Affiliate Advertising

Besides the other things that affiliates do to promote products—which may include blogs, reviews, tweets, etc.—affiliates often provide advertising on their site as one means to encourage their visitors to click through to the company or companies with which they are affiliated. There are various types of advertising that affiliates may provide for the programs they are connected with. The affiliate advertising types can be classified by the type of ad that is presented to the viewer or by how the affiliate is paid through the affiliate program.

Analyzing using the first type of classification of affiliate advertising, we find:

• Pay-Per-Click (PPC) Ads—Although many viewers of the affiliates' site see these ads, the affiliate is only paid when a visitor clicks on the ad, Programs that provide PPC advertisements are Google AdWords, Microsoft adCenter, and Yahoo! Search Marketing, among others. Because nothing more than a click is required, there is a danger of what is called click fraud, in which the advertising link is clicked with no intention of making a purchase, but simply to rack up clicks for the affiliate. When this type of abuse was uncovered, automated systems were put in place to try to avoid it.

• Pay-Per-Lead (PPL) Ads—Unlike Pay-Per-Click, Pay-Per-Lead, requires the visitor who has clicked on the link to do something more in order for the affiliate to earn a payment. The word "lead" means that the company is provided with information that may lead to a connection, and often it means that the visitor after clicking signs up for emails, newsletters, or some other further communications from the company whose ad was clicked.

• Pay-Per-Sale (PPS) Ads—In this case, the visitor to the affiliate site has to get all the way to the checkout and complete a transaction before the affiliate gets paid. In some cases, the affiliate may be given credit even if the sale does not happen in the same session in which the visitor first arrives at the company's site from the affiliates site. For example, if the visitor clicks through, finds a product, leaves the site, but returns to purchase it several hours later, the affiliate may still be credited with the sale.

Classifying affiliate advertising by the characteristics of the advertisement itself, we find, for example:

• Banner Ads—Banner ads include an image with text or a multimedia object, several times wider than it is tall, and programmed to be clickable and take the clicker to an appropriate page on the website of the company for which the affiliate advertises. Because this type of ad is relatively large and obtrusive, interfering with the site-owner's own content. Some people dislike banner ads enough to use a browser add-on or plug-in to block them. Affiliates may, as a result, have visitors on their site who aren't seeing the banner ads.

• Pop-Up Ads—These ads open in separate browser window. Like banner ads, people may find them interruptive and go out of their way to avoid them.

• Text Ads—Text ads do not include any media content, only words. They are less noticeable than banner ads, but because they are not as obtrusive, people may not be so tempted to avoid them.

• Rich Media Ads—Interactive ads that may employ user choice, for example, offering three ads, and a method for the user to choose one.

• Premium Rich Media (PRM)—uses complex technology to provide advertising that is meant to be interactive and engaging, including the use of 3D and widgets.