Affiliate Marketing: Glossary of Every Day Terms

The affiliate marketing industry has its own lingo, and for someone just starting out, it can feel a bit overwhelming to catch on. To help guide you into the affiliate marketing community, we’ve created a quick guide of common terms.

General Terms

• Advertiser: A company that sells a product or service, accepts payments, and fulfills orders online. Advertisers (also known as merchants) partner with affiliates to help promote their products and services. The advertiser or merchant pays affiliates for sending traffic to the merchant website.
• Affiliate: A website owner that earns a commission for referring clicks, leads or sales to a merchant
• Affiliate Agreement: When you start a new affiliate relationship, you will receive an affiliate agreement from the merchant. This agreement outlines the rules, expectations, responsibilities and other legalities on both sides of the relationship.
• Affiliate Link: This is the URL link that will be provided to you by your merchant. It is a unique link that will identify you as the affiliate when sending traffic to the merchant’s website. Without this link it won’t be possible to track the traffic and/or the sales generated by your affiliate marketing efforts.
• Affiliate Marketing: Any type of revenue-sharing program in which a publisher receives a commission for generating online actions (such as leads or sales) for an advertiser; also called performance-based marketing, partner marketing, CPA, associate program, or pay-for-performance program.
• Affiliate Network: There are several third-party networks that help merchants manage their affiliate program on their behalf. Affiliate networks are responsible for recruiting appropriate affiliates. They provide the back-end technology for tracking conversions and reporting on performance. They also ensure that affiliate commissions are paid out on time. Affiliate networks are helpful for exposing merchants to a wider network of potential affiliates.
• Affiliate Program: When a merchant offers a program that allows individuals (i.e. affiliates) to refer people to their products and/or services, it is known as an affiliate program. In return for referrals, the affiliate is paid a predetermined commission.  Multiple Tier Affiliate Programs are when affiliates who refer other affiliates earn commission off of those affiliates.

Website Terms

• Above the Fold: This is the section of the website that a viewer can see on their browser without having to scroll down.
• Cookies: In affiliate marketing, cookies are used to assign an ID to the user in order to track the conversion as coming from you, the affiliate. Cookies are valid for a certain period of time, so if the user comes back later to complete a conversion, it will still be attributed to you.
• Cookie Expiration/Retention: Standard cookie lengths are 30–90 days; however, you will find some that are less. If a user makes a purchase within the cookie expiration/ retention period, the conversion will still be attributed to you, the affiliate.
• Direct/ Deep Linking: Allows a publisher to hyperlink directly to a specific product or service webpage on the advertiser’s website, which can cut out the step of going to the publisher’s page/website first. This can help with your search engine ranking.
• Homepage: The “front” main page of a website.
• HTML/ Tracking code:  Refers to the lines of code that an affiliate places on their web page(s) for linking to the merchant’s site. This HTML code contains the unique identifier that identifies the traffic as coming from the Affiliate’s web site.
• Landing Page: A simple one page website, or one page inside of a larger website with s specific target.
• Platform for Privacy Preferences (P3P) Policy: A protocol allowing websites to declare their intended use of information they collect about web browser users. It is designed to give users more control of their personal information when browsing.  P3P also assists with online sales. It lets users decide what specific data they are willing to divulge automatically to the site, such as shipping address and credit card number. If the site requests more data, the browser alerts the user, who can then decide whether to share it or not.

Advertising Terms

• Ad Blocker:  Software based programs that prevent online advertisements from displaying.
• Advertiser ID:  The unique identifying number for an advertiser’s program.
• Click: When a user presses on a computer mouse or trackpad. As in “click save.” This is how advertisers often pay affiliates.
• Click Fraud:  When a person, automated script or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating a charge per click without having actual interest in the target of the ad.
• Click Through Rate (CTR):  The percentage of clicks for the number of advertising impressions displayed
• Conversion: When you refer a user to a merchant site and they successfully complete the desired action (e.g. sign up for the merchant’s website or make a purchase), it is known as a conversion.
• Conversion Rate: Percentage of clicks that result in a commissionable activity (sale or lead).
• CPA (Cost Per Action):  The amount of cost for a conversion such as a sale or lead.
• CPC (Cost Per Click): Cost of an individual click when paying on a per click basis.
• CPM (Cost Per Thousand):  The cost of 1000 banner impressions.
• CPO (Cost Per Order):  Same as CPA but refers specifically to sales.
  Impression: How many times a banner advertisement was displayed or viewed.
• Geo-Targeting:  Selective advertising in which a publisher can choose what geographical areas they want the ad to appear in. For example, if a publisher’s website focuses on snow boots and winter apparel, they may just want a certain ad to appear in places where the temperatures are lower.

Purchase Terms

• Cart Abandonment:  When a website visitor leaves an item in an online shopping cart without completing the transaction.
• Charge Back: Sometimes a customer you have referred will make a purchase, then decide to cancel (for example, the product was returned). As the final sale didn’t actually go through, the merchant will deduct the commission from the sale and the affiliate will not receive any payment for it. This is a charge back.
• Commission: The money received by an affiliate in exchange for providing referrals to a merchant’s site is known as commission. This is usually a predefined amount and is based on the desired outcome (i.e. leads, registrations, sales etc.).
• First Click vs Last Click: Say a user clicks on your affiliate link, then goes to the merchant’s website but doesn’t immediately make a purchase. A week later, the user clicks on another affiliate’s link and ends up on the same merchant’s website, but this time she makes a purchase. First click will attribute the sale to the first merchant, while last click says it was the last link the user click on that got the sale.
• Payment Threshold: Many merchants will require affiliates to accrue a certain amount of earnings before they receive pay out of their commission.
• Residual Earnings: Programs that pay affiliates not just for the first sale a shopper form their sites makes, but all additional sales made at the merchant’s site over the life of the customer.
• ROAS (Return On Advertising Spend): Metric used to determine the revenue generated per dollar spent on advertising.
• ROI (Return On Investment): In eCommerce and affiliate marketing, ROI is calculated by evaluating the money earned (or lost) against the money invested (business setup expenses, advertising costs etc.).
• White Label: Some merchants will allow affiliates to sell their products/services under their own brand. The affiliates make no mention of the merchant and visitors usually believe it is the affiliate selling the product/service. This is known as white labeling.

Are we missing any important terms?  Need us to help explain something?  Let us know in the comments below.