Affiliate marketing is a complicated and often confusing practice for those just getting started - and even for some seasoned professionals.
For many, the hardest part is simply learning all the jargon. With a vocabulary that encompasses everything from traditional digital marketing terms to completely new industry-specific words, it can be a bit overwhelming to try to figure it all out at once. In order to help both interested newbies and seasoned veterans try to make sense of it all, Website Magazine has compiled an affiliate marketing glossary of the most important terms to know to achieve success in the industry.
Keep in mind that this affiliate marketing glossary will be updated as new terms and phrases as they emerge. If our staff missed one or you think something should be modified, added, removed entirely from the list, let us know by sharing your comment below.
Above the Fold: The part of a web page or email immediately visible to a user before he or she scrolls down. This area depends on the resolution of a visitors computer screen. The content within this area, which often includes advertising, is typically seen as having more value, and this is why visitors encounter and interact with it first.
AdSense: The part of Google’s AdWords CPC advertising model that pays publishers (affiliates) for displaying ads. Payment is determined based on the number of clicks made and the amount of the advertiser’s bid.
Advertiser: A person selling a good or service (see also: Merchant). Advertisers pay affiliates whenever a visitor takes the action (or actions) decided upon and defined in the affiliate agreement.
AdWords: A PPC advertising program from Google.
Affiliate: An individual or business that owns a website and earns a commission for referring clicks, leads or sales to a merchant.
Affiliate Agreement: The terms between a merchant and an affiliate that regulates their relationship, including how the affiliate will be compensated for referring traffic to the merchant's website.
Affiliate Link: A unique URL tracking link that sends traffic to a merchant's website and identifies the affiliate who referred the visitor; these links are generally embedded in text, images, product links, etc. An example of an affiliate link might look like this: http://www.URL.com/page.asp?AffiliateID=999
Affiliate Manager: The person responsible for running the merchant's affiliate program. This job involves everything from recruiting affiliates to establishing incentive programs, creating media for the affiliates, reporting on sales and paying affiliates.
Affiliate Program: A program in which a merchant rewards an affiliate for web traffic, sales or leads on a PPC, PPS or PPL basis. They are also referred to as Associate Programs, Partners, Referrals or Revenue sharing programs.
Affiliate Program Directory: A comprehensive listing of a merchant’s affiliate programs. They are typically categorized by industry and include information about payout or commission rates.
Affiliate Network: The mediator between an affiliate and a merchant's affiliate program. Networks offer services to both affiliates and merchants, such as reporting and payment services.
Affiliate Software: A software program used to run and manage an affiliate program. These programs help users sign up affiliates, managing links and track impressions, clicks, sales and leads.
Affiliate Solution Provider: These are third-party companies that provide an affiliate tracking solution on a hosted basis. While affiliate software solutions are hosted by users within their own websites, affiliate solution providers take care of the hosting them.
Affiliate Tracking: The process of tracking a link from an affiliate using an affiliate link.
Associate: See Affiliate
Auto-Approve: An affiliate application process that automatically accepts/approves all applications as soon as they’re submitted. This term can also be used to describe the automatic acceptance of all sales recorded by affiliates.
Autoresponder: An email, or series of emails, that are automatically sent to a new subscriber, often in the form of a newsletter series.
Banner Ad: An animated GIF, Flash movie or JPEG advertisement on a Web page that promotes a product, service or website.
Browser: A client software program that is used to access various Internet resources. Examples include Internet Explorer, Google Chrome and Mozilla Firefox.
Business-to-Business (B2B) Advertising: A marketing strategy that involves the transaction of goods and services among two businesses rather than a business and a customer.
Charge Back: An invalid sale that results in the affiliate's commission being forfeited.
Click Fraud: The practice of artificially generating traffic to an advertiser's site. This can be done manually or through the use of automated clicking programs (called hitbots). This results in advertisers paying for traffic that has no potential for revenue generation while the scammer receives a percentage of the PPC fees paid out by the advertiser.
Click Fraud Monitoring: Independent services that monitor clicks from PPC campaigns.
Click-Through: The act of a user clicking on a link that follows through to a merchant's website.
