Payment models

This article is focused on the payment/payout models between an affiliate marketer or media buyer and an advertiser who provides the offers for running. On Adavice DSP you buy traffic to run the advertising campaign. Adavice DSP is not held responsible for the terms & conditions set between the advertiser/affiliate/media buyer.

In today’s article, we will touch upon different payment models that exist in affiliate marketing. Navigating the terminology and the payout differences is essential for both affiliates and advertisers. As an affiliate, you pay for the traffic while the advertiser pays you for bringing conversions. The concept of payout directly influences the understanding of the offer’s flow and what actions are considered a conversion. Offers have different goals and specifics thus advertisers may set different payment methods.

In this article, we will discuss the main types of payment models, and their advantages, and finally talk about THE BEST payout to start with! Giddy up ;)

Payment models: Types

The model of payment starts from understanding how affiliate marketing works. After choosing the offer to run there are plenty of actions the affiliate marketer needs to undertake. From choosing the ad type to creating a campaign and setting the correct bidding.

PRO TIP: On Adavice DSP you will find various ad types to run: push (classic, inpage, and calendar), pop (classic and domain), native ads, and display. Make sure to try out different variations to find what matches your offer! Write to your Support manager for a consultation.

Learn more about affiliate marketing basics in Adavice Blog!

The final goal of any campaign is to attract users to the Landing page and guide them to perform the targeted action/conversion. This is where payment models step into the game.

Today, we’ll mainly focus on 3 payment models: CPC, CPM, and CPL. These are the most popular choices for both advertisers and affiliate marketers! Let’s take a look at their peculiarities.

CPC

CPC is the simplest of models to understand. CPC refers to Cost per Click advertising where the affiliates get paid for every click that is made. Some CPC campaigns may run effectively but the biggest advertiser’s issue is the fraud traffic using bots and various solutions to increase the amount of clicks to the Landing.

CPM

CPM (Cost per Mille) is the Cost per Thousand impressions. This model is probably the most commonly acquainted by the affiliates. CPM stands for how much it costs to view the ad to 1000 users. Here no conversions are involved in the calculation, you simply get paid for every time the ad is loaded on the page or in an application.

CPL

CPL or simply Cost per Lead is a payment model with which you get paid after the user submits their personal information on the Landing page. The content that gets submitted via the registration field on the offer is usually decided by the advertiser: email, phone number, name, etc. CPL payout mainly includes sweepstakes, lead generation offers, and vouchers. CPL is greatly convenient for beginner affiliates because of its simplicity and good results for low-budget promotions.

Let’s take a look at some other payment models on the market:

CPA

CPA stands for Cost per Action. The CPA model’s effectiveness relies on the number of target actions performed by the users. Such actions are predefined before the launch of the campaign by the advertiser. The “actions” in CPA payout offers may vary from registration to purchase or conversion. CPL offers are a part of the CPA model, so we will talk more about them later in the article.

CPI

CPI or Cost per Install offers are another variation of the CPA model. The targeted action that the user has to perform is the final install of the advertiser’s application. Here the offers can have different device targeting: mobile or desktop. Find both devices available for targeting on Adavice DSP!

CPS

CPS (Cost per Sale) is the last CPA model we’ll discuss today. The desired final action here is the sale done on the Landing page. Mostly used in e-commerce offers, CPS is perfect for those whose funnel’s aim is to lead the user to purchase the advertised product or service.

CPC, CPM, CPL: Pros

It is time to talk about the big three: CPC, CPM, and CPL. Let’s talk about the most used payment models in affiliate marketing and their advantages.

CPC model’s pros:
1) Perfect for driving big amounts of traffic to the advertiser's website
2) Low risk for affiliates compared to other acquisition models because all the costs are covered per the model’s nature
3) Variety of offers and verticals

CPM model’s pros:
1) Relatively low risk for affiliates, the payment isn’t influenced by user behavior
2) A popular model for running banner ads, natives, and popunders
3) Increases brand awareness

CPL model’s pros:
1) Used in lead-generation campaigns
2) Easy model for beginner affiliates
3) A perfect model for e-commerce, high-value products, subscription-based campaigns
4) A good model for low-budgeted campaigns

Honorary mention of CPA

CPA is on the rise with more and more advertisers (casino, forex, sweeps, nutra, etc) specifically working with media buyers that can deliver traffic based on CPA payouts.

CPA model’s pros:
1) On-demand with casino, forex, sweeps, nutra, and other verticals
2) Suited for many ad formats
3) High ROI campaigns with the right testing plan and optimization

What payout model to choose

“What payment model is THE BEST?”. The question that still raises between newbies and professional affiliate marketers.

It is fair to say that there is no true answer to this debate. Each payment model is different and has its own purpose both for advertisers and affiliates. The CPL model will be used in lead gen, while CPC can be met in the gambling vertical. The offer’s payout will mainly depend on the funnel complexity and flow.

According to statistics you can stumble upon CPA offers more frequently than other models but it does not mean it is better than the other ones. When choosing the payment type advertiser proceeds from a variety of facts and chooses the model that suits the flow and the campaign’s purpose the best.

All of the models have their disadvantages and risks for affiliates. The model often accepted by beginner affiliates is CPA. However, make sure to precisely plan the promotion and optimize based on the results to reach a higher profit and improve the results for the advertiser. CPA offers have room for creativity, optimization, and testing of various ad types.

Adavice DSP Team will gladly help you achieve all your promotion goals! Get in touch with your personal Support manager to get help and verticals insights or email the team at sales@adavice.com 🙂