Affiliate Marketing Glossary – Terms You Should Know

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Hey there,

Today I’ll share with you my affiliate marketing glossary, where you will find some of the most important terms that I would recommend for everyone to know. Is very important to have a general understanding of these terms, because you will come across them in your affiliate marketing journey and definitely knowing them will be very useful.

I want you to know that I selected just a few terms, and I believe these are the most important for you. Definitely there a lot more terms that with the time you will encounter along the way.

 

Without further ado, let’s begin!

 

Affiliate Marketing

Also referred to as Performance Marketing. Is a form of performance-based advertising in which a business pays its affiliates based on their actions (a customer brought to the business through the affiliate’s own marketing efforts).

 

Advertiser

Also referred to as a Merchant. The advertiser is the company that produces the products/services or the company that was hired by a brand to advertise for them.

 

Affiliate

Also referred to as Publishers. An affiliate is an individual or a company who promotes products/services for a merchant (advertiser), in exchange for a commission from the sales or leads acquired.

 

Affiliate Manager

Is the person who manages the affiliate program for a Merchant. His main task are: recruiting publishers (affiliates), tracking affiliates activity, increasing overall sales for the advertiser (merchant).

 

Affiliate network

Is a third-party company that provides affiliate program management services for multiple brands. Affiliate networks provide the tracking technology to report clicks, sales, and leads.

 

Click-Through-Rate (CTR)

It refers to the act of someone clicking on an affiliate link and being taken to the merchant’s (advertiser) website. Basically is a percentage rate and is calculated like this: ‘‘the number of times an affiliate link has been clicked” / ”the number of times the link has been viewed” x 100 = CTR

 

Conversion Rate

Is the action successfully completed by a visitor or customer based on the pre-defined point of sale. This action could be a click, a credit card submission or a signing up for an email list. Similar to CTR is calculated like this: ‘‘the number of sales a link has generated” / ”number of impression (views) x 100 = CT

 

Cookies

Is a small file that is added to a browser by a website or redirector domain, allowing the website to recognize when the visitor returns to the website. Is assign an ID to a visitor that has clicked on an affiliate link. When a visitor completes a conversion (action), the affiliate is credited for the sales based off the cookie recognition.

 

Cost Per Action (CPA)

Also referred to as Cost per Acquisition. Basically is the amount of money paid for the desired outcome such as completing a sale or a sign-up.

 

Cost Per Click (CPC)

It refers to the amount of money paid to generate a click by a visitor on an affiliate link. Can be calculated: ”numbers of clicks generated” / ”total campaign cost” = CPC

 

Cost Per Thousand (CPM)

It refers to the amount of money it costs to display an advertisement per 1000 impressions (views).

 

Creative

Is a type of graphical ad or text link provided to the affiliate to use it for promoting the affiliate program.

 

Earning Per Click (EPC)

Is the average amount earned every time someone clicks on an affiliate link. The formula is: ‘‘ the amount generated in commissions from an affiliate link” / ”total numbers of clicks that link received” = EPC

 

Insertion Order

Insertion order outlines the campaign details, in addition to the terms and conditions that an advertiser and an affiliate will sign prior commencing their working relationship ( specify payout amount by conversions, define traffic sources, dictate the campaign duration).

 

Outsourced Program Manager (OPM)

Is a third-party account representative, who work independently of an advertiser. OPM will ensure campaign success by finding affiliates.

 

Pixel

Pixels are HTML codes programmed onto a confirmation page, that reports sales  & conversions. The main types of pixels are: javascript, iframe, image, and post back. Each of them is designed to pass the customer information back to an advertiser (merchant) when a successful conversion is made, for them to pay out the commissions accordingly.

 

Tracking Link

Is a unique code specifically assigned to an account. Advertisers are the ones providing these tracking links to each of their affiliates or networks. Tracking links are used to track the number of sales acquired by a specific affiliate.

 

Unique Click

Unique clicks track the number of clicks from an original visitor,  on an affiliate link. For example: if the same visitor clicks on an affiliate link 3 times, only one click will be counted.

 

White Label

Referrers to a merchant allowing an affiliate to sell products under their own brand with no mention of the actual merchant (advertiser).

 

Congratulations, Now You Know More

My friend, I hope by now you have a better understanding of these terms that sooner or later you will come across in the affiliate marketing industry. Like I said in the beginning, these are just a few of the terms but are very important especially when you will start earning a lot of money.

Please remember to treat affiliate marketing like any other business, because it is. The more knowledge you will gain, the more successful you will become.

 

I encourage you to leave below, your opinion or ANY questions you have, about the Affiliate Marketing Glossary, and I promise to get back to you as fast as possible. I truly believe that if we combine our knowledge, WE can be a lot more SUCCESSFUL!

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