Affiliate marketing is a dynamic and ever-evolving industry that comes with its own set of terminology, tools, and best practices. Whether you’re a seasoned professional or a newcomer to the field, understanding these terms is crucial to navigating and succeeding in the affiliate marketing landscape. In this blog post, we will provide an authoritative, trustworthy, and conversational guide to some of the most essential terms, players, strategies, and practices in affiliate marketing.
Key Terms and Definitions in Affiliate Marketing
Understanding key terms is foundational to grasping how affiliate marketing works. Let’s dive into some of the most important concepts:
• Amended Date: This refers to the date when an advertiser makes changes to their previous validations, often affecting the status of transactions.
• Approved: This indicates that a transaction has been validated and the commission has been attributed to a specific publisher.
• Assisted Awin (1st) & Assisted Other Channels: These terms describe situations where an affiliate drove the first click that led to a sale, but was not credited as the final referrer.
• Average Order Value (AOV): Calculated by dividing the total sales amount by the number of transactions, AOV is a critical metric in evaluating the performance of an affiliate program.
• Ad Blocker: Software that prevents ads from displaying on a user’s device. As ad blockers become more prevalent, understanding their impact on affiliate marketing campaigns is crucial.
• Ad Server: A third-party system that delivers and tracks advertisements independent of the website hosting the ads. This ensures transparency and trust between advertisers and publishers.
• Advertiser: Also known as a merchant or brand, the advertiser is the entity that sells goods or services and pays affiliates for generating traffic, leads, or sales.
• Adwords: Google’s advertising platform that allows businesses to bid on keywords to appear in sponsored listings on search engine results pages.
• Affiliate (Publisher): An individual or business that promotes an advertiser’s products or services in exchange for a commission on generated sales or leads.
• Affiliate ID: A unique identifier assigned to each affiliate within a network, used to track their performance and earnings.
• Affiliate Marketing Program: Also known as a performance marketing or CPA program, it is a system where affiliates are rewarded for driving specific actions, such as sales or leads, on an advertiser’s website.
• Affiliate Networks: These act as intermediaries between advertisers and affiliates, providing tracking, reporting, and payment solutions.
• Analytics: Tools like Google Analytics help affiliates and advertisers understand user behavior, track conversions, and optimize campaigns.
• Animated .gif: A type of banner ad that rotates through multiple frames to display a message, commonly used in display advertising.
• Approval Rate: The percentage of pending sales that are confirmed as valid by an advertiser.
• Awin Index: A score out of 100 that measures the success of an advertiser program based on various metrics like click-to-sale conversion and earnings per click.
Affiliate Marketing Players
Understanding the roles and responsibilities of the key players in affiliate marketing is essential:
• Affiliates (Publishers): Affiliates are the driving force behind traffic generation. They promote products or services through various channels such as websites, blogs, social media, and email marketing. Their success lies in effectively reaching and converting their audience.
• Advertisers (Merchants): Advertisers are the brands or businesses that partner with affiliates to promote their products. They set the terms of the affiliate program, including commission rates and tracking methods.
• Affiliate Networks: Networks facilitate the relationship between affiliates and advertisers, providing the necessary infrastructure for tracking, reporting, and payments. They also help in recruiting affiliates and managing programs.
Each of these players is integral to the success of affiliate marketing campaigns. Advertisers provide the products and services, affiliates drive traffic and conversions, and networks ensure that everything runs smoothly.
Technical Terms and Tools
Technical tools are critical for managing and optimizing affiliate marketing campaigns:
• Ad Tag: An HTML element used to dynamically fetch and display ads from an ad server. It’s essential for managing and tracking ad performance.
• APIs (Application Programming Interfaces): APIs allow different software systems to communicate with each other, enabling automation and integration of various tools and platforms.
• Client-Based Tracking: A method of tracking user interactions using cookies stored on the user’s device. While client-based tracking is becoming less common due to privacy concerns, it remains a key component of affiliate marketing.
• Cookies: Small text files stored on a user’s device that track their interactions with a website, enabling affiliates to earn commissions for referred sales.
• Ad Exchanges: Platforms where digital ads are bought and sold in real-time through automated bidding processes. Ad exchanges are crucial for reaching targeted audiences efficiently.
These technical tools play a vital role in the success of affiliate marketing campaigns by enabling precise tracking, data analysis, and effective ad management.
Common Affiliate Marketing Strategies
Affiliate marketing strategies can vary widely, from basic tactics to more advanced approaches:
• Click Reference & Click Command: These tools allow for precise tracking of which links or ads drive traffic to an advertiser’s site, making it easier to attribute conversions.
• Commission Tiers & Commission Groups: These strategies involve setting different commission rates based on the volume or type of sales generated by an affiliate, incentivizing higher performance.
