Wednesday, March 3, 2010

Sorting Through The Affiliate Terminology Jungle

by Shayne Wyatt

Let's face it, it doesn't matter what profession you enter today, there always is a an inherent language which must first be understood to grasp what is going on.

The affiliate marketing industry is no different. It can be far easier in the affiliate world knowing what it all means rather than guessing, or even getting the wrong answers.

There are a multitude of phrases, slang terms, and abbreviated terms in affiliate-speak which can sound foreign to someone new entering the business. I hope this short compendium of affiliate terms and abbreviations will help you muddle through the process a little bit easier.

Especially when reading the affiliate company agreement you may be asked to sign in some cases. You know what I'm referring to, that little box you are asked to click on saying you have read and agree with the terms as set out in their agreement.

If you do not understand what some of the terminology means, do not 'Okay' it with a click in the little box, which is considered your signature of approval.

Ask the company setting out the terms in the agreement to clarify something for you, they will be more than happy to satisfy your queries, or go to an outside source for the answer if it will make you feel better.

There's an old saying that also works in today's Internet world: It's always better to be safe than sorry.

Affiliate: A person who may or may not be a web site owner, and promotes a merchant's products and/or services while earning a commission for referring either clicks, leads, or sales.

Affiliate Agreement: Agreement listing terms, conditions and policy related to an affiliate program. Frequently highlighted by a small box which is to be clicked when the stated material is agreed to. Agreements should always be read first.

Affiliate Marketing: A process consisting of a tightly integrated affiliate effort to discover, create, arouse, and satisfy customer needs to facilitate an arrangement whereby commissions are earned based on sales, leads or clicks referred to the merchant website or product page. Occasionally called a Partner Program, Revenue Sharing Program or Associate Program, it is still an affiliate program.

Affiliate Link: Sometimes called a Referral Link, is an URL or link assigned to an affiliate by the merchant to promote its product(s), and by which clicks, leads and sales may be tracked.

Banner Ad: A product/service graphic placed on an affiliate website or other advertising venue, made to attract visitors to click on for more information about the product offered. Freely available from most merchants with affiliate ID links tied in for affiliate recognition on clicks, sales, leads.

Charge Back: Occasionally a sale may become invalid or incomplete for a number of different reasons cancelling the transaction after an affiliate may have received a commission payment for the sale. Therefore a minor hold-back is administered at each pay period to cover potential charge backs and/or refunds if they occur. This money will be released in a timely manner with each subsequent commission check. Bottom line, a merchant should not be expected to pay an affiliate for a sale not made.

Clickbank: One of the largest and most recognized distributors of digital information products on the Internet for affiliates with its ease-of-use, and online billing and marketing service for the development of affiliate programs. A wealth of information for newbie affiliates.

Click-Through: When a visitor clicks on an advertised link on one website which immediately takes them to another website where the product or service is offered.

Co-Branding: Certain affiliate merchants may offer co-branding options, where an affiliate may have their name or logo placed on the sales literature, product website, or on the product itself.

Cookies: Whenever a visitor clicks on a link or banner, a cookie containing the affiliate's unique account ID will be used to mark the visitor for as many days as outlined by the merchant. If the person makes a purchase within this time period the affiliate is credited with the commissions on orders generated from these clicks.

Commission: The fee an affiliate will receive for clicks/leads or sales transaction made by the merchant. The amount paid could be determined on a percentage basis or simply a dollar amount of the selling price.

Contextual Link or Text Link: A contextual link is a link may up of content or an all text ad. It may be a wordy ad, or simply a URL to click on, as opposed to some sort of banner ad.

Conversion Rate: The number of sales in relation to the number of clicks received. Often portrayed as a percentage of visits to your site which converts to a sale. When two of every hundred visitors makes a purchase, the conversion rate is 2:100 or 2 percent.

CPA: Cost per action. This refers to being paid each time an action is taken, whether it is a click, sign up, or sale.

CPC: Cost per click. With reference to Google Adwords, instead of paying a flat rate for the advertisement, you would pay a certain amount of money for each click the ad receives.

CPM: Cost per thousand. The amount of money you pay for every one thousand ad impressions.

CTR: Click Through Ratio. Represented as a percentage, it refers to the number of times an ad was clicked on, in relation to how often the ad was viewed.

Download: Transfer of a file from another computer to your own.

Google Adsense: Text and/or image ads precisely targeted to webpage content, causing the advertiser to pay a percentage of the price per click to the website owner.

