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What is Affiliate Marketing?
Affiliate Marketing might be foreign to Web3. Let's see how it's done in Web2.
Affiliate marketing encompasses various models and strategies that enable individuals, known as affiliates or publishers, to earn commissions by promoting products or services on behalf of advertisers or merchants. These models offer flexibility and scalability for both affiliates and advertisers. Let's explore some of the different types of affiliate marketing, including Cost Per Action (CPA), which stands out prominently:
- 1.Cost Per Action (CPA): affiliates earn a commission when a specific action is completed by the referred user. This action can vary, such as making a purchase, submitting a form, downloading an app, or signing up for a free trial. The commission is based on the agreed-upon action and can range from a fixed fee to a percentage of the sale.
- 2.Cost Per Click (CPC): affiliates earn a commission based on the number of clicks generated from their referral links, regardless of whether a sale or conversion occurs. This model is often used in contexts where driving website traffic is the primary objective, such as with display advertising or contextual advertising platforms. In other words, the client pays when someone clicks on the ad.
- 3.Multi-Tier Affiliate Marketing: In this model, affiliates are incentivized not only to promote products or services but also to recruit other affiliates. They earn commissions not only from their own referrals but also from the referrals made by the affiliates they recruited. This model creates a multi-level affiliate network, allowing for exponential growth and rewards.
These are just a few examples of the various types of affiliate marketing models that exist. Each model has its unique benefits and can be tailored to suit the goals and preferences of affiliates and advertisers. The CPA model, in particular, has gained significant popularity due to its performance-based nature, providing advertisers with measurable and impactful results which are directly reflected on business metrics and affiliates with more predictable earning potential.