• Email Affiliates: These affiliates specialize in email marketing, sending targeted campaigns to their subscriber lists to drive sales or leads.
• Cashback Affiliates: These affiliates offer a portion of their commission back to the consumer, creating an incentive for shoppers to use their links.
• Deal Affiliates: Focused on offering discounts and promotions, deal affiliates attract budget-conscious consumers looking for the best deals.
Case Studies: A well-known cashback affiliate partnered with a major online retailer to offer double cashback during a holiday sale, resulting in a 40% increase in sales for the retailer and a significant boost in commissions for the affiliate.
Affiliate Management and Programs
Effective affiliate management is crucial for maintaining a successful program:
• Affiliate Managers: These professionals act as the bridge between advertisers and affiliates, managing relationships, providing support, and ensuring that affiliates adhere to program guidelines.
• Affiliate Programs: These are structured systems where advertisers outline the terms of engagement, commission structures, and tools available to affiliates.
• Affiliate Software Platforms: Tools like SaaS platforms provide advanced tracking, reporting, and management features, enabling advertisers to run their programs more efficiently.
A strong affiliate management strategy ensures that affiliates are motivated, supported, and aligned with the advertiser’s goals, leading to better performance and higher returns.
Advertising and Creative Elements
The creative elements of an affiliate marketing campaign are critical to its success:
• Banners, Text Links, and Display Ads: These are the most common forms of creative used in affiliate marketing. The design and placement of these ads can significantly impact their effectiveness.
• Alt Text: Used in images, alt text not only improves accessibility but also enhances SEO, making content more discoverable by search engines.
• Datafeeds: These provide affiliates with up-to-date information about products, enabling them to create relevant content and offers that resonate with their audience.
Creative elements are essential for attracting attention, conveying messages, and driving conversions in affiliate marketing campaigns.
Ethical and Unethical Practices
Maintaining ethical standards in affiliate marketing is crucial for long-term success:
• Adware, Cloaking, and Click Fraud: These unethical practices can harm an advertiser’s reputation and lead to penalties. Adware displays unwanted ads, cloaking hides the true content of a webpage, and click fraud involves generating fake clicks to inflate metrics.
• Transparency and Credibility: Ethical practices build trust with consumers and partners. This includes clear disclosures about affiliate relationships and honest marketing practices.
Following ethical guidelines not only protects your brand but also fosters trust and credibility with your audience and partners.
Measuring Success and Analytics
Understanding and analyzing performance metrics is key to optimizing affiliate marketing campaigns:
• Conversion Rate, EPC, and AOV: These metrics help you understand how well your campaigns are performing. Conversion rate measures the percentage of visitors who complete the desired action, EPC (Earnings Per Click) shows the revenue generated per click, and AOV (Average Order Value) gives insights into customer spending behavior.
• Tracking Tags & Transaction IDs: These tools enable precise tracking of user interactions, ensuring that all conversions are accurately attributed to the correct affiliate.
• Attribution and Geo-Targeting: Understanding which channels contribute to conversions (attribution) and targeting audiences based on their location (geo-targeting) are crucial for optimizing campaigns and improving ROI.
In conclusion, affiliate marketing is a complex and dynamic field that requires a deep understanding of terms, players, tools, and strategies. By mastering these elements, you can build and manage successful campaigns that drive growth and profitability.
A
• Amended Date: Date when an advertiser makes changes to previous validations.
• Approved: Transaction validated, and a specific publisher is credited with the sale.
• Assisted Awin (1st): Sales/leads where the affiliate drove the first click but wasn’t the final referrer.
• Assisted Other Channels: Sales/leads initiated by the affiliate but attributed to another channel.
• Average Order Value (AOV): Total sales amount divided by the number of transactions.
• Ad Blocker: Software that prevents ads from displaying on a user’s device.
• Ad Server: A third-party system delivering and tracking ads independent of the hosting website.
• Advertiser: Entity (merchant/brand) selling products/services and paying affiliates for referrals.
• Adwords: Google’s platform for bidding on keywords for sponsored search engine listings.
• Affiliate: Person/business promoting an advertiser’s products in exchange for a commission.
• Affiliate ID: Unique identifier for affiliates within a network, used for tracking performance.
• Affiliate Marketing Program: A system where affiliates earn commissions for driving actions like sales or leads.
• Affiliate Networks: Intermediaries providing tracking, reporting, and payment between advertisers and affiliates.
• Agency: Independent company managing online/offline marketing activities for advertisers.
• Analytics: Tools used to analyze website performance and user behavior, like Google Analytics.
• Animated .gif: Banner ad that rotates through frames, commonly used in display advertising.
• Approval Rate: Percentage of pending sales confirmed as valid by an advertiser.
• Awin Index: Score measuring the success of an advertiser program based on key metrics.
B
• Banners: Graphical ads in various sizes/formats used by affiliates to promote advertisers.
