Affiliate Marketing Glossary Of Terms

There has been a strong inflow of new affiliate marketers in recent months and many of them are not sure of the affiliate terms that are frequently used. Below is a quick guide to the terms commonly used in affiliate marketing which can be of big help to affiliate marketing bloggers and newbies.

ABOVE THE FOLD

When someone visits your website or blog, “above the fold” is the section that is directly visible to him/her without scrolling further.

ADVERTISER

When a company wants its products or services to be published and promoted on an affiliates/partners website, it is referred to as “advertiser” or “merchant”.

ADWARE

Computer programs that are available for free sometimes include software that automatically displays online advertisements, which in many instances are unwanted. This type of software is called “adware” or “spyware” and most advertisers refuse to deal with affiliates who use this software as they can be offending to users and difficult to remove.

AFFILIATE

An individual who gets paid by a company or advertiser for promoting its products or services and driving web traffic, leads and sales. Further details about out lotto affiliate program here. 

AFFILIATE AGREEMENT

This is the deal between the affiliate and the merchant which defines the rules, terms of services and legalities of the affiliate relationship.

AFFILIATE LINK

A specific link with a unique tracking code provided to an affiliate by the merchant to monitor and record website traffic and the sales generated by the affiliate.

AFFILIATE MANAGER

The individual responsible for managing a merchant’s affiliate program. Affiliate managers handle the recruitment of affiliates and make sure that they adopt legitimate methods in promoting products and services and generating sales for the merchant. Also called “OPM”, an affiliate manager may be a merchant’s own employee or be a freelance or contract service provider.

AFFILIATE NETWORK

An affiliate network is a third-party company handling affiliate program management for a merchant. Affiliate networks are responsible for tracking sales and traffic generated by affiliates and make sure they are properly paid for their efforts. They make reports while acting as a link between the merchant and the affiliates. They also assist the merchant in looking for potential affiliates and publishers to promote their products and services.

AFFILIATE PROGRAM

A program adopted by a merchant to boost website traffic and sales. The program allows individuals to promote, recommend or refer the merchant’s products or services to potential online customers. The individuals promoting the products are referred to as the “affiliates”. The affiliates will then get paid or receive a commission according to the outcome of their referrals that are tracked for the Affiliate Program.

AFFILIATE SOFTWARE

Sometimes a merchant will decide not to use an affiliate network and instead handle its own affiliate program. The merchant will invest in an “affiliate software” to run the program in-house.

AFFILIATE TRACKING

A unique ID specifically attached to the links used by affiliates to drive traffic to the merchant’s website. Affiliates monitor their sales generation and referrals through affiliate tracking. Here is an example: merchant.com/?ID=YourUniqueID. 

ASSOCIATE

Another term for affiliate.  Also sometimes called a partner program. 

AUTO APPROVAL

This is one of two ways where merchants decide whether or not to accept an affiliate into their program. In auto-approval, merchants automatically accept and approve all affiliate applications. The other method is manual approval.

BANNER AD

A graphical ad that is embedded into an affiliate’s website to promote a merchant.

CHARGE BACK

This occurs when a sale falls through and is not completed.  If the merchant already paid you for a sale you generated but did not actually finalize, the amount will be deducted from your commissions as an affiliate. The same thing happens in lead generation if merchants find out that leads sent to them are fraudulent.

CLICK FRAUD

This refers to the illegal practice of repeatedly clicking an ad published on a website with the intention of increasing revenue through a pay-per-click (PPC) compensation method. The “fake clicks” can be done manually or by using automated software designed to click banner ads or text links. The traffic from these fraudulent clicks is not really interested in the products or services being sold by the merchant. The merchant loses money by paying for clicks that do not actually translate to sales.

CLICK-THROUGH

Also spelled as “Click Thru”, this relates to the act of clicking an advertisement link which could be an image or text that will connect you to the merchant’s website.  Content from different pages or types of promotion will give a different click-through rate.  As an example The Lottery Office Review type content will give a high click-through rate as compared to a generic page about the lottery. 

CLICK-THROUGH RATE (CTR)

Refers to the percentage of people viewing a webpage by clicking an advertisement link. It is calculated by taking the number of clicks received by an affiliate link divided by the number of times the link was displayed (referred to as “impressions”). Multiply the result by 100 to find your actual CTR percentage. For example, if your ad is being displayed 100 times and clicked only once, converting to figures it would be: 1/100 = .01,  multiply the result by 100: .01 x 100, your CTR is 1%.

CLOAKING

Cloaking is the process of making an affiliate link shorter and hiding the tracking code to make it less visible to potential commission thieves. Though the process does not go with the guidelines of popular search engines like Google, cloaking has become an acceptable and widely used practice in affiliate marketing to counter affiliate commission theft. 