Click-Through Rate (CTR): The percentage of users that click on a link and visit a merchant's website.
Co-Branding: When affiliates are able include their own logo or branding symbols on the pages that they send visitors to using affiliate links.
Commission: The income an affiliate earns for generating a sale, lead or click-through to a merchant's website. Also known as a referral fee, finder's fee or bounty.
Contextual Linking: When one places affiliate links to specific products in relevant or related text, articles or pictures on a Web page.
Cookies: Small text files stored on a visitor's computer to record information that is of interest to a merchant site. In affiliate software, cookies are used to track which affiliate a visitor came from and which banner or link they clicked to get there. They can also store the date and time of the click to see how much time elapsed between a click and a conversion.
Cookie Expiration/Cookie Retention: The date a cookie is set to expire, which is defined when the cookie is planted on a visitor’s Web browser. Affiliate sales can only be recorded before the cookie expiration date. This period also determines whethor or not repeat sales will be recorded.
Conversion: When a website visitor completes a site goal, such as purchasing a product.
Conversion Rate: The percentage of clicks that result in a commissionable activity (sale or lead).
Cost-Per-Action (CPA): A arrangement in which affiliates earn a commission by getting visitors to perform a specified action, such as signing up for a merchant's email newsletter.
Cost-Per-Click (CPC): The cost of an individual click that an advertiser pays when compensating affiliates using a PPC program.
Cost-Per-Thousand (CPM): The cost paid per thousand page impressions by advertisers. The letter ‘M’ represents the Roman numeral for the number 1000.
Cost-Per-Order (CPO): Similar to CPA, but referring specifically to sales.
Customer Bounty: The commission paid to an affiliate for every new customer they direct to a merchant.
Data Feeds: Information provided to affiliates by merchants to help them promote and sell products. Data feeds are converted into individual products and include descriptions, links for images, links for visitors to click, pricing and more. The affiliate can use information in the feed to build individual pages for each product or put multiple products on each page.
Demographics: Specific populations broken down by commonly shared characterisitics such as age, sex, income, education, household size, home ownership status and more for the purpose of allowing marketers to study the trends of a desired audience.
Double Opt-In: In email marketing, the process of someone voluntarily signing up for a mailing list that requires subscribers to confirm their subscription by clicking a link in an email. This is required under anti-spam laws in several countries.
Email Link: An affiliate link to a merchant site included in an e-mail newsletter, signature or dedicated email blast.
Email Marketing: The practice of acquiring, managing and marketing to a list of users through email.
Earnings Per Click (EPC): A metric commonly used to work out how much commission is payable to an affiliate for each click that has been performed on their tracked link. It can also be used to show how much a merchant has generated in revenue from each click an affiliate has referred to them.
Effective Cost Per Mille (eCPM): A measure of what would be earned per thousand impressions. It is used in place of CPM when it cannot be figured, such as when a thousand impressions have not yet been served.
Exclusivity: A stipulation by the merchant in an affiliate agreement that prohibits the affiliate from promoting competing products on his or her site.
Feeder Site: A website in which the sole purpose is to redirect, feed and track traffic to another site.
HTML Code: The lines of code that affiliates place on their Web page(s) to linking to the merchant's site. This HTML code contains the unique affiliate link that identifies that the traffic is coming from the affiliate's site.
Impression: The record of every time a page is loaded in order to measure the amount of times that a page (and the content and ads on that page) is viewed.
In-House Program: An internal affiliate program built and managed exclusively by a company.
Joint Venture (JV): A temporary business partnership formed to undertake a particular transaction or project.
Keywords: A group of terms that summarize a topic. Internet users employ them when looking for information on a topic. Keyword phrases are classified as multi-term words.
Link: A banner or text on a website that contains HTML code to transfer those who click on it to another website.
Link Cloaking: A technique that hides the real destination of a link.
Link Farm: A website setup used create links to other sites to improve their search engine rankings.
Long Tail: More obscure keywords that focus on smaller volumes and yield more qualified searches. They are often targeted by affiliate marketers because there is less competition for these words and phrases.
Manual Approval: The process of validating, and then approving, an affiliate application. This can also refer to the process of approving validated sales.
