When you first enter into the world of affiliate marketing, many of the common terms may be unfamiliar to you. So before you get involved, start joining forums and start asking questions, get a basic understanding of the industry lingo. Here are the top 20 affiliate marketing terms explained.
Advertiser – The person who owns a product, also called a merchant. They pay people for sending traffic to their website when a sale or referral is made.
Affiliate – A person who promotes other people's products through a website and earns commission on the sales or referrals of the product.
Affiliate Network - A third party company that acts as aggregator between affiliates and merchants (i.e.; Commission Junction, Linkshare, Digital River ...).
Click Fraud – This is the process of artificially generating clicks on links to appear that a merchant's website is getting more traffic. This can be done with a program or manually. This can be seen when programs are set up as pay per click programs and the affiliate receives a percentage of money from the clicks.
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Click-thru – When a person clicks on a link and follows through to the links website.
Commission – The amount that an affiliate is made for leading a person to make a sale, a lead or click-through to the merchant's website.
Conversion – When a click from an affiliate's link leads to an actual sale for the merchant.
Cookies – Small, temporary stored on a visitor's computer when they view a website. When it comes to affiliate marketing, cookies are used to determine which affiliate member is responsible for a person's sale. They also store the date and time as some programs only allow for a certain time period between a click-through and an actual sale.
CPC (Cost Per Click) – The actual cost of one click when paying pay a click by click basis.
Exclusivity – When a merchant claims exclusivity from affiliates this means that an affiliate can't promote competing products on the same sight as their product.
Google Adwords – Google's pay per click (PPC) advertising program that some affiliates use to generate more traffic. Yahoo, MSN and many other smaller search engines have similar programs.
Payment Threshold – The minimum amount that an affiliate must accumulate in commissions to reach a payment from the merchant.
PPC (Pay Per Click) – The pay that is received for getting one click to a merchant's website. This is not commonly used to pay affiliates but is most common for buying advertising space for affiliate marketing through ad directories.
PPS (Pay Per Sale)- Program in which an affiliate receives a commission from every sale that they generate for a merchant.
Recurring Commissions – An affiliate is rewarded on a recurring basis whenever the merchants charge buyers a recurring fee. An example of this would be an affiliate program for a membership site that charges a monthly fee to participate in. Each month the affiliate would get a commission if their buyer keeps paying that fee.
ROI (Return on Investment) – This is one of the most important things that a marketer wants to see when it comes to advertising. This compares how much money has been invested in the advertising to how much money or traffic is being generated.
Super Affiliates – This is any affiliate marketers dream is to be a super affiliate. These are the highest performing affiliates and only account for about 1% of the affiliates. Most of the time the 1% are the ones bringing in 90% of the sales.
Tracking Method – The way that an affiliate program is tracks the sales, leads, or clicks. Most of the time this is done by a unique id or name that is embedded in an url, but can also be done with cookies as well.
Two Tier Affiliate Marketing – This is a specific model that allows affiliates to sign up additional affiliates below them and get a percentage of their commission as well. This is also known as multi-level marketing (MLM).
Unique Click – This is when only unique clicks are tracked so that only one per web visitor is recorded. This is usually done using the IP address.
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