CONTEXTUAL LINK

Any clickable text placed within the body of content on a blog or website. This type of link is quite different from the traditional ad links that are purposely placed in the sidebar of a webpage. Contextual links serve as keywords for a particular content, which can help boost search rankings.  As an example Australian Affiliate Program could be used as a contextual link for The Lottery Office Affiliate Program

CO-BRANDING

This is a marketing strategy used by merchants whereby they create a custom landing page that allows affiliates to send referrals. The landing page contains the merchant’s branding as well as the logo or name of the affiliate sending referrals. For example, a merchant might make a landing page on its website which also shows the specific affiliate’s branding information.  This strategy can be beneficial for both the merchant and the affiliate as it strengthens their relationship and can increase conversion rates. Most of the time, co-branding opportunities are only offered to Super Affiliates.

COMMISSION

When an affiliate achieves a predefined positive outcome for the merchant, the affiliate is paid a “commission” or fee by the merchant. Commissions are mainly performance-based – the more traffic and sales generated the more revenue the affiliate earns.

CONVERSION

Getting a recipient of your marketing message to complete your intended goal. In affiliate marketing, conversion comes in many forms – it could be: clicking an ad link, going to a landing page, email signup, filling out a form, or actually buying a product or service.

CONVERSION RATE

This refers to the percentage of visitors to a particular website who actually take a desired action or conversion. This is calculated by taking the number of sales generated by the link divided by the number of website views, multiplied by 100. For example, your ad link received 100 views and resulted in 2 sales – applying the formula, you’ll have (2 sales/100 impressions) x 100 – your conversion rate is 2%.

COOKIES

Cookies are data stored in a user’s browser during website visits. They are used for different reasons on the internet, but in affiliate marketing, they are used primarily for tracking purposes. An affiliate link used by affiliates in promoting/publishing products on their website contains a unique tracking ID. When a web visitor clicks on that link, the tracking ID is stored on the user’s browser in a text file (referred to as a “cookie”) within a predefined period before it is manually cleared. If that user comes back to the website within the predefined period and completes a desired action, the conversion will be credited to the original affiliate ID. For example, if someone clicks on your affiliate link, the cookie is automatically saved on his/her browser. If the user revisits the website before the cookie expires (regardless of whether he/she clicks on your affiliate link again) and makes a purchase, the sale will be credited to you and you will be paid commission for that sale.

COOKIE EXPIRATION

In affiliate marketing, cookie expiration refers to the amount of time an affiliate link must generate a conversion. Affiliate managers usually set the cookie duration at between 30-90 days. Let’s say the user makes a purchase within the 90-day period, the sale will still be credited to the original affiliate ID. However, beyond that duration, and even if the user ends up buying a product, the owner of the affiliate ID will not be paid for the sale. A cookie expiration is considered low or short if it is less than 30 days, while it is considered above average if it extends beyond 90 days.

COOKIE STUFFING

There are instances when a user visits a particular website and cookies from other merchants are deposited into the user’s computer even if he/she has not even visited the merchants or the affiliate’s website. In most cases, the user is completely unaware of the process. Cookie stuffing is a technique adopted by some affiliates to increase their revenue. Cookies are dropped onto as many computers as possible, and in the event that the users visit the merchant’s website and buy a product, the sale will then be credited to the affiliate. This practice is more likely to occur in bigger merchants with a broader reach. Legitimate affiliates discourage cookie stuffing and most merchants avoid affiliates who use the cookie stuffing strategy.

CPA

Cost Per Action or Cost Per Acquisition, this relates to the amount of money paid to affiliates or publishers for generating a desired outcome such as an email signup or a sale.

CPC

Cost Per Click is another advertising model used to drive traffic to a merchant’s website. Affiliates are being paid for every click received by their affiliate links. CPC can be obtained by taking the number of clicks generated divided by the ad campaign cost. For example, if your ad campaign cost you $200 and the campaign received 100 clicks: 100/200 = .50 (your CPC is .50 cents).

CPM

Cost Per Thousand refers to the amount of money a merchant pays for every 1000 impressions. For example, if a publisher’s rate is $6 CPM, and a merchant wants to show an ad 10,000 times (impressions/1000 x CPM: 10,000/1000 x 6 = $60), the merchant will have to pay a $60 advertising fee.

CREATIVE

Creative is a type of marketing material, usually a pre-made text link or image/graphical ad, given to affiliates so they could easily promote a merchant’s website and products/services.

CUSTOMER BOUNTY

When affiliates generate leads or sales for the merchant, they are being paid a predefined fee called “bounty”. This is also called “commission”.

DATAFEED

Merchants organize product details through a “datafeed”. Product descriptions, images, prices, as well as affiliate links are listed in a file so publishers can better promote the products. Datafeeds are commonly used in setting up online stores that feature affiliate products.

DISCLOSURE

Affiliate marketers are required to publish a notice on their website stating their involvement in affiliate marketing whereby they are getting paid by a merchant for product endorsements, purchasing recommendations and any other marketing efforts they make. FTC laws make it mandatory to have a proper disclosure policy in order to uphold the credibility of the affiliate marketing business. 

E-MAIL LINK

An e-mail link is an affiliate link purposely made for email marketing.

EPC

Earnings Per Click – this is the average revenue you earn every time your affiliate link is clicked. To calculate your EPC, take the total amount of commissions you’ve earned through your affiliate link divided by the total number of clicks received by that link. For example, if your affiliate link was clicked on 12,000 times during the entire duration of your affiliate relationship, and the same link generated a total of $4000 in sales, applying the formula, 4000/12,000 = 0.33, this means that for every click on your affiliate link, you get paid an average of 33 cents.

