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Banners or Text Links
The oldest affiliate model is the banner or text link. Affiliates place a small banner, image, or text link on their site, which when clicked sends the site visitor to the merchant's site. For example, a site might include a banner for Amazon.com, with some promotional copy on the banner to get the web site visitor to click it. When the user clicks the banner, it sends her to the Amazon.com site, where she might buy a book. If the visitor buys a book, the affiliate site gets a commission.
Banners can also be used to promote services. Some financial institutions promote their various credit cards using affiliate marketing. NextCard is a good example. Affiliate web sites place a banner persuading visitors to apply for a NextCard Visa card at a very low percentage rate. When the user clicks the banner, it sends him to the NextCard site, where he can fill out an application. If the user is approved for a Visa card, the affiliate site gets a finder's fee.
Studies have shown that combining a banner with a text description—especially a testimonial—produces better results than a banner or text link alone. This gives the viewer not only a graphic image but also a compelling reason to click it.
Other revenue models use banners but don't depend on commissions. Instead of paying a commission on products or services sold, you can offer affiliates a cost-per-click (CPC) program. In this method, web sites earn revenue every time one of their visitors clicks through to your web site. This method is especially useful for driving traffic to your site. Another model is cost-per-action (CPA). With CPA programs, affiliates earn a commission every time one of their visitors clicks through to your site and performs a task, such as filling out a survey form or entering a contest on your site. A sale may not be made, but your company can build up a list of prospects that you can market to in the future. Examples of such pay-per-lead networks include WebSponsors and DirectLeads.
The advantage to you with these programs is increased traffic to your site. The disadvantage to your affiliate is the loss of that same traffic. These types of "click-and-bye" links are frowned upon by some affiliates because there is no opportunity for residual commissions and there are no financial transactions. However, the CPC is guaranteed commission, and CPA deals typically convert at a much higher rate than the sales models. This makes the CPC and CPA models very attractive to many affiliates.