Aug 4 2009

2 Tier Affiliate Programs Explained. Interesting Information to Be Aware of

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How will refering new affiliates to an affiliate program make me money in the future? Thats where a 2 tier affiliate program works like magic!

Affiliates are getting cleverer by the day. So these days, affiliates know the difference between the different types of traffic they can get paid for. There are many definitions though – CPM, CPC, CPA, CPL, CPD and many more.

CPM is impressions, when the publisher (the website owner) gets paid every time a banner is shown.

CPC is clicks, where the publisher (or e-mail marketer and other marketers) gets paid every time a banner or text link is clicked upon.

The additional ways of getting paid are grouped together under the term performance marketing – and this is where the term affiliate is most commonly used as well.

An affiliate is a marketer who sends visitors to another site using a variety of methods (for instance placing banners or text links on their own site, buying sponsored listings on search engines, e-mail marketing and many other different methods) and gets paid when an action happens. This action can be a lead (CPL stands for Cost per Lead), a Sale (CPS stands for Cost per Sale), a download (CPD stands for Cost per download) and many other variations.

Some in the Internet industry refer to performance based marketing as CPA (cost per acquisition), although the term is as well sometimes used for certain types of campaigns for instance leads or sales.

Now that we’ve got over the hard part, the rest is simple to comprehend.

The affiliate gets paid for sending visitors to a specific landing page where an action happens – either a lead, a sale, a download or some other sort of action that the advertiser requires. As an example, some advertisers are looking to build up their databases, so they pay for each opt in e-mail address they receive, others want leads from particular locations, so they pay for zip codes, and then try convince the visitors after they fill in their zip code, to fill in a more full lead form.

The general denominator is that the affiliate gets paid when an action happens.

A 2 Tier affiliate program is simply finding new marketers to sign up under you to do EXACTLY what you are doing – sending visitors to different offers and getting paid when the visitors perform some sort of action. So why would you want other marketers to sign up under you to promote the same offers? Simple – you get paid a percentage of the sum the affiliate you refer gets paid? Sounds complicated?

Don’t worry, it’s not hard to understand. As an example, say John promotes 5 different offers on a single affiliate network. He gets paid for every lead, sale, email and zip code he generates from these different offers. John now tells Mark about the Network and gets Mark to sign up using a banner or text link that has John’s referral code built into it. Mark now signs up to the Affiliate Network under John and starts promoting various offers and advertisers from the Affiliate Network. These offers DON’T have to be the same offers that John is promoting. Mark can promote ANY of the offers on the Affiliate Network.

And this is the best part…

For any amounts that Mark gets paid, John receives a percentage of the sum over and above what Mark gets paid. So if Mark gets paid $1000 in Month 1, and the 2 Tier Affiliate program is paying 5%, then John would be given $50 just for referring Mark.

But it gets even better…

Some 2 Tier Affiliate Networks pay LIFETIME commissions. So John wouldn’t get a referral commission just for a month or a year – he receives it FOR ALL TIME.

If Mark becomes a super affiliate and starts generating HUGE commissions every month, John can just sit back and collect the checks as he referred him.

There are 3 significant things to understand when finding affiliates to sign up under you on 2 Tier Affiliate Programs:

Is the affiliate program or affiliate network credible, has appropriate tracking so your referrals are correctly tracked, has good campaigns and offers for the affiliates to promote so they really do make money, and do they pay timeously? Assuming that the affiliate program or network is good, what percentage do they pay you on amounts that your referrals get paid? All programs vary so compare different programs to see what the industry standard is.

How long do you continue receiving referral commissions for? Some pay for a month, some for the lifetime, and certainly there are many variations in between.

So do your research and find a 2 Tier program that can make you money long in the future for the work you’re doing at present.

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