Compensation methods (
remuneration Remuneration is the pay or other financial compensationFinancial compensation refers to the act of providing a person with money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricature, the plentiful money bags handed to King Georg ...

), are
pricing Pricing is the Business process, process whereby a business sets the price at which it will sell its products and services, and may be part of the business's marketing plan. In setting prices, the business will take into account the price at whi ...

models and business models used for the different types of
Internet marketing The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a ''internetworking, network of networks'' that consist ...
, including
affiliate marketing Affiliate marketing is a type of performance-based marketing in which a business rewards one or more Affiliate (commerce), affiliates for each visitor or customer brought by the affiliate's own marketing efforts. Structure The industry has four ...
contextual advertising Contextual advertising is a form of targeted advertising Targeted advertising is a form of advertising Advertising is a marketing communication that employs an openly sponsored, non-personal message to promote or sell a product, service o ...
search engine marketing Search engine marketing (SEM) is a form of Internet marketing Digital marketing is the component of marketing that utilizes internet The Internet (Capitalization of Internet, or internet) is the global system of interconnected compu ...
(including vertical comparison shopping search engines and local search engines) and
display advertising Digital display advertising is graphic advertising Advertising is a marketing Marketing is the process of intentionally stimulating demand for and purchases of goods and services; potentially including selection of a target audience; ...

Predominant compensation methods in affiliate marketing

The following models are also referred to as performance based pricing/compensation model, because they only pay if a visitor performs an action that is desired by the advertisers or completes a purchase. Advertisers and publishers share the risk of a visitor that does not convert.

Pay-per-lead (PPL)/pay-per-action (PPA)

Cost-per-action or cost-per-acquisition (CPA),
cost per lead Cost per lead, often abbreviated as CPL, is an online advertising capital asset pricing model, pricing model, where the advertiser pays for an explicit sign-up from a consumer interested in the advertiser's offer. It is also commonly called ''onl ...
(CPL). Advertiser pays publisher a commission for every visitor referred by the publisher to the advertiser (web site) and performs a desired action, such as filling out a form, creating an account or signing up for a newsletter. This compensation model is very popular with online services from
internet service providers An Internet service provider (ISP) is an organization that provides a myriad of services for accessing, using, or participating in the Internet The Internet (or internet) is the global system of interconnected computer networks that ...
, cell phone providers, banks (
loans In finance Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money and investments. Savers and investors have money avai ...
mortgages A mortgage loan or simply mortgage () is a loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations etc. The recipient (i.e., the borrower) incurs a ...
credit cards #REDIRECT Credit card #REDIRECT Credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's promise to the card issuer to pay them for ...
) and
subscription services The subscription business model is a business model in which a customer must pay a recurring price at regular intervals for access to a Product (business), product. The model was pioneered by publishers of books and periodicals in the 17th century ...

Special CPA compensation models


= Similar to pay per click, pay per call is a business model for ad listings in search engines and directories that allows publishers to charge local advertisers on a per-call basis for each lead (call) they generate (CPA).
Advertiser Advertising is a marketing Marketing refers to activities a company A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal personality, legal ...

publisher Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for free. Traditionally, the term refers to the creation and distribution of printed works, such as book A ...
a commission for phone calls received from potential prospects as response to a specific publisher ad. The term "pay per call" is sometimes confused with
click-to-call Click-to-call, also known as click-to-talk, click-to-dial, click-to-chat and click-to-text, namely Webcall is a form of Web-based communication in which a person clicks an object (e.g., button, image or text) to request an immediate connection with ...
, the technology that enables the "pay-per-call" business model. Call-tracking technology allows creation of a bridge between online and offline advertising. Click-to-call is a service which lets users click a button or link and immediately speak with a customer service representative. The call can either be carried over VoIP, or the customer may request an immediate call back by entering their phone number. One significant benefit to click-to-call providers is that it allows companies to monitor when online visitors change from the website to a phone sales channel. Pay-per-call is not just restricted to local advertisers. Many pay-per-call search engines allows advertisers with a national presence to create ads with local telephone numbers. Pay-per-call advertising is still new and in its infancy, but according to the Kelsey Group, the pay-per-phone-call market is expected to reach US$3.7 billion by 2010.

