Affiliate Terms - Best Blogs Asia
A guide to affiliate terms used in programmes to help you make the most from your participation.
An affiliate is an individual who drives traffic to online merchants. Affiliates drive traffic in many different ways but the most common methods are via website or blog content, or paid traffic from search engines’ advertising services.
General Affiliate Tips
- Text links may perform better than banner ads, but if using banner ads make sure they rotate or change over time.
- If you know something about the affiliate product, this will provide a great incentive for users to visit the affiliate site.
- Make sure you visit the affiliate sites, that they have a professional looking page and sells the products. Also make sure the company can be contacted by phone, postal address and by email.
- Programmes which offer something for free rather than selling to the user directly may yield higher commissions in the long term. Make sure the commissions can be paid to your country – by cheque, wire or electronic payments.
- Find out the affiliate company’s reputation on the web, by doing searches for “problem Affiliate Company” or “affiliate company sucks”.
Affiliate Definition Terms
Affiliate Fraud: Fraudulent activity by an affiliate designed to generate illegal revenue. This can include using automated scripts to falsely create leads or clicks, or humans to do the same. Interestingly, some fraudulent affiliates set up dummy accounts with networks and generate large value cheque transactions for which payment never arrives. They are betting that the merchant may not reverse commissions generated in this way.
Affiliate Network: An affiliate network provides a third party service to merchants and affiliates. The network will provide tracking, reporting and payment fulfilment services and allows merchants access to a large pool of affiliates. Networks generate performance based revenue by charging the merchant an override on top of affiliate commissions.
Affiliate Programme: An affiliate programme is a performance based form of marketing products or services offered by a website. The merchant pays a commission or lead rate on sales, enquiries or other actions to affiliate partners.
Banner Ad: Graphic advertisement displayed on an affiliate site.
Click Through: A web user clicks on an affiliates banner or link and is directed to the merchant’s site.
CTR: Click Through Rate/Ratio. Click through rate is calculated by dividing the number of clicks an ad receives by number of impressions. Thus if a banner ad was shown 100 times and received 20 clicks it would have a click through rate of 20%.
Click Reference: Most affiliate networks offer a facility to create unique tracking links containing a click reference. This allows affiliates to identify sales that have come via a particular page or link within their site or PPC campaign.
CPA: Cost Per Action. Metric for payment of commission based on a recordable action.
CPC: Cost Per Click.
CPM: Cost per thousand impressions. There are some affiliate programmes paying on a CPM basis.
CR: Conversion Ratio. This is obtained by number of click throughs to merchant divided by number of sales generated.
Commission: An affiliates payment for sales generated by their traffic based on percentage of sales or a fixed lead payment basis.
Contextual Linking: This refers to the process of placing affiliate links to appropriate products within related text or articles on a website.
Conversion Rate (CR): Percentage of clicks that convert to a sale. I.e. 4 sales for every 100 visitors would constitute a 4% conversion rate.
Data Feed: A data feed is a file (usually in CSV or XML format) containing product information for a merchant. This file will typically contain urls, names, images & descriptions of products offered by the merchant.
Drop Shipping: A lesser known form of affiliate marketing. This involves an affiliate taking orders and payment, and having arranged for a merchant to deliver product direct to client. No stock is required, and buying stock at wholesale prices means commission income is higher.
EPC: Earnings per hundred clicks. This is the most commonly used metric for determining the financial return provided by an affiliate programme. It refers to the average earnings of affiliates for every hundred clicks they deliver to merchant. Many affiliate networks make this data available to affiliates, but tends to be calculated in a slightly different way by each network.
Impressions: Refers to the number of times a banner ad or web site page is requested from the server.
PPC: Pay Per Click. The practise of paying for traffic from search engine advertising services on a cost per click basis. Ads are served based on keywords or themes.
Residual Earnings: Income generated from programmes where merchants pay commission on subsequent transactions by customers originally referred by an affiliate.
Tiered Commission: Commission structure offered by merchants which increases on a sliding scale based on performance. This can be based on number of sales or sales value.
Two Tier Affiliate Programme: Programmes of this kind reward you for signing up sub affiliates. This means that you are paid a certain percentage of their earnings for the life of the affiliate.
Unique Visitor (UV): This differs from the number of clicks in that it is a metric which refers to the number of unique individuals clicking on a link. For example, one person could click on a link 3 times in one day creating 3 visitor sessions and one unique visitor session.
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