Pay per sale occurs when publishers receive commissions for sales generated from the online ads on their platform. Digital advertisers work with publishers/website owners, negotiating commissions to be paid for each complete sale.
Sales can occur via other channels like PPC (pay per click), PPV (pay per view), and CPA (cost per action). Hence, it’s essential to effectively track purchases made from pay per sale advertising. Cookies and link identifiers are some common tracking options.
How to Calculate Pay Per Sale
The pay per sale determines the cost for a single sale. It’s the total cost of an ad campaign divided by the total sales generated. PPS = total cost/total sales Let’s consider a short example applying the PPS formula:
An ad manager closes 200 sales deals from display ads on a web page. If the total cost for these sales is $4,000, then the PPS = $4,000/200 = $20.
Ad managers running PPS campaigns need to track sales and establish an ad budget. PPS enables them to monitor their campaign performance and fit its cost to their ad budget. Here are some factors to consider for an in-depth understanding of how PPS works:
A commission is a sales personnel's monetary compensation for closing a sales deal. Its value depends on the number of orders placed and the type of product/service being offered for sales. For example, promoting luxury goods and premium services attracts expensive fees compared to its humble counterparts.
Quality customer service is critical to user retention. Customer Service refers to assistance offered to the customer both before and after the product is purchased. Pre sale service includes telemarketing (explained later), interacting with qualified leads, and converting them into customers. Some examples of after-sales service include product installation, repair, and upgrade.
Maintaining a website has recurring costs. Publishers should consider this (along with the initial web development cost). This would assist them in determining profitable commissions for PPS.
Lead-customer conversion is the process of turning qualified leads into loyal customers. It involves inputs like average time to conversion and ad cost (this includes commission and cost for buildd-ing an ad).
Four Tools to Run Successful Pay Per Sale Campaigns
Pay per sale marketing is often challenging for publishers as they need to convert leads into paying customers. On the flip side, advertisers may experience difficulties monitoring sales from ads.
Here are four important tools to boost PPS efficiency:
Search engine optimization is a popular digital marketing approach for attracting high-quality leads. It’s cost-effective and delivers incredible results when applied consistently.
Some SEO tips to boost sales involve developing user-centric content and keyword research. SEO improves site visibility on SERP, which helps a website’s visitors. Converting these leads or prospective leads to the next point.
Leads frequently bounce off sites, read blog posts halfway, or don’t click Call-to-action ( A CTA is a prompt that drives a visitor to take a desired action).
Conversion rate optimization eliminates these sales barriers, increasing web or mobile app conversions. Some CRO techniques to increase sales include social proof and A/B testing for landing pages.
Monitoring the PPS ad conversion rate helps identify ineffective parts of ad campaigns. These parts can be optimized to maximize returns.
An affiliate network consists of an intermediary, brands, and publishers. The intermediary (middleman) connects the publishers to brands. And the affiliate network is a go-to avenue for running different ad models. It serves as a third party, ensuring publishers and ad managers stick to established agreements.
It could be taxing to join affiliate networks due to their strict regulations. Regardless, they usher a trustworthy environment for advertisement. Entrepreneurs may buildd a private affiliate network instead of joining existing ones.
PPS is dominant online but often involves offline activities. Companies may close deals via inbound calls inspired via online ads. Telemarketing supports human-centric customer engagement, enabling consumers to contact customer reps directly.
Marketers also implement cookies to track leads from website ads. The ads contain keywords that have a potential to pique the user's curiosity. Marketers track the performance of different keywords and the number of inbound calls they generate. Furthermore, they focus on keywords with a high conversion rate for more inbound calls and sales.
Benefits of Pay Per Sale Advertising
Below is a list of PPS benefits for advertisers and publishers.
Ad fraud results in huge losses, snatching about $65 billion in 2021. For instance, click bots inflate CTR while advertisers pay for fake clicks. Pay per sale helps mitigate this risk. The pay per sale model charges a fee only once a sale occurs. It focuses on sales, a valuable KPI(Key Performace Indicator), and conversion metric. This delivers a high return on ad investment.