Google Adwords: Google's Pay Per Click (PPC) advertising program.

HTML: Hypertext Markup Language. The predominant markup language for web pages by providing the means to create structured documents containing headings, paragraphs, quotes, lists and links along with a number of other things.

Joint Venture: Similar to affiliate programs, but operating somewhat differently. Working directly with the owner of a product, one person promotes another person's product usually for a larger commission incentive. Or a swap of products takes place by affiliates of similar size lists to expand their customer base off each other.

Keyword Density: The ratio between keywords and the total number of words appearing on a Web page. If a keyword were to appear twice in a page having 2000 words, it would have a density of 0.050 percent.

Landing Page: The page that appears when a potential customer clicks on an advertisement or a search-engine result. The page usually displays content which is a logical extension of the advertisement or link, and is optimized by featuring specific keywords or phrases for indexing by search engines.

MLM: Multi-Level Marketing or Network Marketing. Involves sale of products through a group of independent distributors in a tiered system who purchase wholesale, sell retail, while sponsoring others to do the same.

MRR: Master Resell Rights.

Newbie: A person new to affiliate marketing or becoming a webmaster.

Niche Marketing: The process of recognizing different groups which make up a market, and developing appropriate action, products, and marketing specifics for each target market involved.

Opt-In: Refers to sign-ups for newsletters, ezine subscriptions, or email lists in general. When subscribers on an email list have agreed to receive the information the list owner is providing, they then confirm their email address and their request by clicking on a link in a confirmation email known as a double opt-in.

PLR: Private Label Rights: Product can be treated as if it is your own. You can put your own name as author, change graphics and text, and can be sold it as a MRR or RR. Even though authorship can be claimed by purchaser, copyright claim cannot be.

PPC: Pay Per Click. Relates to CPC, paying for each click that an ad or link receives. Google AdWords is prime example for Pay Per Click advertising.

PPL: Pay-Per-Lead. Affiliate program where affiliate receives a commission for each sales lead generated for a merchant web site. Could be for a contest, sweepstakes, software download trials, or completed surveys.

PPS: Pay-per-Sale. Commission paid to affiliate for every sale made to affiliate merchant as a result of visitor having come from affiliate website or promotion venue.

Ramping Up: Taking a campaign with potential and adding more relevant keywords and traffic sources to increase volume and commissions.

Recurring Commissions: Commissions earned on the initial sale and subsequent purchases of the same product or service. Hosting services are prime examples of an affiliate receiving recurring weekly, monthly, or yearly commissions.

Residual Earnings: Paying an affiliate for every sale made by a visitor originally sent to the affiliate merchant for as long as the visitor remains a customer.

RR: Resell Rights: Product can be sold to someone else for personal use only, not for them to resell it again.

SPAM: Unsolicited Commercial Email or commercial postings on blogs and forums. Most affiliate programs have strict anti-spam policies which must be followed. Considered unwanted, unwarranted and unsolicited, commercial email or unsolicited bulk e-mail is commonly referred to as junk-mail.

SEO: Search Engine Optimization. The practice of enhancing search engine web page indexing. A process to improve volume or quality of traffic from search engines.

Super Affiliate: The top 5% affiliates generating 90% of total affiliate earnings.

Third-Party Credit Card Processor: Organizations accepting credit card orders on behalf of merchants. PayPal is a good example.

Tracking: A method or software used to record sales, clicks, leads, and other information related to an affiliate's links.

Tier One, Tier Two: An individual signing directly with an affiliate merchant is a Tier One affiliate. An individual joining the program through another affiliate is Tier Two. Every affiliate eventually becomes a Tier One affiliate when someone joins the program under them as a Tier two. Tier One and Tier Two affiliates make the same commission on sales, but Tier One affiliates get a small commission bonus on each sale their Tier Two affiliates make. It is an incentive to encourage affiliates to bring new people into the business.

Upload: Transferring of files from one's computer to another computer

URL: Universal Resource Locator. Also known as an Internet address or www address or a website address.

Viral Marketing: Marketing technique to induce websites or users to pass on a marketing message to other sites or users, usually by free ebooks or software.

Webmaster: Individual who builds, publishes, maintains, and updates their own website(s) and/or other people's sites.

About the Author

Shayne Wyatt is a member of a diversified experienced group of webmasters at assisting newbie webmasters and affiliates preparing to enter the online business world.