Affiliate Marketing Terms
Part of educating yourself about any marketing medium is understanding the jargon. It is easy to get caught up in alphabet soup. It will be difficult to select the proper mediums for your marketing strategy if you do not have some level of understanding about the medium. Education is part of the puzzle. Listed below are several terms related to affiliate marketing. This is not meant to be an exhaustive list but it will give you the basics. As always consult your marketing coach for more information.
Affiliate marketing is a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate’s marketing efforts. Examples include rewards sites, where users are rewarded with cash or gifts, for the completion of an offer, and the referral of others to the site. Source: Wikipedia
A publisher, also known as an affiliate or reseller, is an independent party that promotes products and services of an advertiser in exchange for a commission on leads or sales. A publisher displays an advertiser’s ads, text links, or product links on their Web site, in e-mail campaigns, or in search listings. The publisher is paid a commission by the respective advertiser when a visitor takes a specific action such as filling out a form, subscribing to a service (both lead examples) or making a purchase (a sale).
An advertiser, also known as a merchant or retailer, is a Web site or company that sells a product or service online, accepts payments and fulfills orders. Advertisers partner with publishers to help promote their products and services. Publishers place advertisers’ ads, text links, or product links on their Web sites or include them in e-mail campaigns and search listings in exchange for commissions on leads or sales.
Paying for actions taken by a consumer as they occur on the Internet, rather than paying up front for advertising space. Any type of revenue sharing program where a publisher receives a commission for generating a lead or sale for an advertiser.
A commission payout is an amount of income received by a publisher for some quantifiable action such as selling an advertiser’s product and/or service on the publisher’s Web site.
Click-through (also called click)
A click-through refers to the action a consumer takes when they are referred from one Web site through a link or advertisement and is taken to another Web site. Click-through ratio is the percentage of clicks for the number of advertising impressions displayed.
CPA (cost per action)
CPA is a metric for online advertising where a rate is set for every action that is taken by a user.
CPM (cost per thousand impressions)
CPM is a metric for online advertising where a rate is set for every thousand impressions.
An impression is the viewing of an advertising banner, link, or product on the Internet.
The conversion rate is the percentage of visitors who take a desired action. The action that determines conversion is determined by the advertiser and may be a sale on the advertiser’s Web site, a completed lead form, or another action.
Source: All terms unless specified were taken directly from Commission Junction one of the four large players in the Affiliate marketing space (more on CJ on Day 4).