FIRST CLICK

In this affiliate program, a sale generated within the cookie expiration limits will be credited to the affiliate link who received the first click. This means that even if the same user visited a second affiliate website and actually made a purchase through that second affiliate link, the commission will still go to the first affiliate. First click and last click have long been the subject of debate in affiliate marketing as marketers argue which of the two provides more benefits to both the merchant and the affiliate.

IMPRESSION

An impression refers to the number of times a promotional material is shown on a webpage. One impression is counted for every time the ad is displayed.

IN-HOUSE

When a merchant runs its own affiliate program without the need for an affiliate network, the merchant is said to be operating the program “in-house”. This is done through the use of affiliate software, which can be developed in house or provided by a software company that specializes in affiliate tracking software.

INDIE PROGRAM

Independent affiliate programs (indie programs) are programs that are being run by the merchant in-house. These programs run through an affiliate software and the merchants handle the program themselves without paying for an affiliate network to do the job.

JOINT VENTURE (JV)

This refers to a business relationship built for one project, product or event where two entrepreneurs work hand in hand in creating a single product and then promote it simultaneously as a joint effort.

LAST CLICK

As opposed to the “first click” program, last click gives the credit to the last affiliate who receives a click and eventually generates a sale, even if there is still a valid cookie stored on the user’s browser coming from a prior click on another affiliate link. People involved in affiliate marketing are still debating whether first click or last click gives the most advantage to both the merchant and the affiliate.

MANUAL APPROVAL

This is one way for merchants to determine whether or not to approve an affiliate application. Contrary to automatic approval, manual approval enables the affiliate manager or merchant to evaluate each affiliate application and then decide who should enter the program.

MASTER AFFILIATE NETWORK

A master affiliate network works by finding as many affiliate programs it can find and then sign up with them. The network then looks for sub-affiliates to use its link. This is done by placing a JavaScript code on the affiliate’s website. The network then gets a share of the commission generated – the cut is usually about 25%. VigLink and SkimLinks are the top master affiliate networks.

MERCHANT

This refers to the company that owns and produces the products or services promoted by an affiliate. They are sometimes called “advertisers”. They pay commission to affiliates whenever they generate leads or sales.

NICHE

Niche is a specific area in marketing which focuses on a particular product or topic. It concentrates on a smaller customer target where these customers are willing to spend money on a particular area of interest. For instance, if your website talks a lot about dogs, then dogs would be your niche. If you want to broaden the market, then you would target pets. 

OPM

Stands for Outsourced Program Manager and is also known as “Affiliate Manager”. This individual manages an affiliate program and handles affiliate transactions.

OPT-IN RATE

Refers to the proportion of website visitors who sign up to your mailing list. Let’s say 100 people were presented with the opportunity to sign up to your email list and 1 person subscribes – your opt-in rate would be 1%. 

PPS

Pay Per Sale. Another type of affiliate program whereby the affiliate receives a commission whenever he/she generates an actual sale.

PPL

In this type of affiliate program, a merchant pays an affiliate a commission for every lead generated. A lead comes in various forms – it could be a requested quote, a form filled out or anything involving contact information indicated by the merchant as a commissionable lead. In this type of agreement, an affiliate only gets paid if a visitor signs up to the merchant’s website.

PPC

In this advertising model, the affiliate earns a commission for every click received by his/her affiliate link, regardless of whether or not it ended up as a sale or lead for the merchant. Google Adwords is associated with this type of affiliate program.

PAYMENT THRESHOLD

This refers to the minimum accumulated commission an affiliate should earn before he/she receives payment from the merchant. In some instances, the merchants themselves set a specific payment threshold to ease accounting costs. In other cases it is the affiliate who sets a payment threshold – this way, the affiliate will get one large check instead of getting paid frequent smaller ones.

POD

Stands for Point of Difference. This refers to a website’s advantage or edge over the competitors with a similar niche. The point of difference could be a unique service, engaging high-quality content or a different product which make a website stand out among the rest.

PRIVACY POLICY

When your website receives personal information from visitors, such as their contact details, or if the information is received through tracking methods, you are required to have a privacy policy outlining what will happen to their personal data. Merchants usually ask affiliate applicants to have their own privacy policy before they are allowed to take part in their affiliate program. Publishers’ websites should also use Google Analytics and Google AdSense.

PLR

Private Label Rights. This denotes content that you can acquire or buy from the original owners, promote it using your own brand and claim ownership of the material. You can also modify it if you want to.

RAW CLICKS

In affiliate marketing, raw clicks let you see every click that occurs on your affiliate link, even if the clicks come from the same user many times a day. They are shown in conjunction with Unique Clicks whereby affiliates can compare the number of clicks coming from the same path and the overall clicks made by individual users.

RECURRING COMMISSIONS

Offered by “Services”. Some affiliate programs offer high paying recurring, affiliate commissions wherein affiliates are repeatedly paid a commission. The affiliate receives payment on the initial sign up and continues to be paid for as long as the customer continues to pay for a product or service. One example for this is when an affiliate makes a referral to a hosting service. Once the visitor signs up, the affiliate is paid a commission and every month, as the customer pays the bill, the affiliate also receives a predefined commission.

