Pay-Per-Click Affiliate Programs

Pay-per-click (PPC) programs pay affiliates each time a link is clicked on their site. Google Adsense is the most popular PPC program, and in many ways it revolutionized the affiliate marketing arena, as it opened ip a whole new way of making money.

The way PPC programs work is that merchants or advertisers (basically people selling things or trying to draw traffic to their website) sign up, and agree to spend a certain amount of money for each click that is generated by an affiliate. In the Google world, merchants and advertisers sign up at Google Adwords and create a campaign in which they make their ad and set their budget, as far as how much they’re willing to pay per click for certain keywords.

So that’s where the money comes from that pays you, the affiliate, when you display Google text ads on your site and someone clicks on them. Google is the middleman man and pockets some cash each and every time, as they don’t pay you the full amount the merchant or advertiser is paying.

We’re all pretty used to the PPC model these days but the reason it was such a game-changing event when it rolled out is that suddenly affiliates could make money on topics that they could never monetize before. Before PPC, the only way to make money as an affiliate was to refer surfers on your site to a retailer via a link, where they had to buy something, at which point you’d get a piecce of it as commission. But that involves a sale, and it’s notoriously hard to convert surfers to buyers, so it was harder to make money, and you usually only started making real money months down the line when your affiliate site had lots of traffic.

Not so with PPC, as you can immediately start generating income from something as simple as a click on a link, with no purchase required. It also opens up all sorts of areas for affiliate sites, as you simply have to write about a topic that people search on (and that advertisers and merchants bid on, on the Adwords side of things) in order to potentially make money. Suddenly sites about pet rats or the Civil War could be profitable, even if there are no merchants out there with affiliate programs to hawk products for. Create the site, add some Adsense links, and presto, you can make some money from people clicking on the Google ads on your pages.

One thing to be aware of, though, is the potential trade-off of PPC versus traditional affiliate programs. If your site is about home theater systems, you have to be careful that you don’t go with PPC and unintentionally cost yourself tons of money. With a traditional program, you get paid a set commission based on what people you refer buy. For a lot of retailers, it’s typically something like 2-6% commission. Some programs pay you that for the life of the customer, some don’t, the details vary from program to program. What you need to be aware of, though, is that if your affiliate site is geared towards relatively high-ticket items, you probably want to avoid PPC, even though it’ll give you a more immediate return, as far as making money. While it’d be great to make $20/month from Google Adsense clicks, it doesn’t take too many surfers going on to spend lots of money with the retailer to cost you money, as you might otherwise be receiving 5% commission on their purchases for life.

Your monthly earnings are steadier in PPC programs and much more dependable (as they’re really just a function of your overall traffic), but they also don’t have the potential upside that traditional programs do, if you land a few whales that go on to spend tons of money.

Pay-Per-Click Affiliate Programs and related information can be found in Adsense, Adwords, Glossary