Is
Pay-per-Lead Taking Over?
Over
the last 6 months we have seen an increasing number of pay-per-lead
programs vying for the attention of webmasters. The advantage
that a pay-per-lead program offers is that visitors to your web
site do not need to make any type of purchase for you to be able
to earn a commission. As prevalent as e-commerce is becoming today,
and even though a large portion of the Internet populace is now
comfortable with shopping online, it is still, and will probably
always be, easier to give something away then to sell something.
Pay-per-lead programs are generally designed to promote some type
of free service or product. An example would be Z Media's free
email newsletter subscriptions or CallWave's free software download
that allows users to monitor incoming calls while they are online.
Since the merchant is mainly looking for a way to widely distribute
their product or service, they are willing to pay you for each
user, subscriber or member you attract. Generally these payments
range from $0.05 to $20 for each 'action' taken by one of your
referred visitors.
Since no purchase is required by your visitors, you can expect
significantly higher conversion ratios (i.e. the number of visitors
you refer that go on to earn you a commission). Although pay-per-lead
programs generally pay lower commissions than pay-per-sale programs,
the higher conversion ratios will often translate into higher
overall profits for you.
Let's take a look at a simple example, using some real data, but
with program names changed to protect the innocent (and the guilty).
Program A is pay-per-lead and pays $1 for each new user you refer
to their free, downloadable software. Program B is pay-per-sale
and pays about a $5 commission for a similar software product
that costs $25.
An affiliate decides to promote both to see which results in higher
overall commissions. After two months of testing, the affiliate
referred 271 new users to Program A, earning him $271. He also
referred 24 new users to Program B, earning him $120. The affiliate
decided to stay with program A for obvious reasons.
Although this example is not indicative of all pay-per-lead versus
pay-per-sale comparisons, it does illustrate the fact that you
can often earn more even if the program pays lower overall commissions.
It also illustrates how pay-per-lead programs generally have much
higher conversion ratios than pay-per-sale. In this case, the
affiliate referred 11.3 new users to Program A for every sale
he referred to Program B.
Pay-per-lead also lends itself to a wide variety of marketing
strategies. Since you are offering your visitors or subscribers
something they can receive for free, you can easily position ads
for pay-per-lead offers as a valuable service to them. When done
properly, you are adding value to your web site at the same time
you are adding a revenue stream.
If you are interested in adding pay-per-lead programs to your
web site or email newsletter (an excellent marketing avenue for
them), be sure to check out the reviews
of pay-per-lead programs.
Also, I highly recommend the Commission
Junction program which offers an increasing number of pay-per-lead
programs.
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