RESIDUAL EARNINGS

Also called “lifetime commissions”, residual earnings are payments you receive on a regular basis. You get paid indefinitely for the lifetime sales for every new referral you make, as opposed to only receiving payment during the initial purchase made by the new customer.

ROAS

Return on Advertising Spending, also referred to as Return on Ad Spend and ROI. ROAS refers to the total revenue earned through a particular advertising campaign. To calculate ROAS, you take the total income divided by the ad spend and then multiply the result by 100. ROAS is in percentage form. For example, if your ad campaign cost you $200 and your gross profit stands at $600, applying the formula you have 600/200 = 3, multiply by 100, 3 x 100 = 300. Your ROAS in this example is 300%. The amount that exceeds 100% would be your profit – this means that your campaign earned you a 200% profit.

ROI

Stands for Return on Investment. If you want to know whether your advertising campaign is a success or a failure, you might want to calculate your ROI. You can find ROI using the same formula as ROAS. But there is an alternative way of calculating it. Take the gross profit, subtract it by the total campaign cost, divide the result by the cost of the campaign and then multiply by 100. Let’s say the total cost of your ad campaign is $200 and your gross profit is $600: 600 – 200 = 400; 400/200 = 2; 2 x 100 = 200. Your ROI is 200%.

SEO

Stands for Search Engine Optimization. This refers to the practice of ensuring that your website will be ranked higher on the list of search results returned by any search engine. This is to drive more visitors to your website.

SID TRACKING

Also known as MID tracking, CID tracking and TID tracking. SID is a sub campaign tracking method which consists of an alphanumeric code that affiliates use to monitor the success of a particular marketing effort. CJ Affiliates (formerly Commission Junction) supports sub campaign tracking like SID which is being referred to differently by every affiliate network.

SPLIT TESTING

Also known as A/B testing. If you want to figure out what content version works best for your website, you may conduct split testing which involves a randomized experiment of comparing two content versions – content could either be an advertisement or a sales copy. Split testing helps improve a website’s conversion rate.

SQUEEZE PAGE

The landing page or squeeze page is designed to remove any distractions for one desired goal and that is to get the email address of each visitor. Affiliate marketers use the squeeze page to convince visitors to provide their email address by offering them freebies.  

SUPER AFFILIATES

These are the top affiliates whose combined generated sales make up more than 80% of the affiliate program’s total sales. Super affiliates usually comprise the top 5% of the program. The term traditionally applied to affiliates who earn more than $10,000 monthly.

TRACKING METHOD

This refers to the type of tracking a merchant adopts to monitor affiliate activity, leads and sales.

TEXT LINK

A text link is created by embedding a link in words or phrases within the body of the content. This differs from banner ads which make use of an image or computer graphics to link to a particular webpage.

TRACKING CODE

Refers to affiliate tracking. The code contains a unique ID attached to an affiliate link which enables an affiliate to track sales generated or referrals made to the merchant. This is how a tracking code should look:
merchant.com/?ID=YOURUNIQUEID

TOS

Terms of Service. In affiliate marketing, this refers to an affiliate program’s terms of use which outline the rules and guidelines of the program, as well as the dos and don’ts. In some instances, affiliates are not allowed to bid on the merchant’s brand keywords. If they do so, they will be kicked out from the program.

TURNKEY WEBSITES / DFY

Also referred to as “Done For You”. These are pre-built websites that are ready to run, complete with relevant items such as a domain name, shopping cart system, scripts and web hosting. Turnkey websites are completely functional and are made available for sale to affiliate marketers. 

TWO-TIER (2-TIER)

This program enables affiliates and marketers to not only receive commissions from their own sales but also earn for every referral made or new recruit brought in to the program. The affiliate on the first tier receives a small share of the commissions earned by new recruits. Affiliates can recruit new members directly if they directly knew them, or they can do it indirectly, meaning they get someone to sign up to the program using their affiliate link.

UNIQUE CLICKS

This is a term that is used to refer to the actual number of clicks from individual users. Unique clicks run in conjunction with raw clicks (total number of clicks received by a link, including repeated clicks from the same user). If one person clicks your affiliate link on their home computer 3 times, then 1 of those would be counted as a unique click. After 24 hours, the unique click resets. So if the same person visits your website after 6 days and again clicks on your link, then you would now have a record of 2 unique clicks and 4 raw clicks.

WHITE-LABEL

White-labeling enables affiliates to market a merchant’s product under their own brand. Prospective customers would assume that the products being sold are actually owned by the affiliate since the actual merchant is not mentioned on the website. The white-labeling process occurs when a merchant creates a website designed solely for the affiliate under the merchant’s server and control. The affiliates are then allowed to make it appear as if it is their website’s subdomain. Merchants most likely offer white-labeling to super affiliates.

WSO

Warrior Special Offer. This is a deal exclusively available on Warrior Forum – a digital marketing forum site. Members promote content by making special offers which are then listed under the WSO board. This type of marketing strategy is still being debated online, so be careful.

