Affiliate marketing: jargon buster

LONDON - Here is Marketing's our handy guide to some of the key terms that feature in our affiliate marketing report.

Affiliate Marketing: Survive the online jungle

Affiliate marketing networks face new competitors

Affiliate An affiliate is an individual who drives traffic to online merchants. When a sale, lead, or other agreed action takes place, the affiliate will earn a commission.

Affiliate directory A directory of affiliate programs, featuring information such as the commission rate, number of affiliates, and affiliate solution provider.

Affiliate link A code that tracks visitors sent to a site by an affiliate. Each link contains a unique ID and will record sales, visitors, and impressions generated.

Affiliate network Provides a third party service to merchants and affiliates via tracking, reporting and payment fulfilment services, also allowing merchants access to a large pool of affiliates.

CTR Click Through Rate  - calculated by dividing the number of clicks an ad receives by number of impressions.

CPC Cost Per Click.

Cookie Allows sales generated by affiliates to be recorded ‘out of session'; for example, if the customer subsequently returns to a site but does not use the affiliate link. In response to the increasing numbers of consumers routinely deleting cookies from their computers, some networks use tracking solutions not reliant upon cookies.

EPC Earnings per hundred clicks. This is the most commonly used metric for determining financial return to an affiliate.

Merchant Online retailer or business owner.

PPC Pay Per Click. Paying for traffic from search engine advertising services on a cost per click basis. Ads are served based on keywords or themes.

Pay-Per-Lead The affiliate receives a commission for each sales lead that they generate for a merchant website.

Pay-Per-Sale The affiliate receives a commission for each sale of a product or service that they refer to a merchant's site.

Residual earnings Merchants pay commission on subsequent transactions by customers originally referred by an affiliate.

Tiered commission Structure offered by merchants that increases on a sliding scale based on performance. This can be based on number or value of sales.

Sources: AffiliateStuff.co.uk; MakingOnlineMoney.com

 

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