The different commission models applied through affiliate programs have been relatively stable through the years but the newest kind of marketing has pressed the necessity for both partners and the manager to fully understand the different commission models.
In this article we will discuss the 10+ distinct affiliate marketing commission models: sponsorships, pay-per-sale, pay-per-lead, pay-per-click, pay-per-impression, two-tier commissions, recurring commissions, multi-level marketing, and cost-per-action. After that, you would be able to differentiate and single out which strategy helps you meet your desired objectives.
Either you are a business planning to launch an affiliate program or an affiliate looking to scale up your earnings, this article will help you visualize the important steps you need to take.
Cost Per Sale (CPS) – CPS is a commission model where affiliates earn a percentage of every sale directly attributed to their marketing efforts.
Cost Per Action (CPA) – CPA is a fixed-fee model rewarding affiliates for achieving specific actions, such as a subscription, download, or purchase, predetermined by the advertiser.
Pay Per Click (PPC) – PPC compensates affiliates for each click on links or banners they promote. Each click earns a set amount, incentivizing high traffic generation.
First Time Deposit (FTD) – FTD is a reward model where affiliates are compensated when a referred customer makes their first deposit, popular in industries like finance and gaming.
Deposit (DEP) – DEP pays affiliates for any deposit made by their referred users, motivating continuous customer financial interactions.
Registration (REG) – REG rewards affiliates for every new user registration, focusing on increasing sign-ups or user base expansion.
Cost Per Install (CPI) – CPI is a performance model that rewards affiliates for every installation of an app or software, frequently seen in mobile app and software campaigns.
Cost Per Lead (CPL) – CPL compensates affiliates for generating leads, such as completed sign-ups or filled subscription forms, emphasizing customer acquisition.
Cost Per Thousand Impressions (CPM) – CPM pays affiliates based on the number of times an ad or link is displayed to users, with earnings calculated per 1,000 impressions.
Lifetime (LTV) – LTV offers affiliates a share of revenue from all future purchases or transactions made by a referred customer over their lifetime, providing long-term earnings.
Revenue Share – Revenue Share rewards affiliates with a percentage of the revenue generated by the referred customer, often used in subscription-based or recurring revenue industries.
Pay Per Lead (PPL) – PPL offers payment for each lead generated, such as a user registration or completed form submission, with a focus on actionable prospects.
Pay Per Sale (PPS) – PPS rewards affiliates for every sale made through their affiliate link, often structured as a percentage of the transaction amount.
Cost Per Mille (CPM) – CPM, also known as "Cost Per Thousand Impressions," compensates affiliates for displaying ads or links, with earnings calculated per 1,000 impressions.
Tiered Commission – This model provides different commission rates based on performance levels, sales volumes, or milestones reached, motivating affiliates to achieve higher tiers.
Flat Fee – Flat Fee offers a fixed payment for specific actions, such as publishing a sponsored post, article, or promoting a campaign.
Lifetime Commission – This model ensures affiliates earn continual revenue from customers they refer, based on all future transactions or recurring activities.
Hybrid Models – Hybrid Models combine different commission structures, such as CPA and Revenue Share, offering affiliates flexible earning opportunities tailored to campaign goals.
Multi-Level Marketing (MLM) – MLM allows affiliates to earn commissions on their sales and the sales made by their recruits and their recruits' network. While it can resemble a pyramid scheme if focused on recruitment, it is legitimate when centered on product or service sales.
Every business selects payment options for affiliates based on their unique goals and strategies, but from our experience, the popularity of these models varies across industries. Here's an approximate breakdown by niche to help guide your choices.
| Model | E-commerce | Finance | iGaming | SaaS | Health & Wellness | Mobile Apps | Education | Travel |
|---|---|---|---|---|---|---|---|---|
| CPS | High | Medium | Low | Medium | High | Low | Medium | High |
| CPA | Medium | High | High | High | Medium | Medium | High | Medium |
| PPC | High | Medium | Medium | Medium | Low | Low | Low | High |
| FTD | Low | High | High | Low | Low | Low | Low | Low |
| DEP | Low | High | High | Low | Low | Low | Low | Low |
| REG | Medium | High | High | Medium | Medium | Medium | High | Medium |
| CPI | Low | Low | Low | Low | Medium | High | Low | Low |
| CPL | High | High | Medium | High | Medium | Low | High | Medium |
| CPM | Medium | Medium | Medium | Medium | Medium | Medium | Medium | High |
| Lifetime (LTV) | Medium | Medium | Low | High | Medium | Low | Medium | Medium |
This table serves as a guide to choosing the most effective affiliate models based on industry requirements.
Affiliate commission types are a cornerstone of any successful affiliate marketing program, making them an essential feature in high-quality affiliate tracking software. The ability to customize commission structures ensures that businesses can align affiliate rewards with their specific goals, whether it’s pay-per-sale, pay-per-click, or recurring commissions. In today’s competitive landscape, the flexibility to adapt commission models is no longer a luxury—it’s a necessity. At Tracknow, we prioritize this need by offering support for a wide range of affiliate commission types, giving businesses the freedom to create programs tailored to their strategies. Our software streamlines the setup and management of commission structures, allowing advertisers to focus on driving results rather than navigating complexities.
“Besides, the provision of different commission models does not only attract a broader audience but also provides many options to affiliates so that they can engage in synergy with one another”, says Vlad Soloviev, Business Development Manager of Tracknow.
With Tracknow, businesses can optimize their affiliate programs, experiment with different models, and maximize their ROI. This makes our solution a perfect fit for companies looking to stay ahead in the evolving affiliate marketing space. At the heart of Tracknow is a commitment to empowering businesses through precision, customization, and innovation in affiliate program management.
The understanding of various affiliate marketing commission models is a must-have constituent in developing an affiliate program that will attain success or as a way of affiliates getting maximum earning. Such as pay-per-sale, pay-per-lead, pay-per-click, pay-per-impression, two-tier commission, recurring commission, multi-level marketing, and cost-per-action are different models that have their specific advantages and principles.
The right choice of the commission models that are orally class-based depending on the compatibility with their needs and the targeted audience is the core of the affiliate programs (AP) of businesses. This model flexibility will also attract more and better affiliates and make companies grow.
Tracknow Affiliate Software underpins all the commission models based on their flexibility; consequently, it is your business that sets the tone of the whole enterprise. To find out more about the types, configurations, and technical details, click here. You can also contact our specialists for further assistance.
Affiliate commissions are typically categorized into the following models: Cost Per Click (CPC), Cost Per Acquisition (CPA), Cost Per Sale (CPS), Cost Per Lead (CPL), Cost Per Impression (CPM). Affiliate software helps track and manage these commission models by recording the actions that trigger commissions.
Affiliate tracking software generates unique tracking codes for each affiliate. These codes:
Affiliate software allows merchants to configure the preferred attribution model, ensuring commissions are awarded fairly based on their strategy.
Fraud detection tools in affiliate tracking software monitor suspicious activities, such as:
Yes, most affiliate tracking software supports a variety of commission models. Advanced affiliate platforms allow hybrid models, such as a combination of CPA and CPS. They also offer features like:
If you’d like further details about implementing or choosing the right tracking software, feel free to ask!
Vlad Soloviev
Business Development Manager