There has been a strong inflow of new affiliate marketers in recent months and many of them are not sure of the affiliate terms that are frequently used. Below is a quick guide to the terms commonly used in affiliate marketing which can be of big help to affiliate marketing bloggers and newbies.

ABOVE THE FOLD

When someone visits your website or blog, “above the fold” is the section that is directly visible to him/her without scrolling further.

ADVERTISER

When a company wants its products or services to be published and promoted on an affiliates/partners website, it is referred to as “advertiser” or “merchant”.

ADWARE

Computer programs that are available for free sometimes include software that automatically displays online advertisements, which in many instances are unwanted. This type of software is called “adware” or “spyware” and most advertisers refuse to deal with affiliates who use this software as they can be offending to users and difficult to remove.

AFFILIATE

An individual who gets paid by a company or advertiser for promoting its products or services and driving web traffic, leads and sales. Further details about out lotto affiliate program here. 

AFFILIATE AGREEMENT

This is the deal between the affiliate and the merchant which defines the rules, terms of services and legalities of the affiliate relationship.

AFFILIATE LINK

A specific link with a unique tracking code provided to an affiliate by the merchant to monitor and record website traffic and the sales generated by the affiliate.

AFFILIATE MANAGER

The individual responsible for managing a merchant’s affiliate program. Affiliate managers handle the recruitment of affiliates and make sure that they adopt legitimate methods in promoting products and services and generating sales for the merchant. Also called “OPM”, an affiliate manager may be a merchant’s own employee or be a freelance or contract service provider.

AFFILIATE NETWORK

An affiliate network is a third-party company handling affiliate program management for a merchant. Affiliate networks are responsible for tracking sales and traffic generated by affiliates and make sure they are properly paid for their efforts. They make reports while acting as a link between the merchant and the affiliates. They also assist the merchant in looking for potential affiliates and publishers to promote their products and services.

AFFILIATE PROGRAM

A program adopted by a merchant to boost website traffic and sales. The program allows individuals to promote, recommend or refer the merchant’s products or services to potential online customers. The individuals promoting the products are referred to as the “affiliates”. The affiliates will then get paid or receive a commission according to the outcome of their referrals that are tracked for the Affiliate Program.

AFFILIATE SOFTWARE

Sometimes a merchant will decide not to use an affiliate network and instead handle its own affiliate program. The merchant will invest in an “affiliate software” to run the program in-house.

AFFILIATE TRACKING

A unique ID specifically attached to the links used by affiliates to drive traffic to the merchant’s website. Affiliates monitor their sales generation and referrals through affiliate tracking. Here is an example: merchant.com/?ID=YourUniqueID. 

ASSOCIATE

Another term for affiliate.  Also sometimes called a partner program. 

AUTO APPROVAL

This is one of two ways where merchants decide whether or not to accept an affiliate into their program. In auto-approval, merchants automatically accept and approve all affiliate applications. The other method is manual approval.

BANNER AD

A graphical ad that is embedded into an affiliate’s website to promote a merchant.

CHARGE BACK

This occurs when a sale falls through and is not completed.  If the merchant already paid you for a sale you generated but did not actually finalize, the amount will be deducted from your commissions as an affiliate. The same thing happens in lead generation if merchants find out that leads sent to them are fraudulent.

CLICK FRAUD

This refers to the illegal practice of repeatedly clicking an ad published on a website with the intention of increasing revenue through a pay-per-click (PPC) compensation method. The “fake clicks” can be done manually or by using automated software designed to click banner ads or text links. The traffic from these fraudulent clicks is not really interested in the products or services being sold by the merchant. The merchant loses money by paying for clicks that do not actually translate to sales.

CLICK-THROUGH

Also spelled as “Click Thru”, this relates to the act of clicking an advertisement link which could be an image or text that will connect you to the merchant’s website.  Content from different pages or types of promotion will give a different click-through rate.  As an example The Lottery Office Review type content will give a high click-through rate as compared to a generic page about the lottery. 

CLICK-THROUGH RATE (CTR)

Refers to the percentage of people viewing a webpage by clicking an advertisement link. It is calculated by taking the number of clicks received by an affiliate link divided by the number of times the link was displayed (referred to as “impressions”). Multiply the result by 100 to find your actual CTR percentage. For example, if your ad is being displayed 100 times and clicked only once, converting to figures it would be: 1/100 = .01,  multiply the result by 100: .01 x 100, your CTR is 1%.

CLOAKING

Cloaking is the process of making an affiliate link shorter and hiding the tracking code to make it less visible to potential commission thieves. Though the process does not go with the guidelines of popular search engines like Google, cloaking has become an acceptable and widely used practice in affiliate marketing to counter affiliate commission theft. 

CONTEXTUAL LINK

Any clickable text placed within the body of content on a blog or website. This type of link is quite different from the traditional ad links that are purposely placed in the sidebar of a webpage. Contextual links serve as keywords for a particular content, which can help boost search rankings.  As an example Australian Affiliate Program could be used as a contextual link for The Lottery Office Affiliate Program

CO-BRANDING

This is a marketing strategy used by merchants whereby they create a custom landing page that allows affiliates to send referrals. The landing page contains the merchant’s branding as well as the logo or name of the affiliate sending referrals. For example, a merchant might make a landing page on its website which also shows the specific affiliate’s branding information.  This strategy can be beneficial for both the merchant and the affiliate as it strengthens their relationship and can increase conversion rates. Most of the time, co-branding opportunities are only offered to Super Affiliates.