• Bonus: Extra payment to affiliates outside of the standard commission structure.
• Browser: Software used to navigate and view websites (e.g., Chrome, Firefox).
• Brand Bidding: Affiliates bidding on search engine keywords containing the advertiser’s brand name.
C
• Click Reference: Tracking reference added to a link for performance monitoring.
• Commission: Total earnings from transactions during a set period.
• Commission Group: Groups of products/customers earning different commission rates.
• Conversion Rate: Percentage of referred customers who make a purchase.
• Converted Awin: Sales/leads attributed to an affiliate where other Awin publishers were involved.
• Converted Solo: Sales/leads attributed solely to an affiliate without other Awin publisher involvement.
• Creative ID: Unique identifier for each creative (e.g., banners).
• Creative Name: Title assigned to a creative by the advertiser.
• Click Append: Command added to a destination URL to track the source of activity.
• Click Command: HTML line replacing the href attribute for tracking clicks on rich media.
• Click-through (Click): When a visitor clicks a link/banner on a publisher’s site, leading to an advertiser’s site.
• clickTAG: Variable in a Flash file allowing ad servers to use tracking URLs.
• Co-Branded Landing Page: A landing page featuring both the advertiser’s and affiliate’s branding.
• Co-registration Campaigns: Collecting opt-ins for multiple organizations on a single registration page.
• Commission (CPA/Reward): Payment to a publisher for generating leads/sales for an advertiser.
• Commission Tiers: Higher commission rates for affiliates achieving greater volumes.
• Confirmation/Thank-You Page: Page visited after a purchase, where tracking tags are typically placed.
• Conversion: Percentage of clicks that result in a sale.
• Cookie: Small text file storing tracking data on a user’s device.
• Cookie Length: Time a cookie remains on a user’s device, usually 30 days.
• Cost per Lead: Payment model where the advertiser pays per qualified lead.
• Cost per Sale: Payment model where the advertiser pays a percentage/flat fee per sale.
• CPA: Cost per Acquisition; the amount an advertiser pays for each acquisition/lead.
• CPC: Cost per Click; payment model where advertisers pay for each click on an ad.
• CPM: Cost per Thousand Impressions; payment model where advertisers pay per 1,000 ad views.
• Creative: Term for banner ads used in affiliate marketing.
• Cross Selling: Encouraging customers to buy complementary products during their purchase.
• CSV Feed: Data format allowing affiliates to download product details from an advertiser.
• CTR: Click Through Rate; percentage of ad views resulting in clicks.
D
• Datafeed: Data file from an advertiser processed for trackable links/images on affiliate sites.
• De-Duplication: Process of attributing a sale to one marketing channel under predefined conditions.
• Declined: Transaction validated, but the affiliate was not attributed for the sale.
• Direct Linking: Ads linking directly to an advertiser’s site without an intermediary page.
• Discount Code: Code provided by advertisers for affiliates to promote discounts.
• Discrepancy: Differences between ad performance statistics recorded by different systems.
• Duplicate Commissions: Commission that appears more than once, often due to page refreshes.
• Domain Name: Website address (e.g., www.mysite.com).
• Dynamic Links: Links that can be updated quickly by advertisers across affiliate sites.
• Dynamic Web Page: Web page generated at the time of request, allowing for personalized content.
E
• Earnings Per Click (EPC): Total commission divided by the number of clicks generated.
• Effective Cost Per Thousand Impressions (eCPM): Commission divided by impressions, multiplied by 1,000.
F
• First Party Cookie: Cookies generated by the website a user is visiting directly.
• Forced Clicks: Clicks that occur without the user’s consent.
• Frequency: Number of times the same ad is shown to the same visitor during a session.
G
• GDPR: EU regulation governing the use of personal data by businesses.
• Geo-targeting: Targeting customers based on their location.
• GIF: Graphical file extension used in banner ads.
H
• HTML: Programming language used to construct most web pages.
• HTTP: Protocol for transferring documents on the web.
I
• IAB: Internet Advertising Bureau; trade association for digital advertising.
• Interstitial: Intrusive ad loading between web pages without user request.
• Inventory: Number of ad spaces available for sale on a website.
• Impressions: Number of times a web page is loaded, used to measure ad effectiveness.
• Influencer: Publishers with significant influence over a demographic (e.g., bloggers).
• ITP: Apple’s Intelligent Tracking Prevention in Safari to limit third-party cookie tracking.
J
• [removed] Scripting language adding interactivity to web pages.
• JPEG: Graphics format for displaying photographs/images.
K
• Keyword: Words/phrases used by internet users in searches for products/services.
L
• Landing Page: Web page where a visitor arrives after clicking a link.
• Lead: Information used to generate a sale, typically from a form submission.
• Linked Accounts: Linked programs where accounts are automatically joined to prevent leakage.
