Affiliate marketing is one of the easiest methods of making money online. Virtually anyone can sign up for most affiliate marketing programs, and best of all, marketers do not need to go through the trouble of having their own products or services. Instead, they are paid for promoting whatever products or services they choose by generating leads and sales for various merchants. However, succeeding in this kind of marketing requires thorough understanding of how it works. The following are some of the most common types of affiliate marketing:
Pay Per Click (PPC)
PPC is one of the most popular forms of affiliate marketing and for a good reason – it is one of the easiest to get started in. Essentially, the affiliate is paid by the merchant whenever they send a visitor to the merchant’s website. This happens when a visitor clicks on a banner or text link located on the affiliate’s website. The benefit to this type of affiliate marketing is that the affiliate gets paid regardless of whether or not the visitor actually buys a product or service from the merchant. On the downside, affiliates will only earn a small payout, usually $1.00 or less per click. Therefore, anyone trying to a lot of money from this type of marketing has to know how to generate heavy web traffic.
Pay Per Performance (PPP)
PPP is different from PPC in that the affiliate only gets paid when the visitor that they refer to the merchant’s website performs some type of action. PPP can be broken down into two distinct categories. If the affiliate is paid when the visitor purchases a product or service, this is called a Pay Per Sale or PPS program. If the affiliate is paid when the visitor fills out a form or application, this is called a Pay Per Lead or PPL program. In either case, both PPS and PPL programs pay out more than PPC programs. In fact, it is not uncommon for affiliates to earn up to 70% of the total sales price in PPS programs. PPL programs typically pay in the range of a few dollars per lead, but may pay 
considerably more depending on the merchant. Insurance companies and lawyers for example pay a premium price for leads because of how valuable they are.
Residual Income Affiliate Marketing
Residual income affiliate marketing is different from the other programs in that the affiliate is not only paid for the first product or service that the visitor purchases from the merchant, but any subsequent purchases as well. For example, if the visitor signs up for a monthly subscription, the affiliate will continue to earn a commission each month, so long as the visitor’s subscription remains active. These types of affiliate programs can be extremely lucrative because the affiliate earns more from each visitor than they would if they only received a onetime commission. In other words, they are getting a much greater return on their marketing efforts. However, these programs generally pay a lower percentage for each sale. Furthermore, since only the best products keep customers paying subscriptions over time, the competition will be fierce.