Simple to apply
The pay per sale ad model has a simple application process. It involves a contract between publishers and advertisers.
This helps them agree on the commission per sale, the campaign duration, and ad volume. The advertiser supplies creative ads that are deployed on the publisher’s platform.
Improves performance measurement via tracking
Pay per sale allows for effective performance tracking and can be calculated by the PPS formula.
Additionally, PPS is a continuous process that assists businesses in identifying impactful business strategies. This helps increase sales revenue and lower marketing cost.
No Start Up Cost
Affiliate publishers or website owners receive a fixed fee from the PPS model. To get paid, they need to close sales deals via ads displayed on their platform. It requires no startup cost.
Affiliate marketers can join free affiliate network programs, connecting them to advertisers or retailers. They may increase commission-based earnings by creating sales for multiple advertisers.
Suitable for small businesses
There are two ways for small businesses to join and profit from the PPS model. They may connect with local advertisers within their niche for promotions. For instance, it would be effective for restaurants to upload their ads on a food blog.
The second channel is affiliate networking. Large corporations like Amazon have extensive affiliate network programs. These rewards publishers when a purchase occurs via Amazon affiliate links on their platform.
Pay Per Sale Marketing Best Practices
With industry best practices, advertisers and digital publishers can collaborate to reach pay per sale marketing targets. This includes:
Tap into search traffic
Data shows Google processes over 7 billion search queries daily. This is a massive opportunity to leverage search engine traffic, capture web visitors, and buildd a robust lead list. Search engine traffic occurs on different devices, including desktop computers and mobile.
Hence, designing PPS ads that naturally fit with said devices' browsing experience is vital. Furthermore, implementing SEO techniques like keyword research improves website ranking on SERP. This increases website search traffic.
Optimize lead generation
Lead generation buildds brand interest in target users, attracting them to a business. It’s essential for reaching marketing goals as businesses can’t convert customers without generating leads.
Some effective lead acquisition channels are content, email, social media, and blogs. Optimize them by inserting CTAs that link to a branded landing page. This is an opportunity to create special offers to a target audience or gather information about them.
Optimize conversion rate
The main goal of pay per sale marketing is conversion (i.e. turning leads/prospects into customers). Improving the pay per sale conversion rate increases sales revenue. To do this, you need to identify areas of friction in the pay per sale marketing campaign.
This often involves poor ad designs or landing pages with no specific customer benefits. Optimize the conversion rate with quality ads and landing pages that clearly present brand offers.
Examine relevant ad display formats
Different ad display formats like text-based, video, and pop-up ads exist. Each of these ad delivery methods has specific conversion rates. For instance, video ads' average click-through rate (CTR) is 1.84 percent. In comparison, pop-up ads have 3.09 percent.
The publisher’s platform also determines the best ad format for web visitors. Short video ads flow naturally with YouTube channels and pop-up ads with blogs.
Advertise in-demand products
Marketers can gain impressive results from pay per sale marketing by focusing on products in high demand. This offers the opportunity to grow an existing customer base and attract more potential buyers.
Also, software and manufacturing are valuable fields with high product demand. These industries often release new products, enabling advertisers to serve potential buyers with fresh offers.
Pay Per Sale Marketing FAQs
We delved deep into Pay Per Sale marketing. However, there are some frequently asked questions about it. This includes:
What is a PPS offer?
A pay per sale offer involves a contract. This prompts advertisers to pay commissions for sales generated via ads on a website. This is a win-win for the advertiser who makes sales and the publisher who earns commissions.
Does PPS differ from PPL?
Yes, pay per sale differs from pay per lead. In PPS, affiliates earn a fixed amount when they generate sales. In a PPL program, affiliates get paid for creating leads.
What are the best applications for tracking sales?
The best sales tracking applications are CRM(Customer Relationship Management) software that makes sales efficient. Examples are Salesforce, Zendesk, and Hubspot Sales Hub.