Affiliate marketing can be monetized in a number of different ways. Here’s a short guide to compensation models that will help you make the right decision in terms of the remuneration to be allocated to your affiliate program.
Cost Per Action (CPA)
Cost Per Action is the most widespread remuneration model in affiliate marketing. The advertiser pays a commission every time a sale is generated.
Example
An influencer shares a story containing a link to a €100 product. Someone in their community clicks the link and makes a purchase. The affiliate/influencer then earns a percentage of the sale according to the commission terms shown in the marketplace.
Cost Per Click (CPC)
Cost Per Click means the advertiser only pays when someone actually clicks a link placed on the affiliate’s site.
Example
In a blog post containing product links, a reader clicks through to the merchant’s site. The affiliate—the blog author—earns a click-based payment.
Cost Per Lead (CPL)
Cost Per Lead (or cost per registration) rewards the affiliate for every visitor who signs up on the advertiser’s site, usually by completing a form.
Example
A blog article promotes a special offer. The visitor fills in a registration form on the merchant’s site to access the promotion. As soon as the registration is submitted, the affiliate earns a lead-based commission.
Cost Per Mille (CPM)
Cost Per Mille means the advertiser pays for ad space calculated per 1,000 impressions.
Example
An affiliate sells banner space on their website to promote a merchant. They earn € x for every 1,000 ad impressions.
Fixed Fee (FF)
A Fixed Fee is a one-off amount paid for a specific placement or piece of content.
Example
An affiliate is paid € x for an Instagram story featuring the advertiser’s product. The story is published once, and the affiliate receives the agreed-upon flat fee.
Product Gifting
Product Gifting (sometimes combined with CPA or a fixed fee) consists of paying the partner with a product they select in advance, in addition to—or instead of—monetary compensation.
Example
An affiliate receives a dress to showcase on Instagram. They feature the dress on their social channels and keep it as their form of remuneration.