It is difficult to tell when the first affiliate marketing program was started. The revenue sharing agreement between merchants and the affiliates must have emerged as the first affiliate program. The affiliates are concerned about their commission and the merchants take care that their single penny does not go wasted. An affiliate marketing program contains the rules for displaying advertisement and credentials for earning commission. There are three popular affiliate marketing programs Cost-per-Click (CPC), Cost-per-Lead (CPL) and Cost-per-Sale (CPS). We will discuss the benefits of each program for a merchant and affiliates one by one.

Cost-per-Click (CPC): Cost-per-Click program is best suited for those advertisements, who are satisfied with the clicks on their advertisements. The merchants give commission to affiliates on the number of clicks. Every time a visitor clicks on the advertisement the affiliate is entitled to furnish commission claim. CPC program has a loop hole. The merchant never comes to know whether a visitor has deliberately clicked on the advertisement or not. If the advertisement has received clicks accidentally then they are of no use to the merchant but the affiliate is entitled to furnish claims.

Cost-per-Lead (CPL): Cost-per-Lead affiliate program generates leads for the merchants and commission for the affiliates. A lead means contact details of a visitor. The merchants use several ways to get leads out of advertisements displayed on the affiliate sites. The most popular method used in CPL program is free news letter. The visitors of an affiliate site click on the advertisement and give their contact details for receiving a free news letter. Some merchants publish lead generating forms along with their advertisements. The visitors interested in the displayed good are requested to fill the form for further correspondence with the merchant. The affiliates get commission whenever a visitor fills lead form or signs in for a news letter. Cost-per-Lead is best suited for selling loan programs.

Cost-per-Sale (CPS): Cost-per-Sale is the favorite program of merchants. They give handsome commission to affiliates whenever a sale is furnished. The affiliates use landing page to pursue a visitor for buying the displayed product. It is called pre selling technique. Clicking on the advertisement lands a visitor on a separate web page, which is designed by the affiliate to tell more about the advertised product. They want to be sure that a visitor will buy the advertised product before directing their visitors to the merchant’s selling page.

It is imperative for an affiliate to maintain record of clicks, leads and sales generated through his or her website. The affiliates furnish commission claims on the basis of this record. The merchants too cross check their claims before releasing payments. They use affiliate tracking software for this purpose. The affiliate and the merchants have to invest their precious time in keeping record and cross checking claims. Sometimes it affects their performance.