Affiliate – Companies can offer partners or subordinates a commission any time a specific action takes place (such as sales, traffic or subscription to certain services). Most of the time affiliates will use their own web site to drive traffic, either organically or with paid advertising, to their affiliate company in an attempt to generate revenue.
Affiliate Fraud - Attempts by certain affiliates to illegally generate profits. Fraudulent affiliates occasionally use bots and scripts in order to simulate genuine human interact in an effort to generate income.
Affiliate Link – Affiliate links are links which contain identifiers (alpha-numeric) with which a company can tally which affiliate led to a specific action. By using a unique affiliate link, an affiliate is given a commission based on his personal efforts.
Affiliate Network – These are separate entities which provide services to both affiliates and merchants in the form of data collection and display, tracking, reporting and statistics. Affiliate Networks earn by charging Merchants a network override fee (see Network Override).
Affiliate Program – An affiliate program is a specific program that offers commissions based on performance (sales, conversion or traffic). Affiliates who exceed
Banner Advertisement (Banner Ad) – A graphical advertising unit that is displayed on an affiliate’s web site and attempts to lure visitors to the advertiser.
Click-Through Rate - The rate (usually expressed as a percentage) through which a visitor clicks on the ad and is conveyed to the advertiser’s content. Therefore, a CTR rating of 10% would indicate that of 100 page views, 10 visitors are expected to click on the given advertisement.
Click-Reference – Click references are a useful tool for affiliates because they indicate which specific page or content sales are coming from. Click references allow affiliates to streamline their pitches and advertising campaigns based on what works.
CPA (Cost Per Action) – The amount paid to an advertiser given a specific type of action.
CPC (Cost Per Click) – The amount paid to an advertiser whenever a visitor clicks on an advertisement.
CPM (Cost Per 1000 Impressions) – Some affiliate programs offer affiliates a commission based on 1000 page views or advertising impressions.
CR (Conversion Rate) – The conversation ratio is the relationship between click-throughs to an advertiser and the sales that are subsequently generated. Low conversion ratios mean that only a small percentage of people “clicking-through” to an advertiser are interested in the product being sold.
Commission – A commission is either a fixed value or percentage of the profit earned by selling a product or service.
Cookie – Cookies are small bits of code that are stored in a user’s browser when they visit a web site. A cookie will allow an affiliate to receive a commission for sales made as long as the cookie is stored on the visitor’s browser (this is usually set at 60 days, but can rarely be set to lengths of time as high as a year). The length of a cookie’s expiry is an important consideration for affiliate marketers because the longer it is, the better chance they have of accumulating profits should visitors chooses to return at a later date to buy the product or service.
Cookieless Tracking – Because of the growing tendency of web surfers to erase cookies after every session, affiliate marketers have been looking for other ways to track return sales that do not include the use of the easily disposable cookies.
Contextual Links – Contextual affiliate links are text links embedded into a topic specific region of text, which could take the form of an article or a review.
Conversion Ratio (CR) – Is a similar calculation to conversion rate, that allows affiliates to calculate how well a designated advertisement converts by dividing the number of “click-throughs” by the amount of sales made.
Data Feed – Affiliates use merchant data feeds (an exportable data file, usually denoted by .csv and .xml formats) to create their own commercial content. These data files contain all the products, images, links and information about a merchant’s selection of goods and services available to an affiliate.
Drop-Shipping – This is a supply chain management technique where the affiliate transfers payment and orders to a wholesale manufacturer and makes a profit equal to the difference between the retail price and the wholesale price. Drop Shipping is a lesser well known form of affiliate marketing.
EPC – Affiliates usually use the EPC calculation (earnings per 100 clicks) to determine how well an affiliate program is working for them. This information is usually offered via a report or statistics page by the merchant to the affiliate, and can be calculated slightly differently in each case.
Google Adsense – Google offers content providers and web site owners the ability to earn a percentage of their PPC earnings by displaying relevant advertisements from their Adwords campaign. This is among the most common forms of PPC (pay per click) advertising.
Google Adwords – Google’s bidding-based “Pay per Click” advertising solution for web site owners and marketers. Advertisers can choose which “keywords” to advertise and, depending on how competitive and how profitable a given niche is, assign a PPC price. These advertisements are displayed on a number of different sources, including the “content network” which is not search-engine based, but rather a collection of content publishers and websites.
Impressions – Every time a web page loads a given advertisement for a viewer, it counts as an impression. The amount of impressions relative to the amount of click-throughs is used to calculate CTR.
Link Popularity – The measure of how many links, from any number of sources are pointing “back” (back links) towards your site. Higher link popularity figures is generally considered to improve your search engine rankings.
Network Override – This is a fee beyond simple commission fees charged by a network on the merchant.
Merchant – This business owner and/or product retailer.
PPC (Pay Per Click) – A form of advertising where advertisers pay for every click they receive on their advertising. An example is Google Adwords. Profitable and competitive keywords can drive the cost of a click exorbitantly.
Residual Earnings – Affiliates are awarded additional commission for subsequent transactions by buys that were referred by them.
Reversal (or charge-back) – Is the annulment of commissions and earnings by a merchant when goods or services sold are returned by buyers, declined or are the result of fraudulent activity on behalf of the affiliate.
Sky Scraper – A form of advertising unit which is tall and narrow (hence the term sky-scraper)
Super Affiliate – The top affiliates in a given program. They drive large amounts of converting traffic to merchants and generate huge profits for themselves and their hosts in the process. There are generally very few super affiliates in any program.
SEO (Search Engine Optimization) – A set of procedures and techniques that an affiliate can apply to his/her web site in order to improve its rank and visibility on major search engines.
Tiered Commission - A commission structure based on certain performance benchmarks. For instance, the more sales generated the higher the earning percentage that is offered to affiliates. The Amazon affiliate program is a popular example of this.Two-Tiered Affiliate Program – These are affiliate programs which offer affiliates the ability to passively earn a percentage of sub-affiliates they referred to the program, in additional to traditional affiliate sales.
Unique Visitor - Is a measure of the amount of unique people who visit a site, or click on a link in a given amount of time. While a single person could tally multiple page views by reloading a page, it will still count as a single unique visitor.
White Label Site – Occasionally, merchants will attempt to help their affiliates by giving them an un-branded web site with which they can immediately start marketing and selling their products. Notable examples are Amazon’s A-store or Expedia’s travel web site and browsable database.