Understanding the Terms and Language Associated with Affiliate Marketing
By Chadrack at 9 October, 2008, 11:11 am
In the first part of these series I focused on the general understanding of affiliate marketing. Follow this link to read it: Affiliate Marketing As a Home Based Marketing Business Model. However, in this post our focus will be terms and language associated with affiliate marketing.
If you’re new to the concept of affiliate marketing there is definitely a lot you’ll need to know about the terms and language you’ll be dealing with. Some of these you may be encountering for the first time. It is important therefore that you understand what it all means, to ensure that you are signing up for programs that are worth your time.
Something you must understand is, it is important to read the terms and conditions for affiliates. Sometimes, you will be presented with those terms before you sign up, and sometimes you will be presented with them after you sign up – but it is important that you read them, and it is important that you understand what is being said.
It is also important that you understand what the following terms or abbreviations mean:
Affiliate Link – This the URL or link that is assigned to you by the affiliate program. This is the link that you will promote, as it is used to track your clicks and sales.
Contextual Link or Text Link – A contextual link is a link that looks like content, because it is all text. It may be several words long. A text link is a link such as www.link.com , as opposed to a banner ad.
Charge Back – This will be an important term to you. This refers to when customers cancel their orders, or have their credit card companies reverse the charges. It basically means that you lose a sale. Some affiliate programs will hold money back each pay period to cover potential charge backs/refunds, and release that money to you after a specified period.
SPAM – Unsolicited Commercial Email. This term also refers to commercial posts on forums and blogs. Most affiliate programs will have strict anti-spam regulations that you must follow.
Revenue Sharing Program – This is the same thing as an affiliate program.
Co-Branding – Some affiliate programs offer co-branding options, where your company name or logo is placed on a reseller’s website, or on the product itself.
Referral Link – It is the same as an affiliate link.
Tracking – The method or software used to record sales, clicks, leads, and other information that has to do with your affiliate link. The affiliate merchant takes cares of this to enable them determine how much is due to you at a particular time.
HTML or HTML Code – HTML stands for Hyper Text Markup Language. This is the programming language used to build webpages. HTML code generally refers to a small portion of HTML code, such as that needed to place affiliate links or banners on your webpages.
Partner Program – This is the same thing as an affiliate program.
Super Affiliate – This refers to anyone who is making a lot of money in affiliate marketing. However, if you have an affiliate program for your own product, this refers to your top affiliates – the ones who are making the most sales for you.
1st Tier and 2nd Tier – If you are signing up for an affiliate program, directly through the company, you are first tier. If you are signing up under someone else, you are 2nd tier. However, when someone signs up under you, you are first tier, and they are your 2nd tier. Each tier gets a different commission rate for sales. In other words, when you sign up under someone else, when you make a sale, you get a full commission, and the person you signed up under gets a partial commission.
Cookies – A cookie is a piece of code that is written to the cookie file on a person’s computer when they click on an affiliate link – or when they visit sites that use cookies, such as sites that require a login. The cookie does not harm your customer’s computer at all, and is simply there to make sure that you get credit for the sale if they come back later to make a purchase.
Affiliate Agreement – The agreement that usually lists the terms and conditions related to an affiliate program. In most cases, you will agree to the affiliate agreement by checking a box when you fill out an online form to join the program. Some affiliate programs, however, will require you to print out, sign, and fax the agreement. Make sure you read these agreements.
Conversion Rate – This is the number of sales in relation to the number of clicks received. Usually portrayed as a percentage.
Commission – The amount of money that you as an affiliate will receive per sale. Some companies will list this as a percentage, such as 50%, while others will list it as a dollar figure.
CPC – Cost per click. This relates to how much it costs for each click an ad or link receives when advertising on a CPC basis. In other words, instead of paying a flat rate for the advertisement, you would pay a certain amount of money for each click the ad receives.
PPC – Pay Per Click. This relates to CPC, where you pay for each click that your ad or link receives. Google AdWords is an example of Pay Per Click advertising.
CPA – Cost per action, or cost per acquisition. Basically, this means that you will pay each time an action is taken. The action may be a click, a sign up, or a sale. In fact, many affiliate programs also pay on a CPA basis, meaning that each time someone clicks on your link, or signs up to receive information through your link, you earn a little money. Google AdSense is an example of this.
CTR – Click Through Rate. This number is usually represented as a percentage, and it refers to the number of times your ad was clicked on, in relation to how often the ad was viewed.
If you come across other terms or abbreviations that you aren’t sure of the meaning of, make sure that you stop and go find out what it means before agreeing to anything – or before doing anything. Not knowing can cause problems later.
All in this series:
1. Affiliate Marketing As a Home Business Model
2. Terms and Language Associated with Affiliate Marketing
3. Sourcing for the best Pay Affiliate Programs
4. Insider Tips for Succeeding as an Affiliate
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