Pay-per-sale or PPS (sometimes referred to as cost-per-sale or CPS) is an online advertisement pricing system where the publisher or website owner is paid on the basis of the number of sales that are directly generated by an advertisement. It is a variant of the CPA (cost per action) model, where the advertiser pays the publisher and/or website owner in proportion to the number of actions committed by the readers or visitors to the website.
In many cases, it is impractical to track all the sales generated by an advertisement. However, it is more easily tracked for full online transactions such as selling songs directly on the internet. Unique identifiers, which can be stored in cookies or included in the URL, are used to track the movement of the prospective buyer to ensure that all such sales are attributed to the advertisement in question.
Some companies handle transactions "offline," meaning sales driven by online traffic are closed via inbound telephone calls or in person rather than online. In these cases, a cookie-based rotating system of telephone numbers can be used to accurately trace a phone call to the source online visitor. This way, a phone call that converts into business can be traced to the keyword search term that drove the phone call. As a result, bids on the source traffic can be appropriately adjusted and managed.
Pay-per-Sale Search Engine Marketing is a variant of pay-per-sale, whereby the traffic source is largely search engine traffic such as that from Google's AdWords "pay-per-click" system. The business model means that merchants no longer bear the cost of "pay-per-click"; instead, the "pay-per-sale" provider takes on the risk of conversion.
CPS belongs to the larger family of CPA, which is different from Cost Per Impression in which advertisers pay every time their advertisement is displayed, irrespective of whether the display created any action on the part of reader or visitor to the website or not.
Affiliate Networks usually offer the "pay-per-sale" business model and have done so since inception. However, there is typically an upfront set-up fee, as well as monthly minimum charges for the advertiser, in addition to relatively stringent requirements around entry into the network to begin with. The industry has four core players: the merchant (also known as retailer or brand), the network, the publisher (also known as 'the affiliate'), and the customer. Typically, affiliate networks such as ValueClick or Commission Junction will connect merchants (advertisers) with publishers, or owners of sites, which can send traffic to the merchants' sites in exchange for a bounty, or commission for each sale delivered.
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