Pay per sale

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Pay-per-sale or PPS (sometimes referred to as cost-per-sale or CPS) is an online advertisement pricing system where the publisher or website owner is paid on the basis of the number of sales that are directly generated by an advertisement. It is a variant of the CPA (cost per action) model, where the advertiser pays the publisher and/or website owner in proportion to the number of actions committed by the readers or visitors to the website. [1]

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In many cases, it is impractical to track all the sales generated by an advertisement. However, it is more easily tracked for full online transactions such as selling songs directly on the internet. Unique identifiers, which can be stored in cookies or included in the URL, are used to track the movement of the prospective buyer to ensure that all such sales are attributed to the advertisement in question.

Telephone Call Tracking Pay-per-Sale

Some companies handle transactions "offline," meaning sales driven by online traffic are closed via inbound telephone calls or in person rather than online. This model bridges the gap between online and offline platforms. [2] In these cases, a cookie-based rotating system of telephone numbers can be used to accurately trace a phone call to the source online visitor. This way, a phone call that converts into business can be traced to the keyword search term that drove the phone call. As a result, bids on the source traffic can be appropriately adjusted and managed. Usually, it is the advertiser that determines what constitutes a valid lead or a qualified call to be paid. [2]

Pay-per-Sale Search Engine Marketing

Pay-per-Sale Search Engine Marketing is a variant of pay-per-sale, whereby the traffic source is largely search engine traffic, such as that from Google's AdWords "pay-per-click" system. The business model means that merchants no longer bear the cost of "pay-per-click"; instead, the "pay-per-sale" provider takes on the risk of conversion.

CPS belongs to the larger family of CPA, which is different from Cost Per Impression in which advertisers pay every time their advertisement is displayed, irrespective of whether the display created any action on the part of the reader or visitor to the website or not.

Affiliate Networks in Online Marketing

Affiliate Networks usually offer the "pay-per-sale" business model and have done so since inception. These are firms that manage affiliates for their clients and often work with websites that accept advertisements. [3] The industry has four core players: the merchant (also known as retailer or brand), the network, the publisher (also known as 'the affiliate'), and the customer. Typically, affiliate networks such as ValueClick or Commission Junction will connect merchants (advertisers) with publishers, or owners of sites, which can send traffic to the merchants' sites in exchange for a bounty, or commission for each sale delivered. [4]

However, there is typically an upfront set-up fee, as well as monthly minimum charges for the advertiser, in addition to relatively stringent requirements around entry into the network to begin with. An individual or an organization could also set up his or its own affiliate network. This could address one of the risks of this model, which is less commitment on the part of the affiliates. [3]

See also

Related Research Articles

Affiliate marketing is a marketing arrangement in which affiliates receive a commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to outsource part of the sales process. It is a form of performance-based marketing where the commission acts as an incentive for the affiliate; this commission is usually a percentage of the price of the product being sold, but can also be a flat rate per referral.

Cost per impression (CPI) and cost per thousand impressions (CPM) are terms used in traditional advertising media selection, as well as online advertising and marketing related to web traffic. They refer to the cost of traditional advertising or internet marketing or email advertising campaigns, where advertisers pay each time an ad is displayed. CPI is the cost or expense incurred for each potential customer who views the advertisement(s), while CPM refers to the cost or expense incurred for every thousand potential customers who view the advertisement(s). CPM is an initialism for cost per mille, with mille being Latin for thousand.

<span class="mw-page-title-main">Google Ads</span> Online advertising platform owned by Google

Google Ads is an online advertising platform developed by Google, where advertisers bid to display brief advertisements, service offerings, product listings, and videos to web users. It can place ads in the results of search engines like Google Search, mobile apps, videos, and on non-search websites. Services are offered under a pay-per-click (PPC) pricing model.

Click fraud is a type of fraud that occurs on the Internet in pay-per-click (PPC) online advertising. In this type of advertising, the owners of websites that post the ads are paid based on how many site visitors click on the ads. Fraud occurs when a person, automated script, computer program or an auto clicker imitates a legitimate user of a web browser, clicking on such an ad without having an actual interest in the target of the ad's link in order to increase revenue. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud.

Pay-per-click (PPC) is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher when the ad is clicked.

Cost per action (CPA), also sometimes misconstrued in marketing environments as cost per acquisition, is an online advertising measurement and pricing model referring to a specified action, for example, a sale, click, or form submit.

Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising which uses the Internet to promote products and services to audiences and platform users. Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising, and mobile advertising. Advertisements are increasingly being delivered via automated software systems operating across multiple websites, media services and platforms, known as programmatic advertising.

