Pay-per-Click programs offer a variety of advantages and disadvantages compared to affiliate programs. The advantage pay-per-click programs have are that they are generally easier to set up and maintain, and that they pay commissions even if your visitors never make any purchases.
Another key advantage of pay-per-click programs are that they are generally targeted towards a very general audience. Affiliate programs are best promoted by specifically targeting what is sold to your visitor's interests. This may make pay-per-click programs a better choice if it is difficult to determine what products or services your visitors might be interested in.
Pay-per-click programs also have disadvantages. Because of their general nature, they might not be the best choice if your site has a narrow focus and a targeted audience. Pay-per-click programs also generally pay less than affiliate programs since you are trading higher commission rates for a higher probability of earning income (since your visitors need only click, rather than purchase).
Additionally, pay-per-click programs also have the tendency to be more likely to balk on paying their affiliates or to cancel an affiliate site's membership just as payment is due (sometimes justly, sometimes not). A final disadvantage is that pay-per-click programs can't generally be promoted in email newsletters, making them unsuitable if you have developed a mailing list which relies on affiliate program income.
However, for many sites, being paid for every click, rather than waiting for a sale or two to trickle in, is an appealing advantage. If you do decide to add pay-per-click programs on your web site, there are several main factors to evaluate before signing up and adding banners to your site:
1) How do they count click-throughs?
2) What do they pay and what is their payment history?
3) What are their payment terms?
4) What are their terms and conditions of staying a member in good standing?
5) What other tools or features do they give you?
6) What is the quality of their advertisers?1) How do they count click-throughs?
This is an often overlooked factor of pay-per-click programs, since it is usually not highlighted and often is only mentioned in the fine print of the program's operating agreement. Most programs are set up to pay you one time for each unique IP address that generates a click in a 24 hour (or longer) period.
The reasoning behind this is simple: it prevents the program from being cheated by an unscrupulous affiliate that makes it their full time job to click over and over again on their own banners.
However, this method of preventive action also poses a threat to your ability to earn a fair income. Since many ISPs, especially larger ones, assign IP addresses dynamically, it is entirely possible that a large number of clicks would not be counted since they are coming from different people, but using the same ISP, and therefore the same IP address. Also, clicks from the same person, in a 24 hour period, even if they came during different visits to your site, would not be counted.
There are programs that have lower restrictions than once every 24 hours, but you need to be wary of many of these program also. Some programs with these 'loose' guidelines have gotten in over their head as far as their ability to pay affiliates, and are generally more likely to cancel your account since they have lower tolerances for cheating.
In the end, this is a factor to be aware of, to know what their guidelines are before joining so you can know what to expect. There is no definitive answer as to what time period is best for counting clicks. However, programs that have very high restrictions (48 hours or more) should generally be avoided.2) What do they pay and what is their payment history?
What a particular vendor or network pays is perhaps the most obvious factor for judging a pay-per-click program. This is simply what can you make per click you refer from the program. Pay-per-click programs range from paying $0.01 to $0.20 or more per click. However, many webmasters sign up for pay-per-click programs without researching whether or not the program has a solid history of paying their affiliates.
A general rule of thumb is to avoid programs that offer what seem to be too large of a payout to webmasters. For example, many webmasters have been encouraged to join the CyberThrill casino program since it promises high payouts of $0.20 per click. However, the catch is they NEVER pay their affiliates what they are truly owed. Many webmasters referred hundreds or thousands of dollars of clicks, and never saw more than a few dollars in a 'token' payment.
I won't spend to much more time on this subject since this is the easiest part of a program to evaluate. Just be aware that the programs that offer to pay the highest are not always the best. If they offer $0.20 per click but never pay you, you would have been much better off accepting $0.10 or $0.15 from a trusted network.
Also, avoid programs that pay under $0.05 per click, since they are generally not worth your time given the number of clicks you need to refer to make a decent income from your site.
To help you find the programs that have the best reputations for paying their affiliates, I make this one of my top criteria for determining how pay-per-click programs are rated. Some of the most consistent programs include ValueClick, Advertising.com, and Burst!.3) What are their payment terms?
