The affiliate marketing dictionary
If you decide to start with affiliate marketing, as an advertiser or affiliate, you have an exciting time ahead of you. You’re probably spending a lot of time researching affiliate marketing because you want to get off to a good start. Or maybe you’ve already started with setting up your own affiliate marketing program. Whatever the case, chances are that you’ve come across loads of new terms. Terms that are easy to understand for affiliate veterans, but may be harder for someone who’s new to the game. In order to help you find your way in all the affiliate marketing lingo, we’ve created this affiliate marketing dictionary. In this dictionary, we’ll explain the most commonly used terms in affiliate marketing for you.
Abbreviations
CPA, cost per action
Cost per action stands for the cost of a particular action carried out by a visitor. The term is common within affiliate marketing, but also in other forms of online marketing.
An action is almost always a form of conversion. A visitor orders a product or shows interest in it. This is also referred to as cost per sale (CPS) or cost per lead (CPL), respectively. There is also sometimes talk of cost per acquisition.
CPC, cost per click
CPC, also known as Cost per Click, is a payment model for online advertisements. This is perhaps the most well-known form of payment for online advertising and is based on clicks. Each time the ad is clicked, an amount will have to be paid by the advertiser.
CPCV, cost per completed view
This is the amount an advertiser pays to the affiliate for every time a consumer completely viewed a video.
CPL, cost per lead
CPL, also known as Cost per Lead, is a payment model for online advertisements per lead. A lead can be an e-mail address, a requested quotation, or a completed contact form. In this case, no actual purchase has been made yet, but a potential customer is looking for more information about a product or service.
CPM, cost per mile
CPM stands for “cost per mille” and is used to calculate costs when planning media advertising. The term is used for advertising via various media. CPM stands for the price per 1000 impressions or views.
This is the price the advertiser wants to pay to have his advertisement shown 1000 times to potential customers.
CPS, cost per sale
CPS, also known as Cost per Sale, is a payment model that is used for (online) advertisements. When a product or service has been purchased, a pre-agreed amount is paid by the advertiser.
The payment model based on CPS is mainly used in the phase in which a potential client actually makes a purchase. A fee is then paid to the ‘publisher’ of the advertisement.
OBA, Online behavioral advertising
A way of advertising in which you target people on the internet based on their past behavior on the internet.
PPC, pay per click advertising
PPC is a form of advertising with which the advertiser pays per click. PPC stands for Pay Per Click. With PPC you pay for every visitor who clicks on your advertisement.
A good example is Google AdWords; these are the ads you see above the free search results in Google. Here, advertisers often also pay per click.
ROI, return on investment
Return On Investment (ROI) indicates the return on investment. If the investment results in a loss, the return on investment is a negative figure. Calculating the ROI provides insight into how certain marketing channels and marketing activities contribute to the overall success.
If you want to calculate a ROI you can use the following formula:
ROI = (income – (marketing) expenses / (marketing) expenses
Affiliate terms
Affiliate
The affiliate, or publisher, is the person who tries to sell the products of the advertisers using his or her own channels. Affiliates may forward visitors to the advertiser using the promotional material provided by the advertisers. If, as a result of this, a sale takes place in an advertiser’s webshop, the affiliate will receive the predetermined fee for this.
Affiliate agreement
The affiliate agreement is the terms of service the advertiser and the affiliate agreed upon. The agreement is a definition of their relationship. It specifies what the responsibilities of each party are, and what the agreements are about payouts and commissions.
Affiliate link
An affiliate link is a link that informs the advertiser through which affiliate a sale has taken place. In this way, the affiliate marketer receives the commission to which he or she is entitled. An affiliate link is always unique and can be ‘picked up’ from the various affiliate marketing networks.
Affiliate marketing
We wrote an extensive blog about Affiliate Marketing, and how it works.
You can read it here. We advise reading that if you want to learn more about affiliate marketing. But in short; The basics of affiliate marketing is that you earn a commission every time you make a sale by promoting someone else’s products or services. Or that you pay a commission every time someone makes a sale on your products or services.
With affiliate marketing, the branding and marketing of products and services are spread out between different parties. This allows a brand to utilize the talents of individual publishers in their marketing while providing these individuals with a share of the profit.
Affiliate network
An affiliate network is a place where advertisers and affiliates come together. On an affiliate network, you will find companies that make their services and products accessible for affiliates to promote. And affiliates that are looking for products and services to promote.
The different parties in affiliate marketing
Advertiser
The advertiser is the owner of the product or service that is going to be sold through affiliate marketing. This can be a large enterprise or a solo entrepreneur. The product or service can be anything, from kitchen utensils to magazine subscriptions or online classes.
Affiliate, or publisher
The affiliate, or publisher, is the person who tries to sell the products of the advertisers using his or her own channels. Affiliates may forward visitors to the advertiser using the promotional material provided by the advertisers. If, as a result of this, a sale takes place in an advertiser’s webshop, the affiliate will receive the predetermined fee for this.
