Affiliate – A website owner that earns a commission for referring clicks, leads, or sales to a merchant.
Affiliate Agreement – Terms between a merchant and an affiliate that govern the relationship.
Affiliate Information Page – A page (or pages) on your website that explains, clearly and concisely, what your affiliate program is all about.
Affiliate Link – A piece of code residing in a graphic image or piece of text that is placed on an affiliate’s web page, notifying the merchant that an affiliate should be credited for the customer or visitor sent to their website.
Affiliate Manager – The manager of an Affiliate Program who is responsible for creating a newsletter, establishing incentive programs, forecasting and budgeting, overseeing front-end marketing of the program, and monitoring the industry for news and trends.
Affiliate Program (also an “Associate”, “Partner”, “Referral”, or “Revenue Sharing Program”) – A plan where a merchant pays a commission to an affiliate for generating clicks, leads, or sales from a graphic or text link located on the affiliate’s site.
Affiliate Program Directory – A list of affiliate programs, featuring information such as the commission rate, number of affiliates, and affiliate solution provider. Associate-It, AssociatePrograms.com and Refer-it are among the largest Affiliate Program Directories.
Affiliate Solution Provider – A company that provides the network, software, and services needed to create and track an affiliate program.
Associate – A synonym for “affiliate.”
Auto-Approve – An affiliate application approval process where all applicants are automatically approved for an affiliate program.
Auto-Responder – An email feature that automatically sends an email message to anyone who sends it a message.
Banner Ad – An electronic billboard or ad in the form of a graphic image that comes in many sizes and resides on a website’s web page. Banner ad space is sold to advertisers to earn revenue for the website.
Browser – A client program (software), such as Internet Explorer, Firefox, Chrome, or Opera, that is used to look at various kinds of Internet resources.
Charge Back – An incomplete sales transaction (i.e., merchandise is purchased and then returned) that results in an affiliate commission deduction.
Click & Bye – The process in which an affiliate loses a visitor to the merchant’s site once they click on a merchant’s banner or text link.
Client – A software program that is used to contact and obtain data from a server software program on another computer, often across a great distance. Each client program is designed to work with one or more specific kinds of server programs, and each server requires a specific kind of client. A Web browser is a specific kind of client.
Co-branding – The situation where affiliates include their own logo and branding on the pages to which they send visitors through affiliate links.
Collaborative Commerce Networks – An organization of merchants and websites that work together as true business partners. Merchants give their affiliates the same support that manufacturers would give to their resellers.
Commission – The income an affiliate receives for generating a sale, lead or click-through to a merchant’s website. Sometimes it is called a “referral fee,” a “finder’s fee” or a “bounty.”
Context-centric – The process of matching your product or service offer closely to the visitors of an affiliate’s site. By placing the product or service in-context (closely related to the content it’s next to), more people will buy.
Contextual Link – The integration of affiliate links with related text.
Contextual Merchandising – The act of placing targeted products near relevant content.
Conversion Rate – The percentage of clicks that result in a commissionable activity (sale or lead).
Cookies – The small files stored on the visitor’s computer, which record information that is of interest to the merchant site. With affiliate programs, cookies have two primary functions: to keep track of what a customer purchases, and to track which affiliate was responsible for generating the sale (and is due a commission).
CPA (Cost Per Action) – The cost metric for each time a commissionable action takes place.
CPC (Cost Per Click) – The cost metric for each click to an advertising link.
CPM (Cost Per Thousand) – The cost metric for one thousand banner advertising impressions.
CPO (Cost Per Order) – The cost metric for each time an order is transacted.
Customer Bounty – The merchant payment to an affiliate partner for every new customer that they direct to a merchant.
E-mail Link – An affiliate link to a merchant site in an email newsletter, signature, or a dedicated email blast.
