Affiliate Marketing Terminology

Affiliate marketing: affiliate marketing is a process of earning a commission by promoting other people's products or services. You find a product you like, promote it to others, and earn a piece of the profit for each sale that you make.

Affiliate Program: Affiliate Program can also be called an Associate Program, Partner, Referral or Revenue sharing program. In such a program the merchant rewards the affiliate for web traffic, sales or leads on a pay-per-click, pay-per-sale, or pay-per-lead basis.

affiliate – the publisher/salesperson in an affiliate marketing relationship.

Advertiser: The person selling the goods or service; also knows as the merchant. The advertiser or merchant pays affiliates for sending traffic to the merchant's web site after a product or service is purchased.

The merchant: The merchant could be the product creator, seller, or brand. You can also refer to the affiliate as the publisher or advertiser. The affiliate will promote their selected industry’s products in an attempt to convert and sell to as many customers as they can. In your case of your affiliate marketing you will be PUBLISHER because you 'll be publish and prompt your affiliate products.

The Consumer: The customer or consumer is who drives affiliate marketing. They are the only thing that keeps any business going. Without consumers and traffic to drive sales, you aren’t getting any commissions. And no commissions means no business. Simply: the customer is the lifeblood of your business, even in affiliate marketing.

Affiliate manager: A person responsible for managing an online affiliate program for an affiliate merchant.

Affiliate Agreement: terms between a merchant and an affiliate that govern the relationship. This includes the terms on which the affiliate will be rewarded for the traffic sent to the merchant's web site.

Affiliate Link: A unique linking code. It enables the advertiser and/or the network to track any activity. This code is embedded in a text or graphic link which in turn identifies a visitor as hailing from a specific affiliate website when the graphic or text is clicked on.

Affiliate Network: a value-added intermediary providing services, including aggregation, for affiliate merchants and affiliates.

Affiliate merchant: the advertiser in an affiliate marketing relationship.

Affiliate software: software that, at a minimum, provides tracking and reporting of commission-triggering actions (sales, registrations, or clicks) from affiliate links.

Affiliate Information Page: A page on your web site that explains the terms of your affiliate program including your commission rates, affiliate agreement, a link for existing affiliates to login, as well as a link to the signup page for new affiliates.

Affiliate Program Directory: A comprehensive listing of merchants' affiliate programs. The directories are typically categorized by industry and include the typical payout or commission rates. Click here for a sample list of affiliate program directories.

Exclusivity: contract term in which one party grants another party sole rights with regard to a particular business function.

Affiliate Tracking: The process of tracking a link uniquely by affiliate using an Affiliate Link.

payment threshold – the minimum accumulated commission an affiliate must earn to trigger payment from an affiliate program.

Click-through: The action when a user clicks on a link and follows through to the merchant's web site.

Click-Through Ratio (CTR): percentage of visitors who click-through on a link to visit the merchant's web site.

Conversion Rate: Percentage of clicks that result in a commission-able activity (sale or lead).

CPA (Cost Per Action): The amount of cost for a conversion such as a sale or lead.

CPC (Cost Per Click): Cost of an individual click when paying on a per click basis.

CPM (Cost Per Thousand): The cost of 1000 banner impressions.

CPO (Cost Per Order): Same as CPA but refers specifically to sales.

Payment threshold: the minimum accumulated commission an affiliate must earn to trigger payment from an affiliate program.

Return days: the number of days an affiliate can earn commission on a conversion (sale or lead) by a referred visitor.

Super affiliate: an affiliate capable of generating a significant percentage of an affiliate program’s activity.

Commission: Income an affiliate earns for generating a sale, lead or click-through to a merchant's web site. Sometimes called a referral fee, a finder's fee or a bounty.

Two-tier affiliate program: affiliate program structure whereby affiliates earn commissions on their conversions as well as conversions of webmasters they refer to the program.

Cookies: small text files stored on the visitor's computer, which record information that is of interest to the merchant site. In affiliate software cookies are utilized to track which affiliate the web visitor came from and which banner or link they clicked. They can also store the date/time of the click for purposes of tracking the time elapsed between a click and a conversion to a sale or lead.

Cookie Expiration/Cookie Retention: When a cookie is planted on a web browser, a date when the cookie expires is defined. This date is important because affiliate sales can only be recorded before the cookie expiration date. This period will also determine if repeat sales will be recorded.