Consumer
The consumers may not be aware of it, but they are the driving force behind affiliate marketing. Without consumers, there’s no audience to share the products with.
When the consumer buys a service or product via the affiliate, the affiliate and the advertiser share the profit. A lot of affiliates these days choose to share that they are affiliate marketers. You may have seen this via social media posts that say #affiliate, #partnership, or #ad. Some publishers do not disclose that they are an affiliate marketer, in which case the consumer doesn’t know that their purchase is part of an affiliate marketing program.
Other common (affiliate) marketing terms
Above the fold
When you open a webpage, everything you see without scrolling down is called ‘above the fold’. This is the first thing a visitor sees when opening a webpage, that is why content and ads above the fold are desired, and often more expensive.
Click Fraud
Click fraud is when you’re artificially attempting to inflate the number of clicks that an ad receives, to make it appear that a lot of visits are being made or traffic received in order to mislead the affiliate’s success metrics and take home more commission. This is not only frowned upon, it’s forbidden.
Click-Through Rate
The click-through rate measures how many people that saw your ad, actually clicked on it. If you showed your advertisement to 1.000 people, and 100 clicked on it, you have a click-through rate of 10%.
Commission
An affiliate commission is the fee you get when you successfully promote products from other people. In order to do this you need a special affiliate link. This link can be obtained by registering with an affiliate network.
Conversion rate
In general, a conversion is an action that you want visitors to perform. Think for example of the number of times the contact form has been filled out or the number of orders in your webshop. A conversion is also often expressed as a percentage (the conversion percentage or conversion ratio). This is the ratio between the number of visitors and the number of completed conversions. For example, if you have had 100 visitors to your website in a certain period of time and 5 visitors have requested a quote, the conversion rate is 5%.
Cookie
Cookies are left behind when someone browses to a certain website. They store information about that person on the webpage, such as their site preferences and buying habits. Cookies allow advertisers to see what affiliate deserves credit for a sale, even when a consumer bought a product some time after the affiliate sent him or her to the advertisers website.
Cookie expiration date
The cookie expiration refers to how long that cookie stays on a visitor’s browser. As long as that cookie is still on the user’s browser when they do finalize a purchase, the affiliate gets credit as an affiliate. Cookies will be deleted automatically once they’ve reached the expiration date. One month is the most common cookie expiration date.
Customer Lifetime value
The customer lifetime value is a metric that predicts the value of the average customer. The question you have to ask is: how much turnover will this customer generate individually for your company. The longer a customer buys from your company, the more his value will increase, the higher his lifetime value will become. Logical, isn’t it?
First party cookies
First-party cookies are issued by a website that a user views directly. So when a user accesses a website, for example forbes.com, this site creates a cookie which is then stored on the user’s computer.
Impression
Every time a user sees your content or advertisement it counts as an impression. The user doesn’t have to do anything.
Native advertising
Native advertising is a form of advertising, usually in online media but also in printed media, which in form and function resembles an ordinary item on the platform in which it appears. In several cases, it appears as either an article or a video created by an advertiser with the specific intention of promoting a product, while resembling in form and style the work of the editorial staff of the platform.
Niche
A niche is a specific industry, service, or product that an affiliate promotes and works with. A niche can be anything, like gadgets, kitchen utensils, or online courses. A niche is specific, so the affiliate can focus all their efforts on a certain industry, product or service. Finding the right niche is crucial for an affiliate marketers success.
Performance based marketing
Performance based marketing means you’re getting paid for your performance. This means you can earn really well, if you’re performing good. It also means a no cure no pay method for whoever hired you. Affiliate marketing is a form of performance based marketing.
Pixel
A pixel can be placed on the thank-you page by the advertiser. This pixel allows the affiliate network to determine whether the transaction was generated via an affiliate and, if so, to allocate a fee.
Poor quality traffic
Affiliates sending poor quality traffic run the risk of closing their account with their affiliate network. In affiliate marketing, good quality traffic is far more important than large volumes of it. A large amount of poor quality traffic that ends up on an advertiser’s website can make it difficult and slow. It is therefore important to comply with this rule. Poor quality traffic can be caused by the use of PPC advertising directly to a landing page or by the use of ‘paid to surf’ traffic platforms.
Pre-sell
When you’re preselling, you’re making your website visitor wanting or needing a product before they leave to the sellers page. Basically, you’ve sold them the products in their minds, before they actually bought it. This is a great way to increase your affiliate revenue.
Third party cookies
On the other hand, third-party cookies are not created by the website visited, but by someone else. What does this mean in practice? Let’s say you visit forbes.com, and that site has a YouTube video on one of the pages. In this case, YouTube sets a cookie which is then stored on your computer.
Traffic source
A traffic source is every place that sends visitors to your website. It can be an affiliates blog, a promotion site, Google, or an advertisement. By knowing where your traffic comes from, you know which campaigns are successful and which are not.
