At its core, affiliate marketing is a performance-based marketing strategy. It’s a symbiotic relationship between a merchant (also known as an advertiser or vendor) and an affiliate (also known as a publisher).
In this relationship, the affiliate promotes the merchant’s products or services, and in return, receives a commission for each sale, click, or lead generated through their unique affiliate link.
Affiliate Marketing TERMS
An affiliate is an individual or company that partners with a business to promote its products or services. In return for their promotional efforts, the affiliate earns a commission on sales or leads generated from their referrals. This role typically involves creating content, driving traffic, and using marketing strategies to increase the business’s customer base and revenue.
An affiliate agreement is a legally binding document outlining the relationship between an affiliate and a business. This includes commission structure, payment terms, responsibilities, marketing guidelines, and other terms of engagement. It ensures both parties understand their roles and the rules of the affiliate partnership.
An affiliate ID is a unique identifier provided to each affiliate by the business. This ID is embedded in affiliate links and used to track the source of traffic, sales, or leads that the affiliate directs to the business’s website, allowing the business to calculate the affiliate’s commission.
An affiliate link is a specific URL provided by a business to an affiliate. This URL includes the affiliate’s unique ID and is used to track the traffic and sales that the affiliate sends to the business’s website. When a customer clicks on an affiliate link and completes a desired action, such as a purchase, the affiliate earns a commission.
An affiliate manager is a person appointed by a business to oversee its affiliate program. Responsibilities include recruiting new affiliates, providing them with support, ensuring compliance with the affiliate agreement, tracking their performance, and optimizing the overall affiliate program.
An affiliate network is a platform that connects businesses seeking affiliates with individuals or companies looking to promote products or services. These networks facilitate partnerships, provide tracking and reporting tools, and handle commission payments, reducing the administrative burden on both businesses and affiliates.
Affiliate software is a tool used by businesses to manage their affiliate programs. This software can facilitate affiliate recruitment, track the performance of affiliates, calculate and pay commissions, generate reports, and help manage affiliate relations.
An autoresponder is a program that automatically sends a predefined email response when a user performs a certain action, such as submitting a form or signing up for a newsletter. Autoresponders are commonly used in email marketing to maintain engagement with customers or leads.
A chargeback is a transaction reversal initiated by a customer’s bank or credit card company, often due to a dispute or suspected fraudulent activity. Chargebacks can result in lost sales and commissions for both the business and the affiliate.
Click-Through Rate (CTR)
The click-through rate is a metric used to measure the effectiveness of an affiliate’s promotional efforts. It’s calculated by dividing the number of clicks an affiliate link receives by the total number of impressions (views) it gets, and then multiplying the result by 100 to get a percentage.
Cloaking in affiliate marketing refers to the practice of disguising an affiliate link to hide the tracking code or make the link appear more appealing. It’s often used to increase click-through rates and protect against link hijacking.
A commission is the monetary reward an affiliate receives for successfully promoting a business’s products or services. Commissions can be earned per click, lead, or sale, and their amount is usually defined in the affiliate agreement.
A contextual link is an affiliate link that is embedded directly within relevant text within the affiliate’s content. This practice can make promotions appear more natural and less intrusive, increasing the likelihood of user engagement.
The conversion rate measures how many of the users who click an affiliate link complete a desired action, like making a purchase or signing up for a service. It’s calculated by dividing the number of conversions by the total number of clicks and multiplying the result by 100 to get a percentage.
In the context of affiliate marketing, a cookie is a small piece of data stored on a user’s device when they click an affiliate link. This data allows the business to track the user’s actions on the website and attribute any sales or leads to the correct affiliate.
Learn more about Cookies in Affiliate Marketing.
Cookie duration refers to the length of time a cookie remains active on a user’s device. If a user clicks an affiliate link and makes a purchase within the cookie duration period, the affiliate will receive credit for the sale. This period can vary, but it’s typically 30 to 90 days.
Cost Per Action (CPA)
Cost Per Action is an affiliate marketing payment model where the business pays the affiliate for each specific action completed by a user, such as making a purchase, signing up for a service, or filling out a form.
Cost Per Click (CPC)
Cost Per Click is a payment model where the business pays the affiliate for each click made on their affiliate link, regardless of whether the user completes a desired action.
Cost Per Sale (CPS)
Cost Per Sale is a payment model where the business pays the affiliate a percentage or fixed amount for each sale made through their affiliate link.
Customer Lifetime Value (CLV)
Customer Lifetime Value is a prediction of the total value a business can expect from a single customer over the course of their relationship. It takes into account purchase frequency, average purchase value, and customer lifespan.
A datafeed is a file provided by the business containing detailed information about their products, such as descriptions, images, prices, and URLs. Affiliates can use this data to create content, promote products, and generate their affiliate links.
Deep linking is the practice of using an affiliate link to direct a visitor to a specific page on the merchant’s website, rather than the homepage. This can increase conversions by providing a more relevant landing page for the visitor.
Earnings Per Click (EPC)
Earnings Per Click is a metric used to evaluate the potential profitability of an affiliate program. It’s calculated by dividing the total earnings by the total number of clicks received. The result represents the average earnings the affiliate can expect to make for each click on their affiliate link.
Hoplink is a term used by ClickBank, an affiliate network, to refer to their affiliate links. It serves the same purpose as an affiliate link, directing traffic to the advertiser’s website and tracking any resulting sales or actions.
An impression occurs each time an advertisement or link is displayed to a user. In affiliate marketing, the number of impressions can help measure the visibility of an affiliate’s promotional efforts.
A landing page is the specific web page a user lands on after clicking an affiliate link. This page is designed to convert visitors into customers or leads by prompting them to complete a desired action, such as purchasing a product or signing up for a service.