COMMISSION

When an affiliate achieves a predefined positive outcome for the merchant, the affiliate is paid a “commission” or fee by the merchant. Commissions are mainly performance-based – the more traffic and sales generated the more revenue the affiliate earns.

CONVERSION

Getting a recipient of your marketing message to complete your intended goal. In affiliate marketing, conversion comes in many forms – it could be: clicking an ad link, going to a landing page, email signup, filling out a form, or actually buying a product or service.

CONVERSION RATE

This refers to the percentage of visitors to a particular website who actually take a desired action or conversion. This is calculated by taking the number of sales generated by the link divided by the number of website views, multiplied by 100. For example, your ad link received 100 views and resulted in 2 sales – applying the formula, you’ll have (2 sales/100 impressions) x 100 – your conversion rate is 2%.

COOKIES

Cookies are data stored in a user’s browser during website visits. They are used for different reasons on the internet, but in affiliate marketing, they are used primarily for tracking purposes. An affiliate link used by affiliates in promoting/publishing products on their website contains a unique tracking ID. When a web visitor clicks on that link, the tracking ID is stored on the user’s browser in a text file (referred to as a “cookie”) within a predefined period before it is manually cleared. If that user comes back to the website within the predefined period and completes a desired action, the conversion will be credited to the original affiliate ID. For example, if someone clicks on your affiliate link, the cookie is automatically saved on his/her browser. If the user revisits the website before the cookie expires (regardless of whether he/she clicks on your affiliate link again) and makes a purchase, the sale will be credited to you and you will be paid commission for that sale.

COOKIE EXPIRATION

In affiliate marketing, cookie expiration refers to the amount of time an affiliate link must generate a conversion. Affiliate managers usually set the cookie duration at between 30-90 days. Let’s say the user makes a purchase within the 90-day period, the sale will still be credited to the original affiliate ID. However, beyond that duration, and even if the user ends up buying a product, the owner of the affiliate ID will not be paid for the sale. A cookie expiration is considered low or short if it is less than 30 days, while it is considered above average if it extends beyond 90 days.

COOKIE STUFFING

There are instances when a user visits a particular website and cookies from other merchants are deposited into the user’s computer even if he/she has not even visited the merchants or the affiliate’s website. In most cases, the user is completely unaware of the process. Cookie stuffing is a technique adopted by some affiliates to increase their revenue. Cookies are dropped onto as many computers as possible, and in the event that the users visit the merchant’s website and buy a product, the sale will then be credited to the affiliate. This practice is more likely to occur in bigger merchants with a broader reach. Legitimate affiliates discourage cookie stuffing and most merchants avoid affiliates who use the cookie stuffing strategy.

CPA

Cost Per Action or Cost Per Acquisition, this relates to the amount of money paid to affiliates or publishers for generating a desired outcome such as an email signup or a sale.

CPC

Cost Per Click is another advertising model used to drive traffic to a merchant’s website. Affiliates are being paid for every click received by their affiliate links. CPC can be obtained by taking the number of clicks generated divided by the ad campaign cost. For example, if your ad campaign cost you $200 and the campaign received 100 clicks: 100/200 = .50 (your CPC is .50 cents).

CPM

Cost Per Thousand refers to the amount of money a merchant pays for every 1000 impressions. For example, if a publisher’s rate is $6 CPM, and a merchant wants to show an ad 10,000 times (impressions/1000 x CPM: 10,000/1000 x 6 = $60), the merchant will have to pay a $60 advertising fee.

CREATIVE

Creative is a type of marketing material, usually a pre-made text link or image/graphical ad, given to affiliates so they could easily promote a merchant’s website and products/services.

CUSTOMER BOUNTY

When affiliates generate leads or sales for the merchant, they are being paid a predefined fee called “bounty”. This is also called “commission”.

DATAFEED

Merchants organize product details through a “datafeed”. Product descriptions, images, prices, as well as affiliate links are listed in a file so publishers can better promote the products. Datafeeds are commonly used in setting up online stores that feature affiliate products.

DISCLOSURE

Affiliate marketers are required to publish a notice on their website stating their involvement in affiliate marketing whereby they are getting paid by a merchant for product endorsements, purchasing recommendations and any other marketing efforts they make. FTC laws make it mandatory to have a proper disclosure policy in order to uphold the credibility of the affiliate marketing business. 

E-MAIL LINK

An e-mail link is an affiliate link purposely made for email marketing.

EPC

Earnings Per Click – this is the average revenue you earn every time your affiliate link is clicked. To calculate your EPC, take the total amount of commissions you’ve earned through your affiliate link divided by the total number of clicks received by that link. For example, if your affiliate link was clicked on 12,000 times during the entire duration of your affiliate relationship, and the same link generated a total of $4000 in sales, applying the formula, 4000/12,000 = 0.33, this means that for every click on your affiliate link, you get paid an average of 33 cents.

