The language of Affiliate Marketing

Every specific industry has its own language, a set of words and expressions that is unique to it. This may sound like gibberish to an uninitiated person. In this article I would like to reveal the meaning of terms and abbreviations that are typical to the affiliate marketing industry.

It’s very important to read and understand the terms and conditions of new services you are considering to make sure that they are the right programs for you.

Terms, abbreviations and their meanings:

AFFILIATE: A person who earns money when he sends sales or leads to a merchant who sells goods and services on the web.

AFFILIATE AGREEMENT: A legally binding document in which affiliate agrees to the terms and conditions the merchant requires.

AFFILIATE LINK (also REFERRAL LINK, REFERRAL PROGRAM): A link that you will promote. It identifies you as the affiliate who has to be credited for the sale or the click.

AFFILIATE PROGRAM (also REFERRAL PROGRAM, ASSOSIATE PROGRAM, REVENUE SHARING PROGRAM): A program that allows other individuals to market a company’s products or services for a commission fee per item sold.

AFFILIATE PROGRAM DIRECTORY: A directory that describes and sorts various affiliate programs.

AFFILIATE SOLUTION PROVIDER: A third party firm that provides software and services to run an affiliate programs.

ASSOSIATE: Another word for affiliate.

BANNER AD: An image that displays an online advertisement on your website and linked with your affiliate link.

CHARGE BACK: Basically means that you lose a sale and return a product that results in loss of affiliate commission.

CLICK-THROUGH: It is when a prospect takes an action and clicks on a link.

CTR (CLICK-THROUGH RATE): The percentage of those clicking on the link out of the total number who sees the link.

CLICK-THROUGH RATIO: See Click-Through Rate

CO-BRANDING: Your company name or logo is placed on a reseller’s website, or on the product itself.

COMMISSION: Income you are paid for making affiliate sales.

COOKIES: A piece of code that is written to your prospect’s computer after clicking on an affiliate link. Cookies are simply there to make sure that you get a credit for the sale if your prospect some back later to make a purchase.

CONTEXTUAL LINK: A link that looks like more content than an advertisement because it’s usually part of an article.

CONVERSION RATE: Percentage of clicks that results in sales or leads.

CPC (COST PER CLICK): Cost of each click on a PPC (Pay Per Click) advertising link.

CPM (COST PER THOUSAND): The amount of money you pay for one thousand banner ad impressions on someone else’s site.

IMPRESSION: An instance of your advertising link being displayed in a browser.

LIFETIME COMMISSION: With a lifetime commission program, your affiliate ID will be permanently “attached” to your customers, so you will make commissions on all your customers’ future purchases.

PPS (PAY-PER-SALE): A program, where you receive a commission for each sale of a product or service via your affiliate link.

PAY-PER-LEAD: A program, where you receive a commission for each “qualified” lead generated through your affiliate link. The prospect must take some sort of action while at the merchant’s site, such as filling out an application, subscribing to an ezine or offer list, entering a sweepstakes, requesting a free sample, or downloading software or PDFs.

PAY-PER-CLICK: A program, where you receive a commission for each click to a merchant's web site.

RESIDUAL INCOME: A program that pays commissions on recurring payments. These are usually memberships, subscriptions, or monthly fees for services such as web hosting.

ROI (RETURN ON INVESTMENT): A method for measuring actual profit from a given sales campaign.

SUB-AFFILIATE: Affiliates you have referred to a Two-Tier Affiliate Program. (See also Two-Tier.)

SUPER AFFILIATES: Refers to anyone who makes a good living from affiliate programs.

TEXT LINK: A link that displayed as text only, without an image overlying it (such as a banner).

TWO-TIER: Affiliate payment model in which you can refer other affiliates and receive a small additional commission on their sales. You are the first tier; your sub-affiliates are the second tier.
 
VIRAL MARKETING: A campaign that uses word-of-mouth or “tell a friend” mechanisms.