Affiliate Marketing Glossary

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Above the Fold: the area of a Web page or email that is immediately visible to a user without scrolling down. The area above the fold depends on the resolution of a visitor’s computer screen. Content (including advertising) within this area is deemed of greater value, as users encounter and interact with it first.

AdSense: Part of the AdWords CPC advertising model from Google that pays publishers and affiliates for displaying ads. Payment to the affiliate is determined based on the number of clicks made by users and the advertiser’s bid price for the ad.

Advertiser: The company or organization that is promoting products or services for sale; also knows as the merchant. The advertiser or merchant pays affiliates for sending traffic to the merchant’s website for the purchase of the products or services.

Affiliate: A website owner that earns a commission or finder’s fee for referring clicks, leads or sales to a merchant.

Affiliate Agreement: Terms between a merchant and an affiliate that govern the relationship. This includes the terms on which the affiliate will be rewarded for sending users to the merchant’s website.

Affiliate Link: A URL tracking link that identifies the affiliate and sends traffic to the merchant’s website. For example, a link might look like this: These links are unique in order to identify and track the user traffic coming from the particular affiliate site. Typically, the tracking links can display to users as simple text links, images, or product links.

Affiliate Manager: The person responsible for running the merchant’s affiliate program. This can include recruiting affiliates, establishing incentive programs, creating media for the affiliates, reporting on sales, paying affiliates and more.

Affiliate Program: Can also be called an associate program, partner program, referral program or revenuesharing program. In such a program the merchant rewards the affiliate for users sent to the merchant’s website based on quantity of visits, sales or leads on a pay-per-click, pay-per-sale or pay-per-lead basis.

Affiliate Program Directory: A comprehensive listing of merchants’ affiliate programs. The directories are typically categorized by industry or field and include the payout or commission rates.

Affiliate Network: The intermediary between affiliates and the merchants who connects and administers the affiliate programs of many merchants. Networks normally offer services to both affiliates and merchants, including reporting and payment services.

Affiliate Software: Used for running and managing an affiliate program, this typically includes signing up affiliates, managing links, tracking impressions, clicks, sales and leads. This also includes calculating earnings and making payments to affiliates.

Affiliate Solution Provider: A third-party company that provides an affiliate tracking solution on a hosted basis. Typically, an affiliate software solution is hosted by the affiliate with the affiliate’s website. With an affiliate solution provider, however, they provide the hosting for you.

Affiliate Tracking: The process of tracking user activity a link uniquely by using an affiliate link.

Associate: Synonym for affiliate.

Auto-approve: Affiliate application process whereby all applications are immediately approved upon submittal by the affiliate. This term can also be used to describe the process of automatically accepting all sales recorded by affiliates.

Auto-responder: An email, or series of emails, that are automatically sent to a new subscriber. In the context of affiliate programs, auto-responder refers to emails that often come in the form of a newsletter series or minicourses.

Banner Ad: An electronic advertisement promoting a product, service or website that uses an image format such as an animated GIF, Flash Movie or JPEG.

Browser: A client program (software), such as Internet Explorer, Netscape or Opera, that is used to look at various kinds of Internet resources.

Charge Back: An invalid sale that results in the affiliate’s commission being forfeited.

Click Fraud: The practice of artificially generating user traffic to advertisers’ sites either manually or through the use of automated clicking programs called hitbots. The advertiser pays for traffic that has no potential for generating revenue, though the perpetrator of the fraud the scammer receives a percentage of the pay-per-click fees paid by the advertiser.

Click-fraud Monitoring: Services that provide independent monitoring of clicks from your PPC campaigns. If you suspect fraudulent activity, it may be possible to request a refund.

Click-through: The action that occurs when a user clicks on a link and follows through to the merchant’s website.

Click-through Rate (CTR): Ratio of visitors who after an ad is displayed to them, click on a link and then visit the advertiser’s website.

Co-branding: Situation where affiliates are able to include their own logos and branding on the pages to which they send visitors through affiliate links.

Commission: Income an affiliate earns for generating a sale, lead or click-through to a merchant’s website. Sometimes called a referral fee, a finder’s fee or a bounty.