FIRST CLICK

In this affiliate program, a sale generated within the cookie expiration limits will be credited to the affiliate link who received the first click. This means that even if the same user visited a second affiliate website and actually made a purchase through that second affiliate link, the commission will still go to the first affiliate. First click and last click have long been the subject of debate in affiliate marketing as marketers argue which of the two provides more benefits to both the merchant and the affiliate.

IMPRESSION

An impression refers to the number of times a promotional material is shown on a webpage. One impression is counted for every time the ad is displayed.

IN-HOUSE

When a merchant runs its own affiliate program without the need for an affiliate network, the merchant is said to be operating the program “in-house”. This is done through the use of affiliate software, which can be developed in house or provided by a software company that specializes in affiliate tracking software.

INDIE PROGRAM

Independent affiliate programs (indie programs) are programs that are being run by the merchant in-house. These programs run through an affiliate software and the merchants handle the program themselves without paying for an affiliate network to do the job.

JOINT VENTURE (JV)

This refers to a business relationship built for one project, product or event where two entrepreneurs work hand in hand in creating a single product and then promote it simultaneously as a joint effort.

LAST CLICK

As opposed to the “first click” program, last click gives the credit to the last affiliate who receives a click and eventually generates a sale, even if there is still a valid cookie stored on the user’s browser coming from a prior click on another affiliate link. People involved in affiliate marketing are still debating whether first click or last click gives the most advantage to both the merchant and the affiliate.

MANUAL APPROVAL

This is one way for merchants to determine whether or not to approve an affiliate application. Contrary to automatic approval, manual approval enables the affiliate manager or merchant to evaluate each affiliate application and then decide who should enter the program.

MASTER AFFILIATE NETWORK

A master affiliate network works by finding as many affiliate programs it can find and then sign up with them. The network then looks for sub-affiliates to use its link. This is done by placing a JavaScript code on the affiliate’s website. The network then gets a share of the commission generated – the cut is usually about 25%. VigLink and SkimLinks are the top master affiliate networks.

MERCHANT

This refers to the company that owns and produces the products or services promoted by an affiliate. They are sometimes called “advertisers”. They pay commission to affiliates whenever they generate leads or sales.

NICHE

Niche is a specific area in marketing which focuses on a particular product or topic. It concentrates on a smaller customer target where these customers are willing to spend money on a particular area of interest. For instance, if your website talks a lot about dogs, then dogs would be your niche. If you want to broaden the market, then you would target pets. 

OPM

Stands for Outsourced Program Manager and is also known as “Affiliate Manager”. This individual manages an affiliate program and handles affiliate transactions.

OPT-IN RATE

Refers to the proportion of website visitors who sign up to your mailing list. Let’s say 100 people were presented with the opportunity to sign up to your email list and 1 person subscribes – your opt-in rate would be 1%. 

PPS

Pay Per Sale. Another type of affiliate program whereby the affiliate receives a commission whenever he/she generates an actual sale.

PPL

In this type of affiliate program, a merchant pays an affiliate a commission for every lead generated. A lead comes in various forms – it could be a requested quote, a form filled out or anything involving contact information indicated by the merchant as a commissionable lead. In this type of agreement, an affiliate only gets paid if a visitor signs up to the merchant’s website.

PPC

In this advertising model, the affiliate earns a commission for every click received by his/her affiliate link, regardless of whether or not it ended up as a sale or lead for the merchant. Google Adwords is associated with this type of affiliate program.

PAYMENT THRESHOLD

This refers to the minimum accumulated commission an affiliate should earn before he/she receives payment from the merchant. In some instances, the merchants themselves set a specific payment threshold to ease accounting costs. In other cases it is the affiliate who sets a payment threshold – this way, the affiliate will get one large check instead of getting paid frequent smaller ones.

POD

Stands for Point of Difference. This refers to a website’s advantage or edge over the competitors with a similar niche. The point of difference could be a unique service, engaging high-quality content or a different product which make a website stand out among the rest.

PRIVACY POLICY

When your website receives personal information from visitors, such as their contact details, or if the information is received through tracking methods, you are required to have a privacy policy outlining what will happen to their personal data. Merchants usually ask affiliate applicants to have their own privacy policy before they are allowed to take part in their affiliate program. Publishers’ websites should also use Google Analytics and Google AdSense.

PLR

Private Label Rights. This denotes content that you can acquire or buy from the original owners, promote it using your own brand and claim ownership of the material. You can also modify it if you want to.

RAW CLICKS

In affiliate marketing, raw clicks let you see every click that occurs on your affiliate link, even if the clicks come from the same user many times a day. They are shown in conjunction with Unique Clicks whereby affiliates can compare the number of clicks coming from the same path and the overall clicks made by individual users.

RECURRING COMMISSIONS

Offered by “Services”. Some affiliate programs offer recurring commissions wherein affiliates are repeatedly paid a commission. The affiliate receives payment on the initial sign up and continues to be paid for as long as the customer continues to pay for a product or service. One example for this is when an affiliate makes a referral to a hosting service. Once the visitor signs up, the affiliate is paid a commission and every month, as the customer pays the bill, the affiliate also receives a predefined commission.

