Affilate Marketing Glossary – What is Affiliate Marketing?

20 Jun 2018
by admin
FAQ

Who are the 4 pillars of affiliate marketing? The Advertisers, Networks, Publishers and Customers

As you may know, the industry of affiliate marketing has four basic pillars: the advertisers, the networks, the publishers and the customers. Although it sounds quite obvious at first glance, the truth is, sometimes in can be confusing over who is who, so let’s break it down.

Advertisers

Also known as merchants, retailers or brands, the advertisers are the sellers of the products or services. They use affiliate marketing to promote their merchandise and create brand awareness. This promotion is carried out by publishers that own websites related with the advertiser’s products or services. Advertisers can work directly with publishers or do it through a network.

Networks

The networks or affiliate networks are intermediaries between advertisers and publishers. Although they might seem unnecessary, networks are usually the key both for advertisers and publishers to easily find themselves. Given the amount of websites there are nowadays, it sounds almost impossible for an advertiser to find the correct place to promote its products. The networks find suitable websites for the advertisers, and encourage publishers to promote products or services related with their website.

Publishers

Almost any website can become a publisher. Publishers create online contents, and provide Internet users with information about any topic of interest. Publishers promote advertisers products or services in their own website. Although the way publishers benefit from these promotions may vary, the most common way of earning money as a publisher is by commissioning the sales the advertiser’s make through their websites.

Customers

Finally, customers are visitors that end up acquiring products or services provided by advertisers, that are being promoted in the publishers websites.

 

Unsure of an affiliate marketing term? Use our glossary to find out more

Below are some of the most common terms you will come across in affiliate marketing, so it’s handy to what they all mean! 

    •  A.
        • Affiliate

          An affiliate (sometimes referred to as a publisher or associate)
          publishes information, content, creatives and offers from a merchant
          or advertiser on their website in return for a form of remuneration,
          usually a commission on leads or sales the refer to the merchant
          website.

        • Affiliate Network

          An affiliate network acts as an intermediary between merchants and
          affiliates and provides the tracking platform technology to enable
          data to be collected via a tracked link. Networks liaise between
          merchants and affiliates to ensure that promotion of the merchant is
          meeting the terms and conditions set by them. They also provide a web
          interface allowing affiliates and merchants to track the activity of
          tracked links. Payments to affiliates also go via affiliate networks.

        • Affiliate Program

          An affiliate program is a structure that a merchant has put in place
          in order to promote their product or service. It can include information
          on a remuneration package for affiliates and creatives for affiliates to
          display on their sites and usually is specific to a particular product
          enabling merchants to have multiple affiliate programmes.

        • Auto Approval Process

          This can refer to either the approval process that a merchant uses
          when an affiliate applies to a program in order to request permission to
          refer traffic to a merchant in return for commission. It can also refer
          to the auto approval of commissions once an affiliate has been accepted
          onto a program. Commissions can occasionally be auto approved for any
          transactions/leads referred by the affiliate, depending on the situation
          and preference of the merchant.

    • B.
        • Banner

          A web banner is an advert that is placed on a webpage and there are
          varying types and sizes of advert. We have created information on the
          most commonly used banner
          advert sizes and names Banner adverts can come in various file
          formats such as GIF, JPEG, Flash, Javascript and more.

        • Browser

          This is the software used to view webpages. Examples of web browsers
          include Internet Explorer, Chrome, Firefox, Safari and Opera.

          What do the acronyms CPA, CPC, CPD, CPM, CTR, CR mean in Affiliate Marketing? Our glossary will explain

    • C.
        • Click Through Rate (CTR)

          The click through rate compares the amount of visitors that are
          visiting an affiliate webpage to the amount that are actually performing
          the desired action of clicking on a merchant’s link/creative. This is
          displayed as a percentage and is a good way to measure how well the
          affiliate is converting their traffic. It can be used in conjunction
          with CR to assess where visitors are being lost.

        • Co-Branding

          To increase trust in brands, some merchants will work with affiliates
          to provide co-branded (displaying both brands) landing pages which
          visitors are directed to from the affiliate site. An example would be
          using copy such as “Affiliate_A in partnership with Merchant_A”.

        • Commission

          Commission is the term used to refer to the income an affiliate makes
          on producing a desired action for a merchant. This can cover many
          actions, but is generally either a sale, lead, sign-up/subscriber or
          click. This may also be referred to as a referral fee or a bounty.

        • Conversion Rate (CR)

          This is a metric used for assessing how well a program is performing
          between an affiliate and a merchant. The conversion rate can refer to
          the conversion of many things, but is most commonly used to show the
          amount of visitors or traffic that is being converted from a click on
          the affiliate site to a sale for the merchant. This is shown as a
          percentage and is a great way to measure the effectiveness of changes to
          page design/promotion/content/campaign used by either party.

        • Cookies

          Cookies are small text files that are stored on the visitor’s browser
          and are used to enable effective tracking of the visitor’s actions on
          the affiliate and merchant sites. They allow tracking of the affiliate
          webpage visited, the link/creative clicked, the date/time the visitor
          clicked and was converted and the actions they performed.

        • Cookie Period

          The cookie period or cookie expiration refers to the amount of time
          that the browser will store cookies for, which is defined by the
          merchant. Anything occurring outside of this expiration date will not be
          tracked back to the affiliate’s referral and so the affiliate will not
          be paid on transactions occurring after the cookie expiration.

        • Cost Per Acquisition (CPA)

          Sometimes referred to as “Cost Per Action”, this is a measurement of
          the amount paid by a merchant to an affiliate for each desired action
          completed by a visitor. This is usually in the form of a sale or a lead
          completion.

