What is the difference between pay-per-sale (PPS) and pay-per-lead (PPL) affiliate models?

The pay-per-sale (PPS) and pay-per-lead (PPL) affiliate marketing models differ primarily in the type of action for which affiliates are compensated and the corresponding commission structure. Here's a comparison of the two models:

1. **Pay-Per-Sale (PPS)**:

   - **Definition**: In the PPS model, affiliates earn commissions based on the sales they generate for the advertiser. Affiliates are only compensated when a referred customer makes a purchase or completes a transaction on the advertiser's website.
   
   - **Commission Structure**: Affiliates receive a percentage of the sale amount or a fixed commission for each sale generated through their affiliate links. The commission rate may vary depending on factors such as the type of product or service being promoted, the advertiser's profit margins, and the competitiveness of the market.
   
   - **Example**: An affiliate promoting a clothing retailer's products earns a 10% commission on each sale generated through their affiliate link. If a customer purchases $100 worth of clothing, the affiliate earns $10 in commission.

2. **Pay-Per-Lead (PPL)**:

   - **Definition**: In the PPL model, affiliates earn commissions based on the leads or referrals they generate for the advertiser, regardless of whether those leads result in sales. A lead typically involves a specific action, such as signing up for a trial, completing a form, or downloading a whitepaper.
   
   - **Commission Structure**: Affiliates receive a commission for each qualified lead they generate, as determined by the advertiser. The commission may be a fixed amount per lead or a variable amount based on factors such as lead quality, geographic location, or desired action.
   
   - **Example**: An affiliate promoting a financial services company's credit card offer earns a $5 commission for each qualified lead who completes a credit card application form, regardless of whether the application is approved or results in a credit card activation.

Key Differences:

- **Action**: In the PPS model, affiliates are compensated for driving sales, while in the PPL model, affiliates are compensated for generating leads or referrals.
 
- **Conversion Requirement**: PPS affiliates only earn commissions when a sale occurs, whereas PPL affiliates earn commissions for generating leads, regardless of whether those leads result in sales.
 
- **Commission Structure**: PPS commissions are typically based on a percentage of the sale amount or a fixed commission per sale, while PPL commissions may be based on a fixed amount per lead or a variable amount based on lead quality or specific criteria.

Overall, the choice between the PPS and PPL models depends on factors such as the advertiser's goals, the nature of the products or services being promoted, and the preferences of both advertisers and affiliates.