performance marketing

Author: Lina Nguyen

Marketing and Account Coordinator

Pros and Cons of Flat Fee vs. Performance Marketing Models

by Lina Nguyen | Oct 7, 2020 | Publisher

You have been creating content for some time now and are considering monetizing your website. As you are researching, you see various models on how you could potentially get paid. You may have come across flat fee and performance-based models most often and are curious on which model to implement throughout your site. To learn the pros and cons of flat fee vs. performance marketing, read on!

Flat Fee Model

You may have heard the term “flat fee placements” often when working with brands. Chron defines this pricing model as how businesses, freelancers and content creators charge a fixed rate for their service. Below are some examples of the types of work that would be appropriate for this type of partner model:

 

  • Dedicated, sponsored posts
  • Social media campaigns
  • Brand ambassador campaigns

Pros and Cons of Flat Fee Model

When considering which type of pricing model to charge, think about what your goals are and what assets you bring to the table. With any model, there will be pros and cons – consider these factors before making your decision in charging a flat fee model.

Pros

With a flat fee model, the work and effort that you put into content will reward you sooner rather than later. When you get paid, you will receive immediate reward for the hard work that you put in. With this model, you will be able to predict your revenue more easily as this is guaranteed earnings.

When charging a flat rate, Smashing Magazine suggests you consider how valuable your work would be for your client and that your rate must reflect the true value. Think to yourself ‘Would my work help the client reach their business goals?’ Some example goals can be increased brand awareness or sales.

Cons

Although the flat fee model is a practical approach if the value of your work is easily measurable, this model also means your earning potential is capped at the fixed rate that you have negotiated. There is a possibility that you could earn much more than the one-time flat fee rate you charge.

In addition, when working on a flat fee model, you may have less editorial authority and freedom when writing content. As the client is paying you to talk about their product, the required key messages may position your post to be biased and in favour of the brand. With performance marketing, there may still be approval processes; however, it is typically less rigorous and your content maintains editorial integrity. As your audience trusts you and your views, you should ensure that the brand’s required key messages and your own opinions are aligned.

Another potential downside to this model is that you may have to constantly arrange deals and reach out to establish partnerships in order to have a steady stream of revenue. Whereas with performance marketing and the benefits of working with an affiliate network, you can more easily access several potential partners up front and focus more heavily on your content creation.

Performance-based Model

Although performance marketing has been around for a long time, not as many people are familiar with this pricing model. Performance marketing, also known as affiliate marketing, is defined by Neil Patel as a type of product promotion or recommendation to your readers where you receive a commission from the merchant upon successful desired actions taken by the customer (i.e. clicks, leads, approvals, etc).

Pros and Cons of Performance-based Model

Like the flat fee model, there are also pros and cons to the performance-based model. Consider these factors if you want to leverage the affiliate model on your site.

Pros

Performance-based models are meant for long term sustained growth and revenue for your site. Over time you should be able to have a steadier and growing stream of revenue as you invest in SEO for your site. This model is especially great if you are already using and enjoying these products. Smart Blogger encourages monetizing products that you already love and use.

Another advantage to this this pricing model is that you can Make Affiliate Marketing Work for You by investing in your SEO strategy and selecting products that work for your audience. With affiliate marketing, you may potentially earn more than flat fees in the long run as earnings are uncapped. Learn how you can Build Revenue Through Affiliate Marketing.

If you are working with affiliate networks like us, you will also have access to more advertising relationships with potential clients all in one place without having to seek them out individually.

Cons

To make performance marketing work and be effective, you need to ensure you bring quality traffic to your website. As results aren’t guaranteed, 99designs mentions that you won’t get paid if your post doesn’t perform.

Starting out with the affiliate model could be difficult for some publishers. The Blueprint notes that this model does take time and effort to nurture before you can drive results. As a kind reminder, don’t get discouraged when you do not see results right away. Instead, focus on producing high quality content for your audience and investing in your SEO strategy to grow your site’s traffic. The good news is, that is likely what your focus is anyways.

Which Model Should You Consider?

Now that you have a better understanding of the pros and cons to both flat fee and performance-based models, which model should you consider? Here are some considerations, as every publisher is different.

You can consider using both models and have them work together to diversify your revenue strategy. Consider using the flat fee model with more niche brands that are atypical to the core of your content to see how your audience responds. On topics that you normally cover, use affiliate marketing as your audience is already familiar with these brands on your site, and it is a monetization opportunity you can access time and time again as you create more topical content.

Once you have worked with a client directly on a flat fee project and have showcased your value, you can explore greater partnership opportunities. As your site grows and you gain more credibility, more brands will start coming to you instead of you coming to them. Another advantage once you have built a name for yourself is that you could have more power to work on your model of choice. Consider a hybrid model where the brand can pay you a flat fee and include the performance-based component for additional revenue.

If you are still fairly new to monetizing your content and have not had the opportunity to work with brands on a flat fee model yet, consider starting with affiliate marketing by joining a network. Once you join an affiliate network like Fintel Connect, you will have access to robust reporting which can help you better measure your value to brands. Knowing your metrics and how your site performs will also help you more accurately price out your flat fee rates for clients if you choose to offer both models on your site.

Conclusion

Flat fee and performance-based models are each great for different reasons. Different models will work for different people. Pricing models are not one size fits all – when deciding which model you should use, consider our suggestions and test out different methods and combinations to see what works best for you.

If you want to get more familiar with what affiliate marketing is, here are 4 Easy Steps to Becoming an Affiliate. If you are interested in promoting financial products, sign up to Fintel Connect and join our network!

We hope that this blog was helpful for your website’s growth strategy.

If you’re interested in working with financially focused products, sign up to our Fintel Connect Network here!

Speak to Us to Learn More

If you’re a publisher and want to know more about how affiliate marketing can boost your revenue, contact us – we’d love to hear from you!

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