=Pay-per-install (PPI)

= Advertiser pays publisher a commission for every install by a user of usually free applications bundled with
adware Adware, often called advertising-supported software by its developers, is software Software is a collection of instructions Instruction or instructions may refer to: Computing * Instruction, one operation of a processor within a computer ...
applications. Users are prompted first if they really want to download and install this software. Pay per install is included in the definition for pay per action (like cost-per-acquisition), but its relationship to how
adware Adware, often called advertising-supported software by its developers, is software Software is a collection of instructions Instruction or instructions may refer to: Computing * Instruction, one operation of a processor within a computer ...
is distributed made the use of this term versus pay per action more popular to distinguish it from other CPA offers that pay for software downloads. The term pay per install is being used beyond the download of adware.Google Results for "Pay-per-install"
showing usage of the term
Some botnets are known to operate PPI scams to generate money for their operators. Essentially, the compromised computer with the bot agent is instructed to install the software package from a registered PPI source via the bot's command and control system. The bot operator then receives payment from the PPI agency and, after a short period of time, uninstalls the software package and installs a new one.
Making MOney with your own Stealthy Botnet

Pricing models in search engine marketing

Pay-per-click (PPC)

Cost-per-click (CPC). Advertiser pays publisher a commission every time a visitor clicks on the advertiser's ad. It is irrelevant (for the
compensation Compensation may refer to: *Financial compensation *Compensation (chess), various advantages a player has in exchange for a disadvantage *Compensation (engineering) *Compensation (essay), ''Compensation'' (essay), by Ralph Waldo Emerson *Compensati ...

) how often an ad is displayed.
commission Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of another ...
is only due when the ad is clicked. See also
click fraud Click fraud is a type of fraud In , fraud is to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensati ...

Pay per action (PPA)

Cost-per-action (CPA). Search engines started to experiment with this compensation method in spring 2007.

Pricing models in display advertising

Pay-per-impression (PPI)

Cost-per-mil (or, per thousand) impressions. Publisher earns a commission for every 1,000 impressions (page views/displays) of text, banner image or
rich media Interactive media normally refers to products and services on digital computer-based systems which respond to the user's actions by presenting content such as text Text may refer to: Written word * Text (literary theory), any object that can ...

Pay per action (PPA) or cost per action (CPA)

Cost-per-action (CPA). Used by display advertising as pricing mode as early as 1998."Internet Advertising Revenue more than double in 1998", New York, NY - May 3, 1999, IAB - Interactive Advertising Bureau By mid-2007 the CPA/Performance pricing mode (50%) superseded the CPM pricing mode (45%) and became the dominant pricing mode for display advertising.Internet Advertising Revenues Continue to Soar, Reach Nearly $10 Billion in First Half of '07

Shared CPM

Shared Cost-per-mil (CPM) is a pricing model in which two or more advertisers share the same ad space for the duration of a single impression (or page view) in order to save CPM costs. Publishers offering a shared CPM pricing model generally offer a discount to compensate for the reduced exposure received by the advertisers that opt to share online ad space in this way. Inspired by the rotating billboards of outdoor advertising, the shared CPM pricing model can be implemented with either refresh scripts (
client-side JavaScript JavaScript (), often abbreviated as JS, is a programming language that conforms to the ECMAScript specification. JavaScript is High-level programming language, high-level, often Just-in-time compilation, just-in-time compiled, and Programming p ...
) or specialized rich media ad units. Publishers that opt to offer a shared CPM pricing model with their existing ad management platforms must employ additional tracking methods to ensure accurate impression counting and separate click-through tracking for each advertiser that opts to share a particular ad space with one or more other advertisers.

Compensation methods in contextual advertising

Pay-per-click (PPC)

See PPC/CPC in
Search engine marketing Search engine marketing (SEM) is a form of Internet marketing Digital marketing is the component of marketing that utilizes internet The Internet (Capitalization of Internet, or internet) is the global system of interconnected compu ...

Pay-per-impression (PPI)

see PPI/CPM in Display Advertising Google AdSense offers this compensation method for its "Advertise on this site" feature that allows advertisers to target specific publisher sites within the Google content network.

Compensation methods grid

There are different names used for the same type of compensation method and some compensation methods are actually special cases for another method. This grid shows alternative names for the individual compensation methods. The "cost per ..." name was used as default.


{{reflist Pricing