Merchant: A person selling goods or services. Merchants are the advertisers who pay affilates to get users to performed specified actions.
Multi-Level Marketing (MLM): The sale of products through a group of independent distributors who buy wholesale, sell retail and sponsor other people to do the same.
Niche Marketing: A marketing strategy targeted at a focused, specific audience.
Pay-Per-Sale (PPS): An affiliate marketing program that rewards affiliates based on each conversion to a sale, such as the purchasing of a product or service from the merchant's website. PPS programs usually offer the highest commissions, but tend to have the lowest conversion rates.
Pay-Per-Lead (PPL): An affiliate program that rewards affiliates for sales leads generated to a merchant’s website. PPL generally offers midrange commissions and midrange to high conversion ratios.
Pay-Per-Click (PPC): An affiliate program that rewards affiliates for each unique click to the merchant's website.
Payment Threshold: The minimum accumulated commsion an affiliate must earn to trigger payment from an affiliate program.
Performance-Based Marketing: A marketing program in which the merchant only pays commissions for specified results, such as conversions to sales or leads.
Performance Incentive: When merchants to encourage an affiliate to push the merchant’s products, services or site more effectively. Examples include prizes for extra sales or tiered commission structures that define a target transaction or transaction value to be met in order to receive extra “bonus” commissions, often for a limited time.
Plug-In: A small software that adds features to a larger piece of software. Also known as a module or extension.
Product Rights: Special exceptions that determine how a buyer can use a digital product. Product Rights are categorized as private label rights (PLR), resell rights (RR), wherein branding stays in tact, and master resale rights (MRR), which allows affiliates to resell the product and give others the right to resell those products.
Recurring Commissions: Compensation for an affiliate that takes place on a consistent basis when merchant’s charge customers a recurring fee. For example, a Web host that charges customers on a monthly basis might reward the affiliate a percentage of each month's payment from the customer.
Residual Earnings: Payments made to affiliates for all purchases on a merchant’s site made by a customer that was referred by the affiliate, rather than just the first sale.
Retailer: See Merchant
Return on Advertising Spending (ROAS): The amount of revenue generated for every dollar spent on advertising.
Return on Investment (ROI): The money made based on the money spent on marketing and advertising campaigns. Higher sales, a larger number of shoppers and a greater profit margin generated by sales all lead to a better ROI.
Search Engine Optimization (SEO): The practice of working to improve or refine a website to be positioned higher on the search engine results pages for certain keywords.
Sitemap: HTML files that give users a human-readable list of pages and website sections to improve navigation and access. XML sitemaps are used to provide search engines with details on the structure of a site and its most important pages.
SPAM: Unsolicited commercial emails or unsolicited bulk emails that often contain advertisements for products or services.
Spider Detection: The process of detecting and ignoring automated spiders or bots.
Spyware: A program hidden within software that transmits user information to advertisers through the Internet. Also known as adware.
Super Affiliates: The highest performing affiliates. Typically, less than one percent of affiliates are super affiliates, yet they will usually bring in more than 90 percent of sales for an advertiser.
Syndication: A partnership between content producers and distribution outlets that allows producers to make their content available to a large number of websites, thus increasing their potential readership, traffic to their site or click-throughs on affiliate links in the article.
Targeted Marketing: A marketing strategy with the goal of presenting the ideal offer to the right customer at the right time.
Text Link: A link that is embedded in text.
Tracking Code: The hidden 1x1 pixel code placed on the confirmation page of a merchant’s online store to track sales conversions.
Two-Tier: An affiliate marketing model that allows affiliates to sign up additional affiliates below themselves. When the second-tier affiliates earn a commission, the affiliate above them also receives a percentage of the commission.
Unique Click: The process of counting only distinctly different clicks from each visitor. Unique clicks are typically tracked by recording the IP address and browser header.
Viral Marketing: The rapid adoption of a product or sharing of an offer through word-of-mouth (or word-of-email) networks.
Extensible Markup Language (XML): A general-purpose specification for creating custom markup languages. It is different from HTML because it allows the user to define the mark-up elements. It is commonly used in applications like RSS feeds and search engine sitemaps.