I spoke to someone recently that said they would like to know more about affiliate marketing but couldn’t get their head round all the jargon. So in this little glossary I have tried to decode a few of the frequently used terms you hear in affiliate marketing. Not sure why there are so many that begin with C…. Please leave a comment to let me know the ones I must have missed!
Affiliate Marketing Terms
Affiliate – Also known as a “Publisher”. An affiliate promotes goods or services on behalf of a provider in exchange for a reward which is almost always cash and can be a percentage of sales value or a flat fee. It is fairly common to have a tiered commission scheme where the more sales are generated the higher the commission awarded.
Cancellation – Also known as “Reversal”. When a sale has been recorded by an affiliate but the commission is taken back. This can occur if the transaction turns out to be fraudulent or is cancelled for some other reason.
Cookie – Non edible. A cookie is the thing that is used to track the visitors that are sent to the merchant site from the affiliate site and if they buy something / sign up information is sent back to the server so the affiliate can be remunerated. Cookies have varying lifetimes – a longer cookie lifetime means an affiliate is more likely to get paid if the visitor doesn’t buy immediately but comes back to the merchant site later. Most sales occur the same day or within a few days though.
Conversion Rate – Also known as Look to Book. Normally expressed as a percentage – The number of sales divided by the number of visitors. Can be some confusion in travel about this when for example an airline might be measuring passengers booked / total visitors while an affiliate will normally look at absolute bookings / total visitors.
CPA – Cost per acquisition. Normally used to measure how much was spent to “acquire” a sale e.g. a spend of £10 on Adwords generated £15 in affiliate commission. I have also seen this used to express the cash incentive for a sale / sign up. Usually a sign up e.g. “80 pence CPA for valid email address that signs up” (to a merchants website).
CTR – Click through Rate. Another % which is the number of clicks generated by a banner divided by the number of impressions that were served up. CTR can be increased by the relevance of the banner, the design and sales message, the location on the affiliate site and brand perception / offline marketing.
De-Duping – De-duplicating for affiliates is where a number of online marketing techniques have been involved in a sale and the merchant chooses to de-dupe the referrers so only (usually) the last refferer gets rewarded. Lets say an affiliate refers a visitor to a merchant and the visitor books a holiday, but the visitor has also clicked a PPC ad for the merchant (different cookie, different network), a de-duplication process may see the affiliate lose the commission. De-duping is also a process where email databases are checked for duplicates in order to reduce costs or improve reporting.
Deeplinking – Linking to a product page within the site. Example this instead of this. This can be a way to increase conversion rates. Not all merchants support this so be careful or your sales won’t track. Deeplinking can help your conversion rate by bringing your visitor to a relevant page, a page closer to the checkout process or a page with attractive deals.
Impressions – The number of times advertising material e.g. a banner was viewed. Not that interesting – it’s conversions that count!
Incentives – Sometimes merchants, in conjunction with networks, run incentives in order to boost sales or awareness of their campaign. Some incentives require nothing more than sales generation or even just to add a banner others require more creativity or effort such as a specific volume of sales. The best incentives (in my opinion) are pitched in a way that everyone can think they have a chance so has a go. This could be an incentive with different tiers or with a number of ways to gain entries. Incentives can include cash, holidays and other cool stuff.
Merchant – Standard affiliate speak for the companies that actually provide the products. Example Thomson.co.uk is a “merchant”.
Network – These are the companies that are the go-between, they take money from the merchants for delivering the sales, keep some of it and give the rest to their affiliates. They provide the linking technology, reporting and in many cases the account management and admin. Here are some British affiliate marketing networks.
PPC – pay per click. It’s not very common for affiliates to be rewarded on a pay per click basis, pay per sale (fixed £ or %) is much more common. Some affiliates and merchants use PPC products like Google Adwords to drive traffic to their sites.
ROI – Return on Investment. Important for all involved in marketing. One of the attractions of affiliate marketing for many marketing managers is that it is at least easier to measure the ROI of an affiliate marketing campaign than say a TV advertising campaign.
SEO – Search Engine Optimisation, widely used term to describe traffic gained through visitors that come via organic search engine results. The term SEO actually means having your website in the best possible shape for search engines to give it a good ranking for the keyword / phrases your site is all about but is also used to describe other off-site factors.