• Leakage: When a customer purchases in a non-trackable manner, leading to missed commissions.
• Linking Code: Code used by affiliates to link to an advertiser’s website.
• Links: Any form of directing consumers to an advertiser’s website (e.g., banners, text links).
M
• Manual Commissions: Payments for sales that didn’t go through normal validation procedures.
• Merchant/Advertisers: Websites rewarding affiliates for placing links to their products/services.
• Merchant ID/Advertiser ID: Unique identifier for each advertiser in the network.
• Microsite: Small interactive ad used as a pop-up on an advertiser’s website.
N
• Number of Products: Number of products purchased through affiliate links during a period.
• Network Override: Percentage charged to advertisers for network services.
O
• Offline Orders: Orders made outside the normal shopping cart, typically via phone or email.
• Online Fraud: Scams conducted over the internet (e.g., spyware, phishing).
• Optimisation: Prioritizing certain creatives in a campaign for higher click-through rates.
• Order Reference: Unique reference used by an advertiser for sales/leads.
P
• Page Source: HTML code describing the layout and contents of a web page.
• Payment Level: Higher commission rates or longer tracking periods for top-performing affiliates.
• Pop-under: Ad displayed in a smaller browser window behind the current window.
• Pop-up: Ad displayed in a smaller browser window on top of the current window.
• Post Click: Action performed after clicking an ad.
• Post Impression: Action performed after viewing an ad.
• PNG: Portable Network Graphics, a bitmapped image format.
• PPC: Pay Per Click; payment model for ads based on clicks.
• Product Feed: Data file containing product information for affiliates to use.
• Publisher Directory: Directory featuring profiles of publishers in a network.
• Publisher Tags: Code on a publisher’s website requesting an ad from the server.
• Paid to Publisher: Commission already received by a publisher.
• Payment Progress: Status tracking of individual transactions.
• Payment ID: Unique identifier for each payment.
• Pending: Transaction not yet validated by the advertiser.
• Program: Name of the advertiser.
• Preview: Preview of what a creative looks like.
Q
• Quantity: Total number of sales generated during a period.
R
• Reach: Number of unique visitors to a site, expressed as a percentage of the target audience.
• Real-Time: Immediate processing of requests for information.
• Rich Media: Ads with richer graphics, such as audio/video, often allowing user interaction.
S
• Sale: Any purchase made on an advertiser’s website.
• Script: Files initiating routines like generating web pages dynamically.
• Search Engine Position: Placement of a site on search engine results for specific terms.
• Sectors: Primary categories advertisers belong to (e.g., Retail & Shopping).
• SEO: Search Engine Optimization; techniques to gain high rankings in search engines.
• Shockwave: Software plug-in enabling multimedia animations in browsers.
• Subsectors: Sub-categories within each advertiser sector.
• Site Placement: Description of an ad slot within a site, including size, pricing, and placement.
• Sponsored Listings: Guaranteed placement in top search results for targeted keywords.
• Spyware: Software gathering information without consent.
• Standard Tags: Basic ad code tags for serving simple images or GIFs.
T
• Tag Name: Name assigned by advertisers to categorize creatives.
• Tags: HTML commands describing document structure and behavior in browsers.
• Tracking Tag: Code on an advertiser’s site enabling reporting when a sale occurs.
• Tracking URL: URLs redirected through an ad server to track click-throughs.
• Traffic: Measure of website visitors during a set period.
• Transaction: Entry in the system resulting in pending, declined, or accepted commission.
• Transaction ID: Unique identifier for each transaction.
• Transaction Date: Date of purchase for the transaction.
• Total Influence: Number of sales/leads where an affiliate drove a click.
U
• Unique Users: Unique individuals/browsers accessing a site or served unique content/ads.
• URL: Uniform Resource Locator, the internet address of a website/page.
• Uncleared: Transaction approved, but the advertiser hasn’t yet paid the network.
V
• Validation Date: Date the advertiser validated the transaction.
• Valid Domain: Recognized domain as a valid confirmation page in the system.
• Validating Commission: Manual validation of commissions by advertisers.
• Validation Period: Time taken for a pending sale to be validated.
• Visitor: Someone viewing a website, typically from an ad, search engine, or direct URL.
• Vomba: Type of adware causing pop-ups and contextual ads.
• Voucher Code: Unique code delivered to a customer for a single-use discount.
W
• Web-based: Online services/functions accessed via a web browser without additional software.
• Web Optimization: Improving a website for better user experience and higher search rankings.
• Web-portal: Website offering various resources/services (e.g., email, forums, search results).
• Webprints: Specific HTML tags tracking user activities on a web page.
• Web Services: Software systems designed for machine-to-machine interaction over a network.
X
• XML Feed: Extensible Markup Language file format for downloading all products from an advertiser.