Affiliate Marketing Terms You Should Know
Affiliate: An affiliate is someone who promotes a product or service to potential customers, in exchange for a fixed fee as rewards for sales made.
Merchant: In affiliate marketing merchant means the
owner of a product. That’s the owner of the store I used in the analogy above.
Merchants recruits people who will help them get customers and they are willing
to give these referrals a certain percentage of the sales amount.
Most merchants handles
this system themselves and they pay the referrals directly after an agreed
amount of days as long as sale is made. Some merchants however call on some
people to handle this process for them.
Affiliate Networks: Affiliate network is a company that acts like
an intermediary between the merchants and the affiliates.
This allows the
merchants get more and more affiliates to promote their products, thereby
increasing sales. Examples of Affiliate networks include Aliexpress, Clickbank,
Amazon and Commission Junction or CJ.
Affiliate Link. Affiliate link is a series of letters and
numbers which contains unique ID numbers given to Affiliates for use in links
they place on their website. Also known as Hoplink (Clickbank) or affiliate
code or affiliate ID.
Each affiliate has
unique numbers and that’s how the merchants or affiliate networks know who
refers who to their website.
A link that includes a
TID may look something like this:
http://www.affiliatexyz.com/?tid=123.
If a visitor to an
affiliate clicks on that, he will be led to www.affiliatecodesystem.com and if
he buys the product, the owner of that site or the affiliate network
responsible knows that the affiliate with a unique ID of 123 (represented by
tid=123) is responsible for that sale. So he gets paid for the sale.
Leads: A lead, in affiliate marketing context, is a
visitor or a potential sales contact that expresses an interest in goods or
services by clicking on an affiliate link on a website.
Leads can be tracked
and the percentage of leads that buys can be calculated.
Landing Page: This is the website or sales page or online
store where the affiliate directs all leads to. This is the page that all
visitors or potential customers visit to see what the product is all about.
All merchants have a
landing or sales page and the better the design or ads on it, the better the
conversion.
Cookie: A cookie is a technology that workings with
web browsers to store up information like user preferences, login or
registration information, and shopping cart contents. Have you still opted-in
to have a website “memorize” your password and username for one of your online profiles?
That’s a cookie.
In affiliate
marketing, one job that cookies manage is to memorize the link or advertisement
the visitor to a website clicks on. Cookies can also store up the date and time
of the click, they can even be utilize to memorize what kind of websites or
content you like most.
There are lots of diverse
types of web cookies and uses, but the kind of cookie affiliate marketing
relies on is called a first-party cookie. This means that if a visitor referred
through your affiliate link does not purchase the product on their first visit,
but they come back within cookie validity period and purchase at that time, you
get paid.
Some sites have only
24 hour cookie validity period, some 30 days while some sites give lifetime
cookie validity period. Amazon cookie last only for 24 hours while Clickbank
cookie last up to 60 days.
Commission: This is the fixed fee or percentage
affiliates are paid. Commission range from 4% to about 75% depending on the
merchant or network. Amazon for example pays 4%-8.5% commission, while with
Clickbank, you can earn up to 75% commission on any digital product.
The amount you make
per sale depends on the cost price of the item more than the percentage. A $500
product on amazon can fetch you up to $40 at 8% commission while a $50 product
on Clickbank will earn you $37.5 at 75% commission.
Affiliate manager: Affiliate manager is someone that
works with affiliate networks and cover all aspects of developing and
optimizing an affiliate program. They provide expertise, identify high
potential opportunities and execute campaigns to maximize performance.
Some networks provide
affiliate managers to help affiliates in their marketing campaigns.
CPA: This means cost per acquisition or cost per
action, a payment model where an advertiser pays for each qualifying action
made by the end user in response to an ad.
Such qualifying
actions usually fall into one of these group: sales, completions of registration
or other website forms, and confirming the end user’s interest in the
advertiser’s product/service.
EPC – This means Earnings Per Click. That is
the average affiliate program’s payout, generally calculated based on one
hundred clicks. This metric is one of the key ones utilized by affiliates to
determine how attractive and promising an affiliate program is.
To calculate their
EPC, affiliates divide the total number of clicks they generate by their total
earnings. Such easy calculation gives them their earnings per click.
CTR: Click-through rate or click-through ratio. A
metrics used to measure response to advertising. CTR replicate the percentage
of website visitors who click a particular link. This proportion is calculated
based on the normal number of click-throughs per 100 ad impressions.
If you are running a
paid model of promotion like PPC, then this metric is important to determine is
your ad is profitable or not.
Anchor Text: Refers to the hyper-linked words on a web
page i.e. the words you click on when you click a link on a website. These are
an important consideration in trying to get your website favourably rated by a
search engine.
The anchor text words
are best written to describe what the information is you are linking to. For
example, best affiliate marketing program is an anchor text that leads to
Affiliate Code System sales page.
Now those are some of
the major terms used in affiliate marketing. There are more acronyms you will
learn on your own along the way but that’s the major terms you need to know.
So in a nutshell, what
we will learning is how to sign up as an affiliate of a particular product with
the merchant and be given a unique code to paste on your website or social
media sites. If someone were to click and buy via your affiliate link, you get
credit for that sale and then you are eligible for the commission.
Its as simple as that.
We are not creating product or handling sales or discussing with the leads or
anything. You will just send someone to a site and get paid. Nothing is as
simple as that in internet marketing.
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