This is another factor that is often overlooked by webmasters. Many programs have strict criteria on when they make payment to their affiliates for click-throughs. Be aware of the minimum amount you must accumulate in commissions before they will mail a check to you.
Generally, a pay-per-click program should send checks when between $25 to $50 in commissions have been accumulated. Less than that is preferable of course, but be on the look-out for programs that require higher conditions to be met, or which combine high minimum with low per-click payouts.
For example, the ValueClick pay-per-click program generally pays $0.12 per click and pays you once you have accumulated $30. This means you need to send them 250 clicks before you receive payment. However, another program, yellowpages.net, requires $50 to be accumulated, and generally pays only $0.02 per click. Here, you would need to send 2500 clicks to them before you earned that first check, exactly 10 times more!4) What are their terms and conditions of staying a member in good standing?
A common practice on pay-per-click program operating agreements is a statement that the program has the right to cancel a web site's membership at any time, without notice, if they suspect an affiliate of cheating. This is legally in their right, as this practice protects their advertisers AND legitimate affiliate web sites from cheaters. However, it is important that you know what guidelines they have set up, and how not to lose your membership if you are only using their program legitimately.
Many programs have clauses to protect themselves capping payments at a 3 or 4% click-through. This means if your site were to generate click-through rates higher than this, you would not receive payment for anything over their set percentage. Unfortunately, this also often means that they will open an investigation into why your account is generating such a high response. This is actually somewhat hypocritical of pay-per-click programs, since they penalize you for success. However, there are good reasons behind these guidelines.
The industry average for non-targeted banner ad click-throughs is generally considered to be about 1% (and falling). So, to reach these limits, you would need to refer 3-4 times the industry average. Given that most pay-per-click networks host untargeted, general audience banners, this would be statistically abnormal.
The key here is that almost all programs have these types of limits, and some might use them to cancel your account if they expect abuse. The best solution is to be aware of their limits, and keep an eye on your account. Being aware of their terms, even if they do not always seem fair, is the best way to make sure you remain a member in good standing, are paid for what you are owed.
As a general rule of thumb, the programs with the best payment histories are often the least likely to use these types of guidelines as a reason to cancel their members. Those with the worst payment histories do so quite frequently. For example, CyberThrill routinely used this method to cancel nearly ever affiliate that was owed a substantial sum of money.5) What other tools or features do they give you?
An additional factor of evaluating pay-per-click programs is to determine what other tools or features they offer you to assist in generating the most income from your site. Some programs give you online tools to easily manage your account and to allow you to easily determine which ads you would like to host, and which you would like to block. ValueClick is a good example of this, giving you the ability to select which ads are inappropriate for your site.
Other features include giving you the ability to earn additional income by referring new webmasters to the program. For certain types of sites, this can be an excellent additional source of income, however most sites will not see a high enough volume of referrals to make much of an impact. ValueClick, TeknoSurf, and eAds all have excellent two-tier referral programs if your site targets other webmasters.6) What is the quality of their advertisers?
Another factor is the quality of the ads that the program runs. If a network hosts many professional ads from proven web companies, you will be more likely to see higher click-throughs than one that hosts poorly designed ads from unknown companies.
However, be aware that many ads hosted by pay-per-click programs are designed to generate brand awareness, rather than to generate click-throughs. Some ads are purposely designed to NOT generate click-throughs, but to rather improve a company's brand name or image, or to drive their URL into the person's mind, in hopes they visit at a later date.Summary
In summary, selecting a proven pay-per-click program that pays consistently and is fair to members can (unfortunately) be a difficult task. Working with programs that have proven histories of paying their affiliate sites is perhaps the most important consideration. I fully recommend checking with other sites that are hosts to see if they have been paid, and to check the ClickQuick site for frequent updates.
If you have feedback to share, good or bad, about pay-per-click programs you have experience with, please send it my way. And, look for the next article to focus on tips and strategies for making pay-per-click programs more profitable for your site.