Whether you’re buying or selling traffic, one key question arises: What exactly should you buy or sell: clicks, leads, or get/pay a commission on sales? For many marketers, the answer is leads, with pay-per-lead being a popular performance and affiliate marketing model.
For affiliates, selling leads is easier than making commissions on sales and more profitable than selling clicks. For advertisers, buying leads is safer than buying clicks and sometimes even more cost-effective than paying commissions on sales, especially if they are good at lead nurturing and closing sales.
So it’s surely worth knowing pay-per-lead marketing through and through.
Book a demo to learn how Phonexa can grow your affiliate marketing business with granular lead tracking, routing, and analytics.
Pay-per-lead affiliate marketing is simple at its core: affiliates (also known as publishers) generate leads (contact and marketing information) for advertisers (also known as companies, businesses, merchants, or service providers) in exchange for a flat commission.
Pay-per-lead affiliate marketing example: An auto insurance company from New York runs an affiliate program to buy local policy seekers at $30 per lead. A lead is anyone in New York interested in purchasing an auto insurance policy. Upon form submission, qualified leads are paid, and disqualified leads are rejected.
But the devil is in the details, as you’ll soon find out.
In this article, I’m considering pay-per-lead in the context of affiliate marketing, but it goes far beyond affiliate marketing. For example, if you hire a lead generation agency, you’ll be tied by a B2B service contract, not an affiliate agreement.
Here are three things that define pay-per-lead as an affiliate marketing strategy:
Although affiliate marketing remains the main pay-per-lead domain, there are half a dozen cases where the pay-per-lead model extends beyond the scope of affiliate marketing. In fact, it includes any form of business relationship where an external party is paid per lead, and there’s no affiliate program or affiliate tracking links.
Here are some pay-per-lead marketing avenues other than affiliate marketing:
| Pay-Per-Lead Model | Transactional Mechanisms |
| Agency Performance Contracts | Custom service contract – for example, Master Services Agreement (MSA) + Service Level Agreement (SLA) – or flat fixed-rate contract |
| Lead Generation Companies & Brokers | Purchase order or terms of sale |
| Call Centers & Pay-Per-Call Providers | Campaign-based contract or insertion order (IO) |
| Media Buyers with Direct Deals | Private PPL agreement (informal or via IO) |
| Data Providers Selling Leads | Data sale agreement or lead licensing terms |
But it’s still much more convenient to review pay-per-lead in the context of affiliate marketing, simply because it’s so much bigger than everything else. So, I’m going to do just that – review pay-per-lead marketing as a business model where affiliates generate traffic for advertisers.
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Before a company can buy leads from affiliates directly or through an affiliate network, it needs to establish what type of leads are paid. So, first of all, an advertiser creates an affiliate program that explains all the pertinent details, from what constitutes a qualified lead to the payment size to all the minute details that affiliates and affiliate networks may need to know.
Optional: Advertisers join an affiliate network. Some advertisers prefer to run their pay-per-lead programs in-house to control the process and have direct relationships with affiliates. But running a pay-per-lead affiliate program on your own might be too limiting, especially for smaller advertisers, so many outsource it to an affiliate network.
Once the program is up, any affiliate that satisfies the program’s conditions can register, receive a unique affiliate link, and start generating leads.
Read Also: Do Affiliate Links Hurt SEO? Busting the Myth that Kills Your Money
Once someone submits a form or makes a call after clicking the affiliate’s unique tracking link, the advertiser evaluates whether this lead’s location, interest, age, etc., match the program’s conditions. If the lead meets the criteria, the affiliate receives an agreed-upon commission, typically ranging from $20 to $50 per qualified lead in high-ticket industries like insurance, home services, or solar.
Read also: Pay-Per-Call Affiliate Marketing 101
Optional: Affiliates and advertisers analyze their leads. Throughout the lead’s journey from discovery to conversion, or if the lead was rejected, there are plenty of marketable details affiliates and advertisers can collect and analyze. In-depth lead tracking and analytics distinguish successful marketers from mediocre ones.
Now that you know the basics, let’s take an affiliate’s perspective on pay-per-lead marketing.
The biggest mistake of beginner affiliates: chasing volume over quality. Of course, you’d like to sell enough leads to hit the payout threshold, but low-quality leads will not only be rejected but also get you blacklisted if you send them constantly.
Example: If the minimum payout threshold is $100, and you’ve generated 15 leads at $5 per lead, you haven’t hit the threshold and need five more leads to get paid. However, as I’ve mentioned, bridging the gap with low-quality leads might have the opposite effect. So, choosing a program with a lower payout requirement might be better than compromising traffic quality.
Read also: Top Tactics To Grow Your Affiliate Marketing Traffic
The same logic applies to PPL programs that require you to deliver a minimum number of leads to get paid or programs that pay more to affiliates who’ve brought more leads. For example, the first 50 leads per month may be paid at $5 per lead, and all subsequent leads may be paid at $6 per lead.
