What is Pay Per Sale?
Pay Per Sale (PPS) is an online advertising payment model in which payment is based exclusively on qualified sales. This payment method used in online marketing – payment per sale – is a remuneration model in which commissions are paid as soon as a visitor has generated sales. Other payment methods include pay-per-lead or pay-per-click
- Costs only arise when the customer makes a purchase
- One of the preferred payment methods in affiliate marketing
- Advertising measures must be carried out in a target-group-specific manner
How the pay-per-sale procedure works
In a pay-per-sale contract, payment is only made for sales generated by the target website based on an agreed commission rate. In contrast to alternative billing models there are no costs for generated views or clicks of the users, but only when the visitor buys something from the advertiser. For this purpose, the first step is to place an advertising measure, e.g. an advertising banner or the placement of a link, which is intended to draw the potential buyers attention to the advertised goods. But blog articles or comparison sites can also serve as a good starting point. In most cases, the billing is determined proportionately on the basis of the sales generated. But there are also models where there are fixed commissions for each sale. Pay-per-sale is one of the preferred billing methods in affiliate marketing. A prime example of pay-per-sale is Amazon, where advertising partners are paid when an item is purchased via their sites. For this purpose, users are redirected from a website via one or more (affiliate) links to the Amazon product page, where they are able to order the desired product immediately. With the help of its partner program, Amazon offers website operators the opportunity to generate good sales through pay-per-sale. The decisive factor is therefore always whether a purchase is actually made. This means that visitors to the publishers site not only have to click on the advertising material (link, banner, ad, etc.) of the respective merchant, but also make a purchase there. In contrast to the pay-per-lead or pay-per-click methods, there is usually no fixed commission for pay-per-sale, but the website operator receives a percentage of the purchase price. Usually, online shops in particular prefer to work with PPS programs.
Advantages and disadvantages of Pay-per-Sale
Pay-per-sale thus belongs to the forms of sales-oriented advertising. Payment per sale is often seen as the payment model that is most favourable for advertisers and least favourable for publishers. In such an arrangement, the publisher must not only worry about the quality and quantity of his audience, but also about the quality of his creations and the quality of the advertisers target site. Where possible, many publishers therefore avoid sales-based agreements and prefer to stick to other models. For advertisers, pay per sale has some unique advantages over pay per click and pay per lead. There is less concern about whether conversions are legitimate and whether traffic is incentive-based or of low quality. Pay per sale or cost per sale marketing is nevertheless a widely used online marketing pricing system or arrangement whereby the company only pays for the sales generated by the advertiser or marketing company. With this model, both the advertiser and the company are usually perfectly aligned with their goals. The specifications are so different for each advertising provider, that it is always necessary to read the terms and conditions and then decide who is suitable as an advertising partner. The targeted insertion of advertising banners on websites – already with a medium visitor frequency – can often lead to the desired successes faster than expected. When a company starts its affiliate marketing, it is important to decide how it will pay its “agents”. After all, there are many reward programs, such as pay-per-sale, pay-per-lead or pay-per-click. It is always individual and a small challenge to find out which one is most beneficial for the company