E-mail Signature (Sig File) – The signature option allows for a brief message to be imbedded at the end of every email that a person sends.
eZine - The short term for an electronic magazine. Some eZines are simply electronic versions of existing print magazines, whereas others exist only in their digital format.
FAQ (Frequently Asked Questions) – A document that answers the most common questions on a particular subject.
HTML code – The code used to build web pages. Affiliates use HTML code to put links on their websites. Affiliate solution providers often provide a tool where affiliates can simply copy the code for an affiliate link and paste it into their own HTML pages.
Hybrid Model – An Affiliate commission model that combines payment options (i.e., CPC & CPA).
Impression – An advertising metric that indicates how many times an advertising link is displayed.
In-house – An alternative to using an affiliate solution provider; building affiliate program architecture within a company.
Lifetime Value of a Customer - The amount of sales in dollars that a customer will spend with a particular company over their lifetime.
Manual Approval – An Affiliate application approval process where all applicants are manually approved for an affiliate program.
Merchant – An online business that markets and sells goods or services. Merchants establish affiliate programs as a cost-effective method to get consumers to purchase a product, register for a service, fill out a form, or visit a Website.
Mini-site – A prefabricated HTML page for affiliates that displays new or specialized products with integrated affiliate links.
Pay-Per-Click – A program where an affiliate receives receive a commission for each click (visitor) they refer to a merchant’s website. Pay-per-click programs generally offer some of the lowest commissions (from $0.10 to $0.25 per click), and a very high conversion ratio since visitors need only click on a link to earn the affiliate a commission.
Pay-Per-Lead – A program where an affiliate receives a commission for each sales lead that they generate for a merchant website. Examples would include completed surveys,memberships, contest or sweepstakes entries, downloaded software demos, or free trials. Pay-per-lead generally offers midrange commissions and midrange to high conversion ratios.
Pay-Per-Sale – A program where an affiliate receives a commission for each sale of a product or service that they refer to a merchant’s website. Pay-per-sale programs usually offer the highest commissions and the lowest conversion ratio.
Residual Earnings – The 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 Spending) – The amount of revenue generated for every dollar spent on advertising. For instance, a ROAS of $1 means you’re generating $1 in sales for every $1 in advertising spend, and a ROAS of $5 means you generate $5 in sales for every $1 in spending.
ROI (Return on Investment) – The amount of money that an investment makes. The higher the sales, the large the number of shoppers and the greater the profit margin generated by sales and thus the better the ROI.
Server - A computer, or a software package, that provides a specific kind of service to client software running on other computers. The term can refer to a particular piece of software, such as a WWW server, or to the machine on which the software is running. For example, “Our mail server is down today, that’s why email isn’t getting out.” A single server machine could have several different server software packages running on it, thus providing many different servers to clients on the network.
Spam - The electronic junk mail or junk newsgroup postings, generally email advertising for some product sent to a mailing list or newsgroup.
Storefront – A prefabricated HTML page for affiliates that displays new or specialized products with integrated affiliate links.
Super Affiliates – The top 1% of affiliates, based on performance and earnings, that generate the lion’s share of the revenue for your program. They are born marketers and are very successful with the affiliate program they promote from their sites.
Targeted Marketing – The act of offering the right offer to the right customer at the right time.
Text Link – A link that is not accompanied by a graphical image.
Tracking Method – The way that a program tracks referred sales, leads or clicks. The most common are by using a unique web address (URL) for each affiliate, or by embedding an affiliate ID number into the link that is processed by the merchant’s software. Some programs also use cookies for tracking.
Two-tier – An Affiliate marketing model that allows affiliates to sign up additional affiliates below themselves, so that when the second tier affiliates earn a commission, the affiliate above them also receives a commission. Two-tier affiliate marketing is also known as MLM (Multilevel Marketing).
Viral Marketing – The rapid adoption of a product or passing on of an offer to friends and family through word-of-mouth (or word-of-email) networks. Any advertising that propagates itself the way viruses do.
Author: Douglas Blackwell
