Which service is the better to promote?

By Buniei R. Ahn
Posted Sunday, November 14, 2004

The pay-per-click method is simple and straightforward. Place an ad to show on Google or some other pay-per-click search engine. Customers click on it. It brings them to a page where they can make the purchase.

Pay-per-click advertising is a quick, powerful, effective way to market products for affiliate programs. New advertisers to the medium are often stunned at how quick and effective it is.
but sometimes those of us who use the pay-per-click market get into the same mindset and overlook perfectly profitable products simply because they don’t pay out as much right away

I’m talking about the power of residual income, and any time you find an affiliate program that pays ‘residually’ or mentions the words ‘lifetime customer’, you should take notice.

Here’s an example. Suppose you find two web-service providers, each of which has an affiliate program. #1 offers an immediate payout of 60% per sale to you for anyone who buys their service. Sounds pretty good; it’s a high payout and you think you can get a good conversion rate on any ads you run for their services.

#2, on the other hand, pays out only $10 per sale, but offers $10 per month residually for the lifetime of the customer.

Oftentimes, those of us who play the pay-per-click game get so in the mindset of ‘quick money’ that we tend to dismiss those affiliate programs that have lower payouts without really considering what may be offered.

Which of the two web services has the better payout overall? We know that web host #1 pays out 60% per sale. That's quick money, a lot of the time it’s easy to think.

But suppose a customer buys web services from company #2. Presumably, if he is pleased with the service, he’ll stay with it for a very long time, possibly the rest of his life. So even though the initial payout is only $10, the potential return of this one sale is $10 per month, for the rest of the customer’s life! I think that kind of payout deserves a second look.

So which service is the better to promote? The answer, of course, is both of them. Depending on how well each service converts to sales, and what the click-through rate is on your ads, either or both of the above services could be wrong for you to promote. But either or both could be very profitable.

Don’t dismiss low-paying payouts out of hand, especially if there is residual income involved.

Warm regards

Buniei R.Ahn
brubenahn@rogers.com

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