Every person including me and you who start blogging as a passion or professionally, I am sure one day we are going to monetize our blogs to earn some money so that we can support hosting and other such charges easily. Many of us monetize the blog with advertisement networks like Google AdSense, but best we can earn through Affiliate Marketing. And before get engaged into real marketing I want you to become familiar with affiliate marketing terminology. This is very important to help you recognize the terms commonly used with affiliate marketing.
Below is a list of practical terms that you will come across from time to time.
Advertiser/Merchant – The advertiser is the company that produces the products or the services that you are going to promote. The advertiser is also commonly referred to as the Merchant. The affiliate is the individual who is promoting the advertiser’s services and products and will receive commission for the leads or sales that the advertiser gets. So, if Rajesh is a blog owner promoting Amazon books, then Rajesh is the affiliate, book is the product, Amazon is the advertiser.
Affiliate Agreement – This is the agreement that is drawn between the affiliate and the advertiser when they enter into an affiliate relationship. It has details of rules, roles, legalities and responsibilities for the relationship. You generally don’t need to bother about it.
Affiliate Link – An affiliate link is that which the advertiser (or affiliate network) provides to the affiliate. This link will have a unique tracking code specifically for the affiliate so that the merchant can keep track of the sales that the affiliate is generating. So, if you are the affiliate, the merchant will assign a link to you containing the unique code so that when visitors on your website visit his business and buy something, the sales has been generated through you.
Affiliate Manager – This is the person managing the affiliate program for the advertiser. He recruits affiliates and ensures that their promotional methods are above board and increase affiliate sales. The merchant is also the connection between the affiliate and the advertiser.
Affiliate Network or Affiliate marketing software – The network, unlike the manager, is a third party, managing the affiliate program for the advertiser. Networks provide technology for tracking the efforts of the affiliates. They also ensure that there is proper tracking of the sales, prompt payment of commission to affiliates. The network will also help the merchant meet potential affiliates for promotion their services and products. One example of an affiliate network is the Amazon Affiliate Program.
Affiliate Tracking – As mentioned in “affiliate link”, there is a unique code that is provided to the affiliate. This code helps in tracking the traffic that has been sent to the advertiser. An example of affiliate tracking is – advertiser.com/? ID=AFFILIATEUNIQUEID.
Banner Ad – A banner ad is a graphical advertisement that the affiliate puts on his website for the advertiser’s promotion.
Click Through – When a visitors clicks on the affiliate link and is taken to the website of the merchant, a click through occurs.
Click Through Rate – Also known as CTR, this is a metric that compares how many times the affiliate link has been clicked to the number of times it has been viewed. The result is displayed in the form of percentage. For example, if the banner ad on your website has been viewed 100 times and has been clicked once, then you will divide 1 by 100 and multiply it again by 100. This will give you a result of 1%.
Commission – Commission is the money that the advertiser pays to the affiliate. This is a pre-defined amount that is entered into the affiliate agreement.
Conversion – When a visitor visiting your website takes action, such as buying a service or product, signs up for email or fills up a form, then he is converted. The conversion of potential customer to a buyer complete.
Conversion Rate – The comparison of number of times the affiliate link has generated conversion to the number of times the affiliate link has been viewed and displayed as percentage is conversion rate. The method of calculation of conversion rate is same as CTR.
Cookies – When an individual visits your website a text file is sent from the website to the web browser of the visitor. This is used for assigning an ID to the visitor who has clicked on the affiliate link to reach the advertiser’s website for a specific period. If the visitor returns to the website within the specified period, then the affiliate gets credited with a sale. Example, Rajesh visits your website and clicks the affiliate link. Cookie is dropped to his web browser. He returns to the advertiser’s website again before the cookie expires. This ensures that you receive credit and commission for the sale.
CPC – CPC is cost per click. This is the money that is paid for generating a click by a visitor on an affiliate link. For example, you have spent Rs.200/- on an advertisement. The advertisement gets 100 clicks. Therefore, your CPC is Rs.2. The calculation formula is the cost of the advertisement divided by number of clicks generated.
Disclosure – A disclosure is a page that the affiliate has on his website to make visitors aware of the compensation that you are paid for recommending products or services that you are endorsing for purchase. This is mandatory for marketing affiliate programs.
Email Link – This is an email advertisement sending affiliate link sent to users so that they can utilize it in their email marketing.
Earnings Per Click (EPC) – As the term states, this is the earning that the affiliate makes on every click of the affiliate link. EPC or the earnings per click is calculated by dividing the total amount received from the affiliate link by the total number of clicks.
Independent Affiliate Program – This term refers to advertisers who run independent affiliate programs and do not depend on affiliate networks.
Niche – If you have a website for dogs, then your niche is dogs. This is your topic.
Pay Per Lead – Also known as PPL, this is the process of paying a commission to the affiliate on generation of a lead. This can be in the form of a quote requested by a visitor, filling up of a form or anything that the advertiser has identified as a lead in the agreement.
Pay Per Click – PPC, as this is known is a program in which the advertiser pays a commission to the affiliate when a visitors clicks on the affiliate link leading to the merchant. The commission is paid whether the lead results in a sale or not.
Pay Per Sale – This is an affiliate program where the affiliate is paid on the basis of the total number of sales made when visitors click on the affiliate link. For example, Rajesh visits your website and clicks on the affiliate link that takes him to the advertiser’s link. He makes a purchase from the advertiser and is, therefore, converted. A sale has been made. This results in a commission for you.
Recurring Commissions – The affiliate is paid a commission of the initial signature of a visitor. He continues to receive commissions as long as the visitor is using the service and paying for it. Therefore, if you refer a visitor Rajesh to a website and he signs up for the services and pays for them, you are paid a commission. If Rajesh continues to buy the services, then the commission you get is Recurring Commission.
Residual Earnings or Lifetime Commissions – Many affiliates are receiving lifetime commissions when they sign up for such programs. In this type of program, the affiliate is credited with lifetime sales when they refer any new visitor to the merchant’s website. The initial referral has been made by the affiliate and he continues to get the commissions.
These Affiliate Marketing Terminology are mostly used in affiliate marketing. Familiarize yourself with them and if you have any doubts or questions, then just revert back to me via comments with your queries.
I know you must be excited to join an affiliate programs to earn some bucks.
TRY TO JOIN AN AFFILIATE PROGRAM. IT IS IMPORTANT THAT YOU EITHER HAVE A WEBSITE OR A BLOG, then start your blog for free.
Did I missed something in Affiliate Marketing Terminology?
I tried my best to make you familiar with affiliate marketing terminology, if you more than these or have any questions, then please feel free to ask by leaving a comment below.