Online Marketing ModelsMerchants use a variety of models to structure performance-based payments to publishers. These vary in the amount of the payment and overall penetration, but each is completely trackable, allowing the merchant to pay only for performance.
Performance Marketing (also called CPA)
Merchants use a variety of models to structure performance-based payments to publishers. These vary in the amount of the payment and overall penetration, but each is completely trackable, allowing the merchant to pay only for performance. With performance marketing the advertiser pays a preset amount based on results they define. These payments are for a specific action and the amount paid is determined by the advertiser.
Percent of Sale
This is the most common way that retailers pay. It requires that a visitor to a publisher’s Website not only click on the advertiser’s link but also make a purchase in order for the publisher to receive a commission.
This is the most common payment method for customer acquisition for service and subscription type products and services. Commission rates are often determined by the advertiser based on the actual or estimated lifetime value for the customer.
Lead generation (also known as lead-gen) requires that the consumer fill out a form. The length and complexity of the form often determine the amount that is paid for the lead.
Other Online Advertising Models
There are several other online advertising models that are not typically performance-based. These models are more often used for generating traffic and/or branding.
CPC (Cost per Click) or PPC (Pay per Click)
Advertisers pay per click. Click prices range anywhere from $.05 to $5 or more depending on the ad or keyword. CPC is primarily implemented via search engines and other contextual based ads.
CPM (Cost per Thousand)
Cost per thousand is based on advertising bought on the basis of impressions. The total price paid in a CPM deal is calculated by multiplying the CPM rate by the number of CPM units. For example, 1 million impressions at $10 CPM equals a $10,000 total price. The amount paid per impression is calculated by dividing the CPM by 1,000. For example, a $10 CPM equals $.01 per impression. CPM leaves the greater risk and loss (if the visitor can not be converted) to the advertiser.
Ready to Get Involved?
Any company or organization and select individuals who are committed to improving the Performance Marketing industry are eligible to join the Performance Marketing Association. Membership can be initiated at any time and dues are renewed annually.
Please click on the Membership Levels below to learn more about member benefits.