When you’re new to affiliate marketing, it’s easy to get confused by all the terms people keep throwing around. For example, “Chargebacks”, “Conversions” and “Cookies”…. wait, what? Nope, not the edible kind. (SO disappointing, I know!) So I’ve put together this glossary of common affiliate marketing terms to help you, as an affiliate-marketing-newbie, understand the terminology used within the industry.
The person selling the goods/service (also known as the “merchant”). The advertiser or merchant pays affiliates for sending traffic to the merchant’s website after a product or service is purchased.
A website owner that earns a commission for referring clicks, leads, or sales to a merchant.
Terms between a merchant and an affiliate that govern the relationship. This includes the terms on which the affiliate will be rewarded for the traffic sent to the merchant’s website.
AFFILIATE INFORMATION PAGE
A page on your website that explains the terms of your affiliate program including your commission rates, affiliate agreement, a link for existing affiliates to login, as well as a link to the signup page for new affiliates.
Promoting products using a link that is unique to you. When someone makes a purchase by clicking on your link you will receive a commission.
A link unique to you that is provided by the merchant. This link contains a tracking code that identifies the affiliate and sends traffic to the merchant’s website. For example: http://www.website.com/index.htm?afcode=695120a8914121ee5a2884bd0509167c
These links are unique in order to track the traffic coming from the affiliate site. Typically these links can be simple text links, images, product links, etc.
The person responsible for running the merchant’s affiliate program. This includes recruiting affiliates, establishing incentive programs, creating media for the affiliates, reporting on sales and paying affiliates.
This is a third party who manages affiliate programs for lots of merchants.
A program offered by a merchant which allows people to become an affiliate for their products. Can also be called an Associate Program, Partner, Referral or Revenue Sharing Program. In such a program the merchant rewards the affiliate for web traffic, sales or leads on a pay-per-click, pay-per-sale, or pay-per-lead basis.
AFFILIATE PROGRAM DIRECTORY
A comprehensive listing of merchants’ affiliate programs. The directories are typically categorized by industry and include the typical payout or commission rates. Click here for a sample list of affiliate program directories.
The process of tracking a link uniquely by affiliate using an Affiliate Link.
Synonym for “affiliate”.
Affiliate application process whereby all application are immediately accepted/approved upon submittal by the affiliate. This term can also be used to describe the process of automatically accepting all sales recorded by affiliates.
This is a graphic that you put on your website to advertise a merchant’s products.
An invalid sale that results in the affiliate’s commission being forfeited.
This is the act of someone clicking on your affiliate link and going through to your merchant’s website.
CLICK-THROUGH RATIO (CTR)
The percentage of visitors who click-through on a link to visit the merchant’s website.
When you add affiliate links to your posts, the URL tends to be some crazy-long mix of characters and numbers that make no sense at all (and look spammy). Cloaking is the process of making this URL “short and sweet”; so instead of http://www.website.com/index.htm?afcode=695120a8914121ee5a2884bd0509167c, the cloaked link looks something like this: http://www.yourownwebsite.com/recommend/product.
The predetermined fee that an affiliate earns when they sell a merchant’s product, or generate a lead or a click-through to a merchant’s website.
Refers to a text link placed within your website or blog content versus a link that is placed in the sidebar as a more traditional advertisement.
Financial rewards that an affiliate receives for an approved referral.
This is a percentage of the number of times your afflite clicks has converted to a sale compared to the total number of clicks. So if your conversion rate is 25% then that means that a quarter of your clicks have converted into sales.
A text file in a user’s browser. Cookies assign an ID to a user that has clicked your link. If the user returns and makes a purchase within a predetermined amount of time then you will be credited with the sale.
COOKIE EXPIRATION / COOKIE RETENTION
When a cookie is planted on a web browser, a date when the cookie expires is defined. This date is important because affiliate sales can only be recorded before the cookie expiration date. This period will also determine if repeat sales will be recorded.
CPA (COST PER ACTION)
The amount of cost for a conversion such as a sale or lead.
CPC (COST PER CLICK)
Cost of an individual click when paying on a per click basis.
CPM (COST PER THOUSAND)
The cost of 1000 banner impressions.
CPO (COST PER ORDER)
Same as CPA, but refers specifically to sales.
Pays the affiliate partner for every new customer that they direct to a merchant.
A list of all of the products offered by a merchant.
Refers to having your affiliates links go directly to the landing page rather than a redirect. This can help with your search engine ranking.
A page or notice on the website that makes the visitors know if you are being paid or compensated for any purchasing recommendations or product or service endorsements you make on the site. It is required if you’re doing affiliate marketing to be in accordance with FTC laws.
An affiliate link to a merchant site in an email newsletter, signature, or a dedicated email campaign.
EPC (EARNINGS PER CLICK)
Average earnings per 100 clicks. A relative rating that describes the ability to turn clicks into commissions.
Refers to the lines of code that an affiliate places on their webpage for linking to the merchant’s site. This HTML code contains the unique identifier that identifies the traffic as coming from the affiliate’s website.
How many times a digital media advertisement was displayed or viewed.
The person selling the goods/service (also known as the “advertiser”). The advertiser or merchant pays affiliates for sending traffic to the merchant’s website after a product or service is purchased.
The amount of commissions an affiliate has to earn before payment is made. This can vary between programs.
An affiliate marketing program that rewards affiliates based on each conversion to a sale. For example, when purchasing a product or service from the merchant’s website. Pay-per-sale programs usually offer the highest commissions but tend to have the lowest conversion rates.
Affiliate program that rewards affiliates for conversions to leads. A lead might include a signup form, software download, survey, contest or sweepstakes entry, signup for a trial, etc. Pay-per-lead generally offers midrange commissions and midrange to high conversion ratios.
Rewards an affiliate for each unique click to the merchant’s website. This type of affiliate program is uncommon because of click fraud or fake clicks.
Marketing in which the merchant only pays commissions for results such as conversions to sales or leads.
The process of rewarding an affiliate on a recurring basis whenever the merchant charges a customer a recurring fee. For example, a web host that charges customers on a monthly basis might reward the affiliate a percentage of each month’s payment from the customer.
Programs that pay affiliates not just for the first sale a shopper form their sites makes, but all additional sales made at the merchant’s site over the life of the customer.
Refers to a piece of text with an affiliate link attached.
A unique code attached to your affiliate links which is used to track your sales.
The highest performing affiliates. Typically less than 1% of affiliates are super affiliates yet that 1% typically will bring more than 90% of your sales.
Offering the right offer to the right customer at the right time.
A link that is not accompanied by an image.
Refers to the hidden 1X1 pixel tracking code that is placed on the confirmation page of your store for tracking sales conversions.
The process of only counting unique clicks from each web visitor. Unique clicks are typically tracked by recording the IP address and browser header.
Whilst this list is comprehensive, it’s certainly not exhaustive. Can you think of any other terms you’ve heard in relation to affiliate marketing that make you go, “huh…?” Let me know in the comments, and I’ll add them to the list!