Along with PPC, affiliate marketing is fast becoming one of the more popular methods of promoting businesses online. An affiliate marketing program basically consists of an affiliate and a merchant. The affiliate displays the merchant’s banners and sends visitors to the merchant’s site. In return he is paid by the merchant for every sale that is generated through the visitors sent by him.
So is affiliate marketing a better option to PPC? Well, one of the biggest differences between PPC and affiliate marketing is the action that you pay for. While you pay for every click in the PPC model, in affiliate marketing one only pays for each conversion (sale or lead generated). Hence, the merchant only pays performing affiliates and never incurs a loss as such. In PPC he has to pay for every visitor, irrespective of the final conversions.
On the flip side, setting up an affiliate program is more complicated and takes longer. Further, one needs to continuously monitor their affiliates’ performances and watch for competitors who may try to woo the affiliates away by offering a better commission.
Both, PPC and affiliate marketing have their pros and cons… While PPC can be easier to set up and manage affiliate marketing, if managed well, can lead to much better return on investment.