Cookies: Small text files stored on the visitor’s computer that record information of interest to merchants. In affiliate software, cookies are utilized to track which affiliate the Web visitor came from and which banner or link they clicked. They can also store the date/time of the click for purposes of tracking the time elapsed between a click and a conversion to a sale or lead.

Cookie Expiration/Cookie Retention: When a cookie is planted on a Web browser, a date when the cookie expires is defined. This date is important because affiliate sales can only be recorded before the cookie expiration date. This period will also determine if repeat sales will be recorded.

Conversion: When visitors to a website complete a site goal, usually redirecting them to the merchant site, signing up for an offer or purchasing a product.

Conversion Rate: Percentage of clicks that result in a commissionable activity such as a sale or lead.

CPA (Cost Per Action): A method for affiliates to earn money by getting visitors to their site to perform an action, such as signing up to a merchant’s email newsletter. Essentially, it involves being paid for obtaining leads.

CPC (Cost Per Click): Cost of an individual click to an advertiser when paying on a per-click basis. Also known as PPC, pay per click.

CPM (Cost Per Thousand): Because M is the roman numeral for 1,000, this represents the cost per thousand page impressions for advertisers. For ad publishers, it refers to revenue earned.

CPO (Cost Per Order): Same as CPA, cost per action, but refers specifically to sales.

Customer Bounty: What the merchant pays the affiliate partner for every new customer directed to the merchant’s site.

Data Feeds: Information provided by merchants to affiliates 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 take the information in the feed and build individual pages for each product, or put multiple products on each page.

Double Opt-in: Also known as verified opt-in. A term used in email marketing to describe the process of someone who voluntarily signs up for mailing list. Double (or verified) opt-in requires that subscribers confirm their subscription by clicking a link in an email sent to them before their subscription is completed. Required under anti-spam laws in several countries.

Email Link: An affiliate link to a merchant site in an email newsletter, signature or a dedicated e-mail blast.

Email Marketing: The practice of acquiring, managing and marketing to potential buyers using a list of email addresses (and their corresponding personas). The ultimate goal is to increase engagement, click-throughs to a website, or purchases from a website.

EPC (Earnings Per Click): A commonly used metric for working out how much commission is payable to an affiliate for each click that has been performed on their tracked link. It can also sometimes be used to show how much a merchant has generated in revenue for each click that an affiliate has referred to them.

Effective Cost Per Mille (eCPM): A measure of what would be earned per thousand impressions, which is used in place of CPM when CPM cannot be worked out for any reason. This can include a situation when 1,000 impressions have not been served but you want to work out which ad you are using is most profitable from an impression basis.

Exclusivity: A merchant that stipulates exclusivity in their affiliate agreement usually prohibits the affiliate from promoting competing products on their site. Exclusivity is often to the benefit of the merchant and not advisable for affiliates in a niche market.

Feeder Site: A website that has been set up for the sole purpose of redirecting, feeding and tracking traffic to another site.

HTML code: Refers to the lines of code that an affiliate places on their Web page or pages for linking to the merchant’s site. This HTML code contains the unique identifier that confirms the traffic is coming from the affiliate’s website.

Impression: An impression or page impression is recorded every time a page is loaded. It is an effective way of measuring the number of times that a page and the content and ads on that page are viewed.

In-house: An alternative to using an affiliate solution provider, this refers to building and managing your own affiliate program internal to your company. Typically, this is accomplished by purchasing a third-party software or solution.

Joint Venture (JV): A general partnership typically formed to undertake a particular business transaction or project rather than one intended to continue indefinitely.

Keywords: Terms that summarize a topic and are used by Internet searchers when looking for information. Keyword phrases are classified as multi-term words.

Link Cloaking: A technique of hiding the real destination of a hyperlink.

Link Farm: A website set up for the purpose of creating links to other sites to improve search ranking. Link farms are generally viewed negatively within the industry.

Long Tail: A term used to describe keywords that are more obscure and focus on smaller volumes but more qualified searches. They are often targeted by affiliate marketers due to the lower competition for these words and phrases.

Manual Approval: Refers to the process of validating affiliate applications and then approving them after validation. This can also refer to the process of approving sales after they have been validated.

Merchant: The organization selling the goods or service is referred to as the merchant. The merchant pays affiliates for sending traffic to their website to purchase a product or service.