        • Cost Per Click (CPC)

          CPC refers to the cost that an advertiser pays for every click on
          their tracked link. This is commonly used when advertising through ad
          systems like Google Adwords but can also be used in affiliate marketing,
          although is a less popular metric as most affiliate marketing is based
          on being remunerated for an action which produces a more definite
          revenue for the advertiser, rather than a click, which while valuable is
          not an absolute measurement of revenue derived.

        • Cost Per Day (CPD)

          This is another way of charging for advertising. This method is not
          so popular any more and tends to be used for display advertising rather
          than advertising on an affiliate/commission basis.

        • Cost Per Mille (CPM)

          CPM translated means “Cost Per Thousand Impressions” and is a metric
          often used for an advertiser to pay for display advertising, the aim of
          which is more along the lines of creating a brand awareness. A page
          impression is counted every time a page is loaded in a web users
          browser.

        • Creative

          A creative is a general term referring to the image/media file
          displayed on an affiliate webpage. This can include banners, videos and
          rich media files such as interactive “rollover” adverts or adverts using
          sound, video or animation to grab the visitors attention. It can also
          include text links and logos/standard images.

    • D.
        • Deep Link

          A deep link is an affiliate link which directs the visitor to a
          webpage “deep” within the merchant site and is often used to increase
          conversions by decreasing the click journey made by the visitor and
          increasing the relevancy depending on what product or service the
          affiliate is recommending. It essentially directs a visitor to any page
          other than the homepage.

    • E.
        • Earnings Per Click (EPC)

          This is a commonly used metric for working out how much commission is
          payable to an affiliate for each click that has been performed on their
          tracked link. It can also sometimes be used to show how much a merchant
          has generated in revenue for each click that an affiliate has referred
          to them.

        • Effective Cost Per Mille (eCPM)

          Translated this means “Effective Cost Per Thousand Impressions”
          Essentially it is a measure of what would be earned per thousand
          impressions but is used in place of CPM when CPM cannot be worked out
          for any reason. This can include a situation when 1000 impressions have
          not been served but you want to work out which ad you are using is most
          profitable from an impression basis.

    • I.
        • Impression

          An impression or page impression is recorded every time a page is
          loaded. It is an effective way of measuring the amount of times that a
          page and the content and ads on that page are viewed.

          What do we mean by tracked links, Impressions, EPC, Super Affiliates and Merchant? Our Glossary will explain

    • M.
        • Manual Approval Process

          this can either refer to the approval process employed by the
          merchant when deciding whether to accept an affiliate onto their
          affiliate program. Many merchants like to manually check the affiliate
          site is a good match for their product or service before acceptance. It
          can also refer to the manual approval of transactions or actions before
          commission is approved for payment to the affiliate.

        • Merchant

          Also referred to as an advertiser, a merchant promotes their products
          and services through an Affiliate’s or Publisher’s website via a
          tracking link. The merchant pays or remunerates the affiliate for this
          promotion usually in the form of commission for sales or leads sent via
          the affiliate site.

    • P.
        • Performance Incentive

          A performance incentive is given to affiliates occasionally by
          merchants to encourage the affiliate to push the merchant’s products,
          services or site more effectively. This can take on any form of
          incentive but common methods will be prizes for extra sales, or tiered
          commission structures which usually define a target transaction or
          transaction value to be met in order to receive extra “bonus”
          commissions, often for a limited time.

        • Pre-Qualified Visitors

          The process of pre-qualifying a visitor is a way of the affiliate
          trying to make sure that the potential customer they are targeting with
          their promotions is as likely as possible to perform the required action
          for the merchant. There are many methods of pre-qualifying customers,
          and these will often be based around combining targeted marketing with
          as much relevant information as possible about the merchant’s product or
          service, and trust in the affiliate site, information and opinions.

    • R.
        • Recurring Commissions

          Merchants may sometimes choose to reward affiliates on a recurring
          basis, where the product or service the affiliate has promoted charges
          the customer on a recurring basis. This will usually be done by
          rewarding the affiliate with a percentage of the customer’s regular fee.

    • S.
        • Super Affiliate

          The term super affiliate refers to the best performing affiliates. It
          can expected that around 1% of all affiliates are super affiliates, and
          typically that 1% will bring in around 90% of a merchants sales.

    • T.
        • Targeted Marketing

          This term refers to targeting a marketing campaign to make it as
          effective as possible. In short, it is the best way to makes sales and
          requires bringing together the right product/service, at the right time,
          and making the right potential customer aware of it.

        • Tracked Link

          Sometimes referred to as a “tracking link”, “affiliate link” or
          sometimes “text link”, a tracked link is a clickable link which is most
          usually placed on a publisher’s webpage and directs traffic through to a
          merchant’s webpage where an action is likely to be performed in return
          for commission to the referring publisher site. The tracked link’s
          origin is traceable using various parameters added to the HTML code in
          the hyperlink.

        • Two Tier Program

          This term can refer to a program that allows affiliates to recruit
          their own affiliates who allow the original affiliate to make commission
          on their own promotions as well as a percentage of the actions the
          recruited affiliate makes. This is also known as Multi-level marketing
          (MLM)

    • V.
        • Viral Marketing

          Refers to the rapid adoption of a product or service through word of
          mouth, email or via social networks. Often beginning with an inventive
          way of making people aware of something as quickly as possible by doing
          something “a little bit different” which encourages a branching out or
          spreading of the word in the same way a virus would spread rapidly. This
          is usually a very cheap way for advertisers to promote themselves or
          their products, but hard to instigate if creative ideas don’t flow
          easily!

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