Affiliate marketing is a form of internet marketing where advertisers reward their partners (affiliates) for generated sales or provided leads. Affiliates accomplish this by placing ads of advertisers on their website. If referral of customers results in a sale or lead, the affiliate receives a compensation from the advertiser. Payment also occurs per click or pageview.
Affiliate Marketing is based on the no cure, no pay principle. Compensations are only paid with tangible transactions and (approved) leads. These can be shown administratively, however, affiliates remain dependent upon advertiser feedback and agreements made.
Pay per click
A fixed amount paid per click on promotion material from the advertiser, based on the eCPC, the Effective Cost Per Click, which is calculated based on the average yield for each visitor provided and/or received.
Pay per lead
Lead compensations are paid when visitors contact the advertiser through the affiliate, for example by completing a form. Lead compensations are often paid for promotion of services not directly sold online.
Pay per sale
A compensation paid when visitors generate immediate sales through an affiliate, which usually comes down to selling a product to a visitor. The advertiser pays the affiliate a percentage of the retail price.