Many affiliate freshmen enter the industry dreaming of sipping champagne on a yacht somewhere in Monaco while their money grows.

But unfortunately, affiliate business is more about dilemmas: what products to promote, how to route traffic, and finally, how to set payouts to make the business profitable.

Of course, even solving all these issues won't guarantee you tons of gold, but it's worth trying.

So, in this article, we'd like to go through everything concerning payout modes. We'll have a closer look at what they are, how to choose between them, and what option suits best for maximum profit.

Let's go!

The types of payout modes​

Payouts mean a lot. So, deciding on the right affiliate commission will greatly affect your network. Usually, affiliate networks have two types of payouts in their system:
  • Ratio rate
  • Fixed-rate
Let's have a closer look at each of them.

Ratio rate​

The ratio rate is a mode in a set % of the amount of conversion received from the advertiser. This mode is more frequently used since it works well with different types of offers, especially smartlinks.

Fixed-rate mode​

Unlike the ratio rate, the fixed rate implies a fixed amount of payout for any conversion.

For publishers, this mode is the best choice if they deal with offers varying in GEO, device, and type of traffic.

For affiliate networks, the fixed-rate mode is a perfect way to increase efficiency and maximize gains.

Brokerage tools​

In fact, fixed payouts are not such a rare thing. Many CPA networks offer such an option, but their work on offsetting advertisers' conversions and publishers' payouts often needs improvement.

And here is the point where brokerage can help.

A brokerage is a tool that recasts traffic payments from the mode and amount offered by the advertiser into a mode beneficial for the network and publishers. Besides, brokerage allows networks to do the following:
  • Select individual rates
  • Select individual daily caps
  • Select budgets
  • Set a fixed-rate amount per lead (PPL)
  • Set a fixed-rate amount for conversions in cumulative mode

Individual rates​

When a network sets payouts, individual rates allow it to select the following attributes:
  • GEO, or the source of traffic
  • Publishers (or groups of publishers)
  • Users' devices (desktop, mobile, etc.)

Individual daily caps​

Individual daily caps control conversions and allow networks to restrict their daily number if needed. This limitation may apply to a specific offer or a publisher and cover 24 hrs.

Offer budgets​

The fixed-rate mode is an excellent means for advertising new GEOs and new verticals as well as supporting certain publishers.

But when you switch to this mode, it's critical to track publishers' payouts as it may turn out that they go beyond the income limit from generated traffic.
The instrument of budgeting controls these limits and doesn't allow excess.

Fixed-rate amount per lead (PPL)​

The PPL implies paying a fixed amount for each lead. At the same time, this amount may vary a lot depending on specific publishers, geo, type of traffic, or device.

Another thing is that the conversion can be of two types: a zero-sum (when a customer doesn't pay for something) or a fixed-sum (when a customer makes a purchase).

In this case, the payment for the lead is made according to the amount set in the offer.

Cumulative mode​

The cumulative mode specifies the conversion's commission, no matter what its total amount is. Therefore, this option perfectly matches smartlinks and smart campaigns. Let's have a more detailed look:

Imagine we have an offer A with fixed-rate commission settings and a cumulative payout mode. When A receives a conversion, the system compares its amount and the fixed-rate amount intended for the publisher.

While comparing, the system reviews whether the amount of this conversion + the amount for previous conversions is enough to make a payout.

If the sum is enough, the system makes a payout. If not, this sum goes to the publisher's credit, waiting for the following conversion.

As you remember, a picture is worth a thousand words:

A publisher brought a conversion for the offer equal to $6. For each conversion, this publisher gets a fixed rate commission of $10.

$10 > $6. Therefore there won't be a payout this time. This $6 (minus the network's commission, let's say 20% - i.e., $1.2) goes to the publisher's balance, i.e., $4.8.

After that, the publisher brings another conversion for $8 (minus 20% = $6.4).
This sum adds to the current balance, which makes $11.2 in total.

$11.2 is enough to pay our publisher their hard-earned $10.

The remnant of $1.2 goes to the publisher's balance and will be waiting for the following conversions
. Looks pretty easy.

Switch payout modes to maximize profit​

When running a network, it's essential to remain flexible and clearly understand the conditions you work with.

If your publishers drive more organic traffic, the ratio rate is a better option.

If you partner with media buyers or publishers more interested in the size of the reward, then fixed rates and brokerage appear more suitable.

Besides, it's worth mentioning that brokerage tools are a must for those networks that want to attract more competent publishers or offer more flexible terms of partnerships.

Have some more questions or doubts about payouts? Or want to embed Brokerage tools into your network? Feel free to get in touch with us. We're happy to help you resolve any issue.