A lead is a potential customer who has shown interest in the business’s product or service. In affiliate marketing, a lead is often defined as a user who has provided their contact information, typically through a form fill or email subscription.
Link cloaking refers to the practice of altering an affiliate link to make it shorter, more appealing, or less obviously an affiliate link. This can be done using various tools or services and can improve click-through rates and protect against commission theft.
In affiliate marketing, a merchant is a business that offers an affiliate program. The merchant creates the products or services, sets the terms of the affiliate program, and pays the affiliates for their promotional efforts.
A niche in affiliate marketing is a specific, targeted segment of the market that an affiliate chooses to focus its promotional efforts on. Choosing a niche involves identifying a specific interest, topic, or area where there is a demand for certain products or services and competition is manageable.
An offer refers to the product or service that an affiliate promotes. The offer is typically provided by the merchant and may include physical products, digital products, subscriptions, memberships, or services.
Pay Per Click (PPC)
Pay Per Click is a commission model where the affiliate earns a predetermined amount for every click on their affiliate link, regardless of whether a sale or action is completed.
Pay Per Lead (PPL)
Pay Per Lead is a commission model where the affiliate earns a predetermined amount for each lead generated through their affiliate link. A lead typically involves the user providing contact information or expressing interest in a product or service.
Pay Per Sale (PPS)
Pay Per Sale is a commission model where the affiliate earns a predetermined amount or percentage for each sale made through their affiliate link.
The payment threshold is the minimum amount an affiliate must earn in commissions before they can receive a payout from the business. This threshold varies between affiliate programs.
A performance bonus is an additional incentive provided by the merchant to high-performing affiliates. It’s usually given when the affiliate reaches certain sales milestones.
A postback URL is a tracking method used in affiliate marketing that sends data back to the affiliate network or software when a conversion happens. It allows for more accurate tracking of conversions when cookies cannot be used, such as in mobile app advertising.
In the context of affiliate marketing, a publisher, also known as an affiliate, is an individual or a company that promotes the merchant’s products or services and earns a commission for each sale or lead generated.
A recurring commission structure rewards the affiliate with a commission every time a customer they referred makes a repeat purchase or pays a recurring fee for a service, such as a subscription or membership. This structure can provide the affiliate with a steady income stream over time.
A referral in affiliate marketing is a user who has clicked an affiliate link and completed a desired action, such as making a purchase or becoming a lead. The affiliate earns a commission for referring this user to the business.
A recurring commission is a payment model where affiliates earn a commission for as long as the customer they referred continues to purchase the product or service. This model is often used for subscription-based services.
A refund is the return of money to a customer following a purchase. In affiliate marketing, if a customer gets a refund for a purchase made through an affiliate link, the affiliate’s commission for that sale is typically reversed.
A referral in affiliate marketing is a potential customer who clicks on an affiliate link and is directed to the merchant’s website. If the referral makes a purchase, the affiliate earns a commission.
Return on Investment (ROI)
Return on Investment is a metric used to measure the profitability of an investment. It’s calculated by dividing the net profit by the cost of the investment and is often expressed as a percentage. In affiliate marketing, ROI can help affiliates evaluate the effectiveness of their promotional strategies.
ROI tracking involves monitoring and analyzing the return on investment of an affiliate’s marketing efforts. This helps the affiliate understand which strategies are profitable and which need improvement.
Split testing, or A/B testing, is a method used to compare two versions of a webpage, advertisement, or other marketing material to determine which one performs better. This can help affiliates optimize their content and promotional strategies to maximize conversions and commissions.
A sub-affiliate is someone who an affiliate recruits into the merchant’s program. The original affiliate earns a commission on their sub-affiliate’s sales, creating a second tier in the affiliate program.
A sub-affiliate network is a company that offers affiliates the opportunity to promote offers from multiple merchants or affiliate networks. This can provide affiliates with a wider range of products to promote and potentially increase their earnings.
A super affiliate is an affiliate who generates a significant amount of the total sales or leads for an affiliate program. These affiliates often have a large audience, advanced marketing strategies, and a deep understanding of the affiliate marketing industry.
A tracking code is a unique identifier embedded in an affiliate link that allows the business to track where traffic, sales, and leads are coming from. This code is critical for attributing sales to the correct affiliate and calculating their commission.
In online marketing, traffic refers to the number of users who visit a website. Affiliates aim to drive traffic to the merchant’s website through their affiliate links, with the goal of converting these visitors into customers or leads.
Two-Tier Affiliate Program
Two-tier affiliate marketing is a structure where affiliates earn commissions on their own sales or leads, as well as on the sales or leads generated by affiliates they’ve referred to the program. This can create an additional income stream for affiliates.
A tracking code is a unique ID that an affiliate uses to track the source of their traffic. It’s embedded in the affiliate link and enables the merchant or the affiliate network to track where the clicks and sales are coming from.
A unique click refers to a click on an affiliate link by a unique individual. If the same individual clicks on the link multiple times, it’s still counted as one unique click. Unique clicks are used to measure the reach of a campaign.
Unique visitors are individuals who visit a website at least once during a specific period. This metric helps businesses and affiliates understand the size of their audience and evaluate the reach of their marketing efforts.
A vertical is a specific industry or category of products or services in the market. Affiliates often specialize in a particular vertical, such as fitness, beauty, or technology, to focus their promotional efforts and expertise.
In the context of affiliate marketing, a whitelist is a list of approved affiliates who are permitted to promote a business’s products or services. This can help businesses manage their affiliate partnerships and ensure their products are being promoted responsibly and effectively.
The language of affiliate marketing can seem complicated, but once you understand these key terms, you’re well on your way to mastering this powerful online marketing strategy.
As with any industry, understanding the jargon can empower you to navigate the landscape more efficiently and make more informed decisions.