Cost per mille (CPM), also called cost per thousand (CPT), is a commonly-used measurement in advertising. It is the cost an advertiser pays for one thousand views or impressions of an advertisement. Radio, television, newspaper, magazine, out-of-home advertising, and online advertising can be purchased on the basis of exposing the ad to one thousand viewers or listeners. It is used in marketing as a benchmarking metric to calculate the relative cost of an advertising campaign or an ad message in a given medium.

Click-through rate (CTR) is the ratio of clicks on a specific link to the number of times a page, email, or advertisement is shown. It is commonly used to measure the success of an online advertising campaign for a particular website, as well as the effectiveness of email campaigns.

Pay-per-call is an advertising model which allows companies to advertise on TV and pay for each call generated from each TV commercial aired based on a performance model and agreed upon cost per call. The Pay Per Call model allows companies to avoid expensive cash media spends for TV and radio, in favor of only paying for qualified calls.

In Internet marketing, search advertising is a method of placing online advertisements on web pages that show results from search engine queries. Through the same search-engine advertising services, ads can also be placed on Web pages with other published content.

Cost per lead, often abbreviated as CPL, is an online advertising pricing model, where the advertiser pays for an explicit sign-up from a consumer interested in the advertiser's offer. It is also commonly called online lead generation.

Post-click marketing is emerging as a practice that aims at improving sales and marketing results by focusing on website visitors when they respond to online marketing activities such as pay per click advertising, HTML e-mails, and paid searches with the objective on increasing conversion rates.

Pay for performance advertising (P4P) is a term used in Internet marketing to define a pricing model whereby a marketing or advertising agency will receive a payment or bonus from an advertiser for 'performance'. This may be in the form of each new lead or new customer obtained for the advertiser through the agency's online marketing efforts or some other 'performance' metric the agency and client agree upon before beginning.

Website monetization is the process of converting existing traffic being sent to a particular website into revenue. The most popular ways of monetizing a website are by implementing pay per click (PPC) and cost per impression (CPI/CPM) advertising. Various ad networks facilitate a webmaster in placing advertisements on pages of the website to benefit from the traffic the site is experiencing.

<span class="mw-page-title-main">Targeted advertising</span> Form of advertising

Targeted advertising is a form of advertising, including online advertising, that is directed towards an audience with certain traits, based on the product or person the advertiser is promoting. These traits can either be demographic with a focus on race, economic status, sex, age, generation, level of education, income level, and employment, or psychographic focused on the consumer values, personality, attitude, opinion, lifestyle and interest. This focus can also entail behavioral variables, such as browser history, purchase history, and other recent online activities. The process of algorithm targeting eliminates waste.

Behavioral retargeting is a form of online targeted advertising by which online advertising is targeted to consumers based on their previous internet behaviour. Retargeting tags online users by including a pixel within the target webpage or email, which sets a cookie in the user's browser. Once the cookie is set, the advertiser is able to show ads to that user elsewhere on the internet via an ad exchange.

Performance-based advertising, also known as pay for performance advertising, is a form of advertising in which the purchaser pays only when there are measurable results. Performance-based advertising is becoming more common with the spread of electronic media, notably the Internet, where it is possible to measure user actions resulting from advertisement. Performance marketing is different from Brand Marketing which focuses on awareness, consideration and opinions among target consumers.

Affiliate Tracking Software is used to track the referral, endorsement or recommendation made by one person or company to buy products or services from another person or company. Tracking is necessary to manage and reward or compensate the participants of an affiliate marketing group of participants or affiliate networks.

The Performance Marketing Blue Book, owned by privately held mThink LLC, provides online affiliates and merchants with an independently researched ranking of affiliate networks worldwide. It is published in the form of two "Top 20" league tables, one for CPA networks and one for networks using a revenue sharing business model, cost-per-sale. The tables are updated each year from the results of an annual research-based process that includes a survey of over 20,000 online publishers and advertisers. The Blue Book has been produced each year since 2009 and is a recognized information resource within the performance marketing industry.

References

  1. ↑ Jim Taylor, et al. "Engaging Online Consumers with an Interactive Cost-Per-Action Advertising Model." Journal of Internet Commerce 8.3/4 (2009): 288-308. Academic Search Premier. EBSCO. Web. 21 Jan. 2011.
  2. 1 2 Prussakov, Gernott (2017-03-28). Affiliate Marketing Hunks. Smart eBook Shop.
  3. 1 2 Bird, Drayton (2007). Commonsense Direct & Digital Marketing, 5th Edition. London: Kogan Page Publishers. p. 171. ISBN   9780749447601.
  4. ↑ McCooey, Eileen. "Affiliate Nation." MediaWeek 10.15 (2000): 116. Academic Search Premier. EBSCO. Web. 21 Jan. 2011
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