In short, the desire to meet performance targets shouldn’t compromise common sense or ethical standards, as this unsustainable strategy will backfire.
| “I always take a look and see what the competition looks like. For some of those areas, if you’re going to get into it, it can be quite competitive. There are a lot of big websites and a lot of leadgen things. But see what they’re doing and what you can do differently – what can you bring that somebody else isn’t doing right now, how you can approach a topic or a problem and bring in your expertise on it.” – Jeannine Crooks, Partner Acquisition & Development Manager of Awin |
Lead tracking is the number one strategy to maximize both lead quality and volume, so I’d suggest going as granular as technically possible. Use sub-IDs to track traffic sources, ad creatives, landing pages, locations, and keywords – this way, you’ll know what efforts drive quality leads and what traffic channels and types of leads underperform and why.
Important: As an affiliate, you’re naturally limited to your side of the funnel – you don’t know whether your leads convert or how they behave after being sold – so it’s important to work with advertisers or networks to get this data. Post-lead tracking can take your campaigns to the next level.
I recommend checking the affiliate network’s or advertiser’s terms of service for sub-ID guidelines and discussing your tracking setup and what performance insights they can provide for the leads you sell. You can create sub-IDs like campaign1_ad1 and track them internally (usually, no agreement needed) and also pass them to the advertiser or network for feedback.
Relying on a single pay-per-lead program and traffic source is highly risky. What are you going to do if the advertiser terminates the affiliate program or algorithms change? Diversifying risks is surely a high priority for any pay-per-lead affiliate marketer.
A good starting point would be to join 3 to 5 pay-per-lead affiliate marketing programs and allocate around 65% of your marketing budget to proven channels while using the rest to scale and experiment – an allocation that grants a balance between stability and growth.
| “As an affiliate, you’re helping your audience to find the right product while giving them the ability to sort through a lot of things they may not know much about. But, as an expert, you can help people see through the weeds to choose the best product for their needs. At the same time, providing more options creates more monetization opportunities for you.” – Talar Malakian, CMO at Phonexa |
Many aspiring affiliates are surprised that most advertisers and networks are open to negotiating higher payouts, faster payments, and other incentives. It’s quite true, but you have to support your request with data.
The gist is to show your advertiser that you both will be better off if they increase the commission size, implement tiered payouts, or make payouts more frequent. I would recommend bringing in “you vs. other PPL affiliates” statistics: how many leads you generate, how many of them convert, how much you’re willing to charge per lead compared to the average affiliate, and how much more your advertiser will earn by having you as their partner.
First, you need to check whether your advertiser accepts the types of leads and the traffic sources you’re using. For example, they may only accept leads from one or a few states, of a certain income level, or they might exclude, say, social media or SMS traffic.
Next, you must ensure your creative assets and claims comply with federal rules, state-level regulations, and the advertiser’s specific terms and conditions (if any). With software like ValidRecord, compliance is quite manageable.
One more thing: To stay safe, keep records of your leads, ad creatives, landing pages, and traffic sources. Then, if a merchant disputes your leads, you can defend your case. The good news is that ValidRecord stores detailed lead records, so you don’t need additional software.
Some of your leads will inevitably be rejected by the advertiser, even if you generate quality traffic otherwise, because of a mismatch, compliance violations, or low intent.
In this regard, you can do several things:
Book a demo to explore how Phonexa’s eight-in-one performance & affiliate marketing software suite can help you drive quality pay-per-lead traffic at scale.
Naturally, pay-per-lead advertisers aim to acquire as many purchase-ready leads as they need at the minimum possible price. This demands effort: demonstrating to affiliates that your program is the most competitive in your niche.
Read also: Affiliate Network vs. Your Own Affiliate Program: The Hard Choice
Here are a few things you should do as an advertiser to succeed with affiliate marketing:
While you know what leads you need, this may not be obvious to affiliates. Clearly define your ideal lead, including demographics, traffic sources, compliance, and other qualifying conditions. Try to find a proper balance.
On the one hand, you can’t be too restrictive unless the demand among affiliates is high. For example, requiring a credit score upfront for mortgage leads may scare off affiliates. On the other hand, you need to be precise enough to get the leads you can convert into sales.
For example, a mortgage affiliate offer might be, “Leads must be U.S. homeowners, age 30+, with a loan balance over $150,000, and explicit TCPA consent.” Likewise, you can incentivize quality traffic by tiering payouts into, say, basic submissions and leads with high intent.
The best thing you can do is provide anonymized practical examples of your ideal high-converting leads, the rejected leads, and the reason for rejection.
First, make sure to enroll only meaningful publishers in your pay-per-lead program. Accepting everyone might be a good strategy to kick things off, but you have to start screening affiliates rigorously once you’ve gained some momentum so you can get quality leads.
Read also: Why Do Companies Buy Cheap Leads?
