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Today, as become have become internet savvy and they know the importance of the internet and affiliate marketing over the internet. Both merchants and affiliates can see the benefits of affiliate marketing for both of them. The merchant sees affiliate marketing today as the chance to advertise their products at a lower cost. The affiliates, on the other hand, sees affiliate marketing as an easy way of earning profits online by doing what they like most, and that is by creating websites. For merchants and affiliates alike, affiliate marketing is now considered as a main source of profits and revenues.

There are actually different types or classes of affiliate marketing, and the number of types will depend on how one will classify them. The most basic affiliate marketing programs, however, falls under two categories: pay-per-click (PPC), and pay-per-performance (PPP).

Pay Per Click (PPC)

PPC is the most popular type of affiliate marketing for affiliates with small websites, and probably the easiest way for them to earn money. In this affiliate marketing type, the merchant pays his affiliate whenever a visitor is referred to his site, that is whenever someone clicks through the merchant\'s banner or text ads. The affiliate gets paid a certain amount even if the visitor he referred does not purchase anything from the merchant\'s site. However, typical fees for PPC affiliate programs are small, usually not exceeding a dollar for every click.

Pay Per Performance (PPP)

PPP affiliate marketing is the most popular among merchants and is the most lucrative type for the affiliates. In this type of affiliate program, the merchant only pays the affiliate whenever his referral translates into an action—that is whenever the visitor he has referred actually buys something from the merchant\'s site or when the visitor becomes a lead.
Pay-per-performance affiliate marketing can be further classified into two popular types: pay-per-sales (PPS) and pay-per-lead (PPL).

Pay Per Sale (PPS)

In a pay-per-sale type of affiliate marketing, the merchants pay the affiliates a certain fee whenever the visitors he has referred to the merchant\'s site actually buys something from the merchant\'s site. Affiliates are often paid on commission basis, although other merchants would opt to pay a fixed fee. But no matter what the basis of the fee is, it is generally higher than the fee paid to affiliates in a pay-per-click affiliate program.

Pay Per Lead (PPL)

The pay-per-lead type of affiliate marketing is a slight variation of the PPS type and is often used by insurance and finance companies and other companies who rely on leads for their company to grow. In this type of affiliate marketing, the affiliate is paid whenever the visitor he referred to the merchant\'s site fills up an application form or any similar form related to the business of the company.
Aside from these three specific types of affiliate marketing, a lot of other affiliate marketing types exist. If the classification is based on the depth of the affiliate network, it can be classified as single-tier, two-tier, and multi-tier affiliate marketing.