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.