Here’s what you should vet on top of basic screening:
Not all pay-per-lead affiliates perform equally, and top performers often seek higher payouts. So, it might make sense to categorize your affiliates into several tiers based on the quality of their traffic. For example, Tier 1 affiliates: >20% lead-to-sale; Tier 2: >10% lead-to-sale; and Tier 3: <10% lead-to-sale.
Advertisers usually have access to more insights into the affiliate’s side of the lead journey than affiliates have into the advertiser’s side of it. So, tracking and scoring leads shouldn’t be a problem: first, some insights can be inferred from lead metadata; second, your lead qualification criteria also dictate some insights; third, you can ask affiliates to share the missing data.
Here’s how you can uncover lead data with Phonexa:
Having an all-encompassing affiliate marketing ecosystem like Phonexa allows you to get insights that would be missed with any other standalone solution. The most nuanced details are only uncovered when various data sets are tracked in real-time and analyzed against each other and historical performance, which is exactly what Phonexa’s eight-in-one software suite does.
Take a product tour to experience the synergy of Phonexa’s eight affiliate marketing solutions.
It’s one thing to acquire leads and another to acquire leads that convert into profits. What I’m saying is that sifting out low-quality, irrelevant, and downright fraudulent leads is your top priority for staying cost-effective and maintaining healthy relationships with affiliates.
To assess your fraud prevention skills, consider taking our quiz.
When it comes to fraud protection, I don’t know a solution better than iClear, a piece of software that can verify IDs, authenticate emails, score IP risk, and do many other things in real-time to ensure you only accept leads that match your qualification criteria.
Here’s what you can do with iClear (to be more precise, what it automatically does for you):
With iClear, you’re 100% safe and confident in the traffic you buy. The rest is up to sales.
Book a demo to learn how iClear can protect you from affiliate fraud.
As I’ve mentioned, your sales funnel might not be intuitive to affiliates, so it would help if you provided them with lead generation forms, banners, landing pages, and other branded assets tailored to the types of customers you’re looking for. For bigger affiliates, you can co-create assets specifically for their audience – for example, a quiz funnel to get pre-qualified leads.
Likewise, providing free lead tracking software and sharing customer journey insights will make your affiliate program more attractive. You don’t have to share sensitive information – just limit affiliate access to what you think is reasonable via software settings, and you’ll likely get more leads of higher quality soon.
The depth of lead insights is critical for both affiliates and advertisers that run pay-per-lead campaigns, so I suggest you take care of your part of the sales funnel by tracking and analyzing it thoroughly. At the end of the day, whether you are an affiliate or an advertiser, you can only become more cost-effective if you know your leads well.
This is where Phonexa shines – an eight-in-one performance and affiliate marketing suite that streamlines your campaigns, automating lead acquisition so you can focus on the most valuable leads.
| “I think more companies will tap into the affiliate industry and also explore the ways to stop relying on third-party data suppliers and sources by bringing it all under one roof, so they can analyze the right things and then make the right decisions. A big change is that more of the industry is becoming real-time, so we’re making sure we bring everything into a real-time space where you can roll with the punches and adapt and optimize things on the fly.” – David Pickard, CEO at Phonexa |
With Phonexa, you’re effectively turning every marketer’s biggest struggle – the need to juggle reports and systems – into your biggest competitive advantage, with full visibility into all your campaigns from a single dashboard. All data is consolidated into a single, unified dashboard.
Here are the eight proprietary solutions you get at a single price (online price calculator):
| LMS Sync | Lead tracking & distribution software |
| Call Logic | Call tracking & distribution software |
| E-Delivery | Email & SMS marketing software |
| Cloud PBX | Cloud phone system |
| Lynx | Click tracking software |
| Opt-Intel | Suppression list management software |
| HitMetrix | User behavior recording & analytics software |
| Books360 | Automated accounting software |
Build your plan now, or book a demo to learn more about Phonexa.
Pay-per-lead is a type of affiliate marketing where affiliates (also known as publishers) sell leads to advertisers in exchange for a flat commission per lead, with an affiliate network usually acting as the middleman that connects both parties and ensures beneficial cooperation conditions.
Alternatively, advertisers can run a pay-per-lead program independently, but this only makes sense for bigger companies that naturally attract affiliates and have resources to manage the program, including affiliate tracking, payouts, lead qualification, and marketing analytics.
Pay-per-lead works as follows: affiliates sign up with an affiliate network, select the affiliate program they’re willing to participate in, receive their unique tracking links, and generate leads that go through these links and therefore can be attributed to the affiliate.
For every lead meeting the advertiser’s criteria – such as target location, interest, and valid contact details – the affiliate receives an agreed-upon commission, typically ranging from a few cents to over $100.
A pay-per-lead affiliate program is a set of rules that establish what qualifies as a paid lead; in other words, what customers the advertiser pays for and what customers don’t result in a payout. Lead qualification criteria include location, traffic source, income level, gender, and other parameters. Pay-per-lead affiliate programs are created by advertisers that either run them on their own or submit them to affiliate networks to gain access to more affiliates. Explore our curated list of 12 best pay-per-lead affiliate marketing programs.
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