Saturday, January 08, 2005

An Affiliate Dictionary - Common Web Marketing Terms & Their Definitions

Affiliate Programs :: Affiliate Marketing Terms and Definitions

When I first got involved with affiliate marketing, I was baffled by the number of new terms and acronyms in the industry. The jargon was overwhelming, but my boss, who had a lot more experience with affiliations and revenue share programs, was patient enough to define terms for me as they came up. Now I'm passing on some of those definitions to you. Enjoy.

  • Above the fold - Originally a newspaper term, being above the fold means that the ad or text is visible without having to scroll down the page. (The bottom of the screen is the fold.)
  • Affiliate - A website publisher who promotes a product in exchange for some type of pay for performance model.
  • Affiliate agreement - A contract between a merchant and an affiliate that outlines the terms of the arrangement, including the compensation arrangement.
  • Affiliate arbitrage - Buying advertising through one model and sending it to an affiliate program with a different compensation model, and profiting from the difference. An example would be buying clicks for a nickel each, and sending them to an affiliate program that pays $17 per action. If 1 person in 100 takes the $17 action, the profit from the arbitrage would be $17 - $5, or $12 per 100 clicks.
  • Afiliate link - Usually a unique URL that an affiliate links to. The unique URL tracks the traffic and the sale so that the affiliate gets paid for the customer.
  • Affiliate manager - Sometimes the person who runs the affiliate program for the merchant, but also sometimes your account representative if the merchant has a large affiliate department.
  • Affiliate program - An advertising program that pays website publishers on a performance basis.
  • Associate - Synonym for "affiliate".
  • Associate program - Synonym for "affiliate program".
  • Autoresponder - An email address that sends an automated response to the person who emails it.
  • Banner - A graphic advertisement on a website.
  • CPC - Cost per click. An advertising model that is most often used by search engines, but is also sometimes used by merchants running affiliate programs. Buying traffic on a cost per click basis is a typical tactic used in affiliate arbitrage.
  • CPM - Cost per 1000 impressions. Based on television advertising, this advertising model pays based on how many people view the ad, or how many times the ad is displayed. Unusual in an affiliate arrangement, but common in terms of buying advertising.
  • CTR - Click through ratio. A ratio of the number of clicks generated by an ad divided by the number of impressions the ad has seen. Usually expressed as a percentage.
  • Chargeback - A chargeback occures when an affiliate has received a commision on a sale, but the sale falls through because of fraud or refund issues.
  • Clicks per sale - One way to measure the performance of an affiliate program.
  • Co-branding - Displaying the affiliate's logo along with the merchant's logo, which strengthens the brand of the affiliate website.
  • Commission - A percentage of the sell price of an item. A very common affiliate payment model.
  • Commission structure - The amount of commission a merchant pays its affiliates.
  • Compensation plan - The agreement that outlines how much an affiliate gets paid.
  • Conversion rate - The percentage of visitors who buy, or take a specified action, like filling out a request for additional information.
  • Cookie - A code stored on your computer by a web server when you visit a site. Cookies help affiliate programs track commission for their affiliates.
  • Doorway page - A page which has been specifically designed to do well in the search engines for a search term, which usually leads to the actual website or advertiser.
  • Downline - A multi-level marketing term for the people who are sub-affiliates of an affiliate.
  • EPC - A Commission Junction term that stands for earnings per 100 clicks.
  • Ezine - An email newsletter, often used to serve affiliate advertising.
  • FAQ - Frequently asked questions. A popular web page theme.
  • Hit - A visit to a website.
  • Hybrid model - A combination of two different payment types. A hybrid model might pay a dollar amount per lead plus an additional dollar amount for a certain amount of traffic delivered.
  • Impression - A display of an ad.
  • Lifetime commissions - A commission arrangement that pays on additional purchases from a customer. (Once a customer buys something from the merchant, they become your customer forever, and you continue to receive commission payments on any of that customer's subsequent purchases.)
  • Link popularity - One of the main methods most search engines currently use to rank sites. The idea is that if a lot of websites are linking to your site, it must be important, which will make it relevant.
  • MLM - Multi level marketing. An arrangement where a salesperson or organization makes commisions not only on their own sales, but also on the sales of anyone they recruit.
  • Merchant - The advertiser who pays the affilaite.
  • Multi level marketing - See "MLM".
  • Opt-in - Agreeing to receive regular email communication from a website owner.
  • Opt-out - Asking to no longer receive email communications from a website owner.
  • Pay per click - An advertising model used largely by search engines, where the advertiser pays an agreed upon amount every time a surfer clicks on his listing. Usually, the more the advertiser is willing to pay per click, the higher they rank in the search results.
  • Pay per click arbitrage - See "affiliate arbitrage".
  • Pay per impression - An advertising model which pays based on the number of times an ad is displayed.
  • Pay per lead - A payment arrangement where the merchant pays a dollar amount for every lead they receive. Usually these leads are generated when a potential customer fills out a request for more information.
  • Pay per sale - A payment arrangement where the merchant pays a flat dollar amount per each sale made.
  • Private label - An affiliate program where the merchant displays the affiliate's logo and branding on the destination site. This allows the affiliate to build their own brand and use the merchant as their back-end supplier.
  • ROI - Return on investment. If you invest $100 on clicks and hosting, and you make $110, your profit is $10. $10 is 10% of your $100 investment, so your ROI is 10%.
  • Recurring commissions - See "lifetime commissions".
  • Spam - Email that wasn't opted in to.
  • Sub-affiliate - An affiliate who signs up using another affiliate's link to the program. The referring affiliate usually receives a percentage of his sub-affiliates' sales.
  • Super affiliate - The 1% of affiliates who generate most of the income in the affiliate marketing industry. Super affiliates generally command a better compensation structure than a standard affiliate.
  • Targeted traffic - Traffic to a website that is actually looking for information that is presented there.
  • Text link - A non-graphic link. CTR's on text links are generally much higher than CTR's on banner advertising.
  • Tracking - How the merchant keeps up with the number of sales/clicks/impressions etc. that the affiliate generates.
  • Traffic - Visitors to a website.
  • Two-tier program - An affiliate program that pays commissions on sub-affiliate sales.
  • Unique clicks - A visitor to a website. If one person clicks on an ad multiple times, or visits a site multiple times, he or she is still only one unique visitor, even though the site has recorded multiple visits.
  • Unique hit - See "unique clicks".
  • Unique visitors - See "unique clicks".
  • Viral marketing - Marketing that replicates itself, like a clever email, or a funny game that people forward to each other via email.
  • White label - See "private label".


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