Starting out in a new industry or field can be daunting. Affiliate marketing is no different. You feel like there is so much to learn, so much to achieve, but the worst part? It seems like there is a whole new language to learn!
The affiliate marketing industry has its own lingo, and for a newbie, just understanding this new code language is a big task. To welcome you to the affiliate marketing community, I have created a lingo guide for you. I hope that you'll feel a little more familiar with the strange words after you've gone through it.
This is the section of the website that a viewer can see on their browser without having to scroll down.
When you start a new affiliate relationship, you will receive one of these from the merchant. This agreement outlines the rules, expectations, responsibilities and other legalities on both sides of the relationship.
This is the URL link that will be provided to you by your merchant. It is a unique link that will identify you as the affiliate when sending traffic to the merchant’s website. Without this link it won’t be possible to track the traffic and/or the sales generated by your affiliate marketing efforts.
There are several third-party networks that help merchants manage their affiliate program on their behalf. Affiliate networks are responsible for recruiting appropriate affiliates. They provide the back-end technology for tracking conversions and reporting on performance. They also ensure that affiliate commissions are paid out on time.
Affiliate networks are helpful for exposing merchants to a wider network of potential affiliates. Some popular affiliate networks include ClickBank, Commission Junction and Amazon Associates.
When a merchant offers a program that allows individuals (i.e. affiliates) to refer people to their products and/or services, it is known as an affiliate program. In return for referrals, the affiliate is paid a predetermined commission.
Affiliate programs are also known as associate, partner, referral or revenue-sharing programs. Here's some help on how to choose the right affiliate program.
Sometimes a customer you have referred will make a purchase, then decide to cancel (for example, the product was returned). As the final sale didn’t actually go through, the merchant will deduct the commission from the sale and the affiliate will not receive any payment for it. This is a charge back.
For affiliate programs that operate based on lead generation, this can also occur if the merchant decides the leads sent were fraudulent.
Affiliate programs that compensate based on the pay-per-click model can sometimes fall victim to click fraud. This happens when fake clicks are generated (manually or automatically). These clicks will never result in conversions as the traffic has no real interest in the merchant’s product/service.
The money received by an affiliate in exchange for providing referrals to a merchant’s site is known as commission. This is usually a predefined amount and is based on the desired outcome (i.e. leads, registrations, sales etc.).
When you refer a user to a merchant site and they successfully complete the desired action (e.g. sign up for the merchant’s website or make a purchase), it is known as a conversion. Conversions will differ depending on the desired outcome for each individual merchant.
Cookies are not exclusive to affiliate marketing and are used around the web. For example, if you were visiting a site like Facebook, Facebook would insert a text file into your web browser to track certain activities anonymously.
In affiliate marketing, cookies are widely used to assign an ID to the user in order to track the conversion as coming from you, the affiliate. Cookies are valid for a certain period of time, so if the user comes back later to complete a conversion, it will still be attributed to you.
For example, a user reads a book review on your site and is then sent to Amazon to make the purchase. They read the Amazon reviews and look at the price but don’t immediately make the purchase. At this point, Amazon has already inserted a cookie for this particular user. A few days later, the user decides to make the purchase and searches for the book on Amazon to buy it. They don't use your affiliate link this time, but thanks to the cookie, the sale is still attributed to you.
Cookies all come with expiration dates. Standard cookie lengths are 30–90 days; however, you will find some that are less. If a user makes a purchase within the cookie expiration/ retention period, the conversion will still be attributed to you, the affiliate.
A sneaky practice that often gets individuals banned from Amazon’s affiliate program. Cookie stuffing is done by sneakily inserting cookies from a merchant’s site onto a user’s computer, even if the user has never actually visited the merchant’s site.
The intention here is that the user will eventually come to the merchant’s site to make a purchase and the sale will be attributed to the affiliate. It is underhanded because the user has never clicked on the affiliate link, yet the sale is still attributed to the affiliate.
Stands for Cost Per Action/Acquisition. It refers to the model where the merchant pays for each qualifying action that a user takes after they have seen an affiliate advertisement. Common actions include completed sales or signups.
CPA is also known as Cost Per Order (CPO) or Cost Per Sale (CPS), where the merchant pays out for each qualifying order or sale.
Stands for Cost Per Click. It is the cost of each individual click on an online ad.
Stands for Cost Per Lead. A payment model where the merchant pays for each qualified lead that an affiliate refers to their site. Leads can include email addresses, completed registrations or even a fully filled-out online survey.
Stands for Click Through Rate/Ratio. This is a metric usually used in direct-response advertising and reflects the percentage of site visitors who have clicked on a particular link.
Say a user clicks on your affiliate link first, then goes to the merchant’s website but doesn’t immediately make the purchase. A week later, the user clicks on another affiliate’s link and ends up on the same merchant’s website. She makes a purchase this time.
This particular merchant attributes the sale to you as the user made the purchase within the cookie expiration period. The first click came via your affiliate link, so the conversion is attributed to you.
The opposite of first click is last-click attribution. The last affiliate to get a user to convert receives the commission in this case. Their link was the last link the user clicked on, so the merchant attributes the sale to this affiliate.
Many merchants will require affiliates to accrue a certain amount of earnings before they receive pay out of their commission.
Stands for Pay Per Click. A payment model where the merchant pays for each click on an affiliate advertisement.
There are some popular affiliate networks that operate on the PPC model.
Stands for Return On Advertising Spend. It's a metric used to determine the revenue generated per dollar spent on advertising.
Stands for Return On Investment. In the financial world, the definition can get complicated, but in eCommerce and affiliate marketing it is simplified. It is calculated by evaluating the money earned (or lost) against the money invested (business setup expenses, advertising costs etc.).
The top affiliates in any affiliate program are known as the Super Affiliates. Combined, they usually generate about 80% of the sales for the program.
Some merchants will allow affiliates to sell their products/services under their own brand. The affiliates make no mention of the merchant and visitors usually believe it is the affiliate selling the product/service. This is known as white labeling.
This is often seen in online dating where dating affiliates will sometimes set up a unique white-labeled site for users to join. However, the users are actually signing up for, and being added to, the original merchant’s database.
I hope you find this list useful. If affiliate marketing is still too overwhelming for you and you're not sure how/where to get started, be sure to check out AffiloBlueprint. It is the easiest step-by-step system for making money online as an affiliate.
Did I miss any? If you’ve come across a term in the affiliate marketing world and are not quite sure what it means, drop me a line and I’ll try to translate it into normal-speak for you!
Great article I've been guessing at the meaning of some of these abbreviations, you where right on time thanks. I'm looking to get back started up very soon.
I need some guidance towards becoming an affiliate of Amazon.
If you have specific questions, I suggest you head over to the Affilorama member forums. Our staff there, as well as other users who are already using Amazon, will be able to help you.