Multi-level Marketing (MLM): Also known as network marketing, MLM involves the sale of products through a group of independent distributors who buy wholesale, sell retail, and sponsor other people to do the same.

Pay-Per-Sale: An affiliate marketing program that rewards affiliates based on each conversion to a sale, such as when visitors from the affiliate’s site are purchasing a product or service from the merchant’s website. Pay-per-sale programs usually offer the highest commissions but tend to have the lowest conversion rates.

Pay-Per-Lead: Affiliate program that rewards affiliates for conversions to leads. A lead might include a signup form, software download, survey, contest or sweepstakes entry, or signup for a trial. Pay-per-lead generally offers midrange commissions and midrange to high conversion ratios.

Pay-Per-Click: Rewards an affiliate for each unique click to the merchant’s website. This type of affiliate program is less common because of click fraud or fake clicks.

Performance-based Marketing: Marketing in which the merchant only pays commissions for results such as conversions to sales or leads.

Performance Incentive: A performance incentive is given to affiliates occasionally by merchants to encourage the affiliate to push the merchant’s products, services or site more effectively. This can take on any form of incentive but common methods will be prizes for extra sales, or tiered commission structures that usually define a target transaction or transaction value to be met in order to receive extra bonus commissions, often for a limited


Product Rights: Digital products are often sold with different rights that determine how the buyer can use the product. Product rights are categorized as private-label rights (PLR), resell rights (RR) wherein branding stays intact, and master resales rights (MRR) that allow affiliates to resell the product and gives others the right to resell those products.

Recurring Commissions: The process of rewarding an affiliate on a recurring basis whenever the merchant charges a customer 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: Programs that pay affiliates not just for the first sale a shopper from their site makes, but for all additional sales made at the merchant’s site over the life of the customer.

ROAS (Return on Advertising Spending): This is the amount of revenue generated for every dollar spent on advertising. For instance, a ROAS of $1 means you are 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): This is what all marketing managers want to see from the money they invest in their marketing and advertising campaigns. The higher the sales, the larger the number of shoppers and the greater the profit margin generated by sales – the better the ROI.

Search Engine Optimization (SEO): The practice of working to improve, or optimize, a website to be positioned higher on the search engine results pages (SERPs) for chosen keywords.

Sitemap: HTML files that provide users a humanreadable list of pages and website sections used 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: Refers to unsolicited commercial email (UCE) or unsolicited bulk email (UBE). Unsolicited email is email that you did not request, and most often contains advertisements for services or products.

Spider Detection: The process of detecting and ignoring automated spiders or bots such as search engines like Google/Googlebot.

Spyware: Also known as adware, a program hidden within software that transmits user information to advertisers via the Internet.

Super Affiliates: The highest performing affiliates. Typically less than 1 percent of affiliates are super affiliates, yet that 1 percent will typically bring in more than 90 percent of a merchant’s sales.

Syndication: Content syndication involves a partnership between content producers and distribution outlets. It allows producers such as article writers to make their content available to a large number of websites (distribution outlets), increasing their potential readership, traffic to their sites or click-throughs on any affiliate links in their articles.

Targeted Marketing: Offering the right offer to the right customer at the right time.

Tracking Method: The way that a program tracks referred sales, leads or clicks. The most common methods are by using a unique Web address (URL) for each affiliate, or by embedding an affiliate identification number into the link that is processed by the merchant’s software. Some programs also use cookies for tracking.

Text Link: A link that is not accompanied by a graphical image.

Tracking Code: Refers to the hidden 1×1 pixel tracking code that is placed on the confirmation page of your store for tracking sales conversions.

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 one.

Unique Click: The process of only counting unique clicks from each Web visitor. Unique clicks are typically tracked by recording the IP address and browser header.

Viral Marketing: The rapid adoption of a product or passing on of an offer to friends and family through word-of-mouth (or forwarded email) networks. Any advertising that propagates itself the way viruses do.

XML (Extensible Markup Language): A generalpurpose specification for creating custom markup languages. It is different from HTML because it is extensible (X), or allows the user to define the mark-up elements. It is used in different applications such as RSS feeds and search engine sitemaps.

Affiliate 360 from Website Magazine