RESIDUAL EARNINGS

Also called “lifetime commissions”, residual earnings are payments you receive on a regular basis. You get paid indefinitely for the lifetime sales for every new referral you make, as opposed to only receiving payment during the initial purchase made by the new customer.

ROAS

Return on Advertising Spending, also referred to as Return on Ad Spend and ROI. ROAS refers to the total revenue earned through a particular advertising campaign. To calculate ROAS, you take the total income divided by the ad spend and then multiply the result by 100. ROAS is in percentage form. For example, if your ad campaign cost you $200 and your gross profit stands at $600, applying the formula you have 600/200 = 3, multiply by 100, 3 x 100 = 300. Your ROAS in this example is 300%. The amount that exceeds 100% would be your profit – this means that your campaign earned you a 200% profit.

ROI

Stands for Return on Investment. If you want to know whether your advertising campaign is a success or a failure, you might want to calculate your ROI. You can find ROI using the same formula as ROAS. But there is an alternative way of calculating it. Take the gross profit, subtract it by the total campaign cost, divide the result by the cost of the campaign and then multiply by 100. Let’s say the total cost of your ad campaign is $200 and your gross profit is $600: 600 – 200 = 400; 400/200 = 2; 2 x 100 = 200. Your ROI is 200%.

SEO

Stands for Search Engine Optimization. This refers to the practice of ensuring that your website will be ranked higher on the list of search results returned by any search engine. This is to drive more visitors to your website.

SID TRACKING

Also known as MID tracking, CID tracking and TID tracking. SID is a sub campaign tracking method which consists of an alphanumeric code that affiliates use to monitor the success of a particular marketing effort. CJ Affiliates (formerly Commission Junction) supports sub campaign tracking like SID which is being referred to differently by every affiliate network.

SPLIT TESTING

Also known as A/B testing. If you want to figure out what content version works best for your website, you may conduct split testing which involves a randomized experiment of comparing two content versions – content could either be an advertisement or a sales copy. Split testing helps improve a website’s conversion rate.

SQUEEZE PAGE

The landing page or squeeze page is designed to remove any distractions for one desired goal and that is to get the email address of each visitor. Affiliate marketers use the squeeze page to convince visitors to provide their email address by offering them freebies.  

SUPER AFFILIATES

These are the top affiliates whose combined generated sales make up more than 80% of the affiliate program’s total sales. Super affiliates usually comprise the top 5% of the program. The term traditionally applied to affiliates who earn more than $10,000 monthly.

TRACKING METHOD

This refers to the type of tracking a merchant adopts to monitor affiliate activity, leads and sales.

TEXT LINK

A text link is created by embedding a link in words or phrases within the body of the content. This differs from banner ads which make use of an image or computer graphics to link to a particular webpage.

TRACKING CODE

Refers to affiliate tracking. The code contains a unique ID attached to an affiliate link which enables an affiliate to track sales generated or referrals made to the merchant. This is how a tracking code should look:
merchant.com/?ID=YOURUNIQUEID

TOS

Terms of Service. In affiliate marketing, this refers to an affiliate program’s terms of use which outline the rules and guidelines of the program, as well as the dos and don’ts. In some instances, affiliates are not allowed to bid on the merchant’s brand keywords. If they do so, they will be kicked out from the program.

TURNKEY WEBSITES / DFY

Also referred to as “Done For You”. These are pre-built websites that are ready to run, complete with relevant items such as a domain name, shopping cart system, scripts and web hosting. Turnkey websites are completely functional and are made available for sale to affiliate marketers. 

TWO-TIER (2-TIER)

This program enables affiliates and marketers to not only receive commissions from their own sales but also earn for every referral made or new recruit brought in to the program. The affiliate on the first tier receives a small share of the commissions earned by new recruits. Affiliates can recruit new members directly if they directly knew them, or they can do it indirectly, meaning they get someone to sign up to the program using their affiliate link.

UNIQUE CLICKS

This is a term that is used to refer to the actual number of clicks from individual users. Unique clicks run in conjunction with raw clicks (total number of clicks received by a link, including repeated clicks from the same user). If one person clicks your affiliate link on their home computer 3 times, then 1 of those would be counted as a unique click. After 24 hours, the unique click resets. So if the same person visits your website after 6 days and again clicks on your link, then you would now have a record of 2 unique clicks and 4 raw clicks.

WHITE-LABEL

White-labeling enables affiliates to market a merchant’s product under their own brand. Prospective customers would assume that the products being sold are actually owned by the affiliate since the actual merchant is not mentioned on the website. The white-labeling process occurs when a merchant creates a website designed solely for the affiliate under the merchant’s server and control. The affiliates are then allowed to make it appear as if it is their website’s subdomain. Merchants most likely offer white-labeling to super affiliates.

WSO

Warrior Special Offer. This is a deal exclusively available on Warrior Forum – a digital marketing forum site. Members promote content by making special offers which are then listed under the WSO board. This type of marketing strategy is still being debated online, so be careful.

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