per click-through would limit your earnings to a maximum of $0.60 per 1,000 ads that you display, no matter how many people actually click through those ads. While a click-through of 5% may sound higher than most sites will achieve in practice, it may be foolish to artificially limit your earning potential.
  
  Advice: Always read the small print of the Affiliate Agreement very carefully, since this kind of restriction is usually buried somewhere under a ton of legalese. Try and understand the effect of this kind of restriction by working out a specific "best-case" example like the one above and seeing what impact it would have on your earnings.
   
• Some programs are optimized for failure
  This is a dirty little secret of the affiliate industry: through incompetence or by design, many click-through based programs have been conceived in such a way as to rip off affiliates. How? By offering a selection of banners, text links and other promotion tools that are designed to "brand" (i.e. to leave visitors with a lasting memory of the company - or product - being advertised) but without a specific call to action that would encourage people to click through (and hence you to get paid)
  
  Advice: Take a long, hard look at the promotional material that the affiliate program is offering you to assist you in driving traffic to their site. Is it action-oriented (e.g. "Click here now to download your FREE screensaver") or branding-oriented (e.g. "Call 1-800-CAR-LOAN to save money on your new car loan") If the ad creatives on offer are of the branding type, your solution is simple: don't participate in this particular program, but walk away fast!
   
• Your revenue accrues very slowly
  Unless you have tens or hundreds of thousands of visitors per month, your earnings are likely to increase at a snail's pace since you're only earning a few cents per click.
  
  Advice: If your site only receives a few thousand visitors a month or less, you're likely to earn a lot more by carefully selecting highly-targeted commission-based or lead-based affiliate programs.
   
• You never reach the minimum earnings threshold
  Many affiliate programs set a minimum earnings threshold the amount of money that you have to earn before you will receive a check) that is totally disproportionate to the amount you are receiving per click.
  
  For example, you may find an affiliate program that pays $0.02 for every click, but which has a minimum earnings threshold of $50. This means that you would have to send 2,500 clicks to the program before you can receive your first check - in practice, most smaller sites will never achieve this level and so all the effort they have put into generating revenue has been for nothing. (The majority of affiliate programs keep the amount under the minimum when an affiliate leaves the program - it's a very annoying practice, and decidedly unfair, but it's so widespread in the affiliate industry that it's hard to know where to begin pointing fingers!)
  
  Advice: Do the math! If your site traffic is so low that it will take years for you to earn even the minimum amount, forget about per-click programs and try and select very relevant commission-based and lead-based programs programs instead. Remember, if the company goes out of business before you receive your check, you're going to be out of luck, so it's important to earn your way to the minimum amount as quickly as you can!
  
  WARNING! A few highly unscrupulous affiliate programs reset your earned commission to $0 at the end of every pay period (typically quarterly or annually.) If you do not exceed the stated minimum earnings threshold by the time they come to reset your commissions, you will lose ALL accumulated earnings and be back at square one! Always read the fine print, and NEVER sign up for a program that resets your commission if you fail to meet targets over given a period of time. There is no commercial justification for this practice - it's just a way for companies to take money out of the pockets of hard-working affiliates.

BACK: Go back to the guide to different types of affiliate program