Affiliate Marketing Definitions
Author: Jennifer Romero
Website: www.kolimbo.com
Affiliate marketing is a sales process where
merchants (a.k.a. advertisers, retailers,
brands) can sell and promote their products
and services by allowing websites to promote
them in exchange for a reward, usually a
commission payment. The industry is well
established and has been an active, online
revenue generating system since 1994 when
Amazon.com launched their own affiliate
program. Nowadays affiliate marketing is a
multi-million dollar industry attracting the
largest names and providing many companies
with a sizeable chunk of their sales. Here are
some definitions of some of the most common
terms used;
1. Affiliate - An Affiliate is a person
or a company that assists the merchant in
marketing products and services in return for
a commission. This is you!
2. Merchant - A merchant is a person or
a company that markets their products and
services on the web. Your merchant is the
person/company whose program you joined.
3. Tracking and Management Solution -
In order to track the incoming
Affiliate-referred traffic to their sites,
merchants need to purchase or create software
to Track and Manage their Affiliates and their
activities. Since you're here at The Kolimbo
Training Center, the merchants here chose the
My Affiliate Program Software.
4. Affiliate Networks - there are many
networks similar to Kolimbo that have a wide
variety of merchants to choose from. The way
they operate can be different in the details,
but basically they all provide a central site
from which you can join and manage many
affiliate programs.
5. Click-through - A click-through is
the action that takes place when a visitor
clicks on a banner or a link on your site to
go to your merchant's site.
6. Impression - An impression occurs
when a page containing your Affiliate code is
loaded on your site or in your HTML email
messages. Impressions are also called page
views.
7. Conversion Rate - this is the most
important figure to look out for as it tells
you how effective your performance is in
actually generating revenue. A conversion
maybe making a sale, or generating a sign up,
or simply an impressionor click through - it
all depends on the type of program the
merchant is running.
8. Commission/Reward - this is the
whole point of becoming an affiliate and using
affiliate programs, the money! The commission
is either determined by a percentage or a
fixed rate each affiliate program will specify
this. Cold hard cash isn't always the method
of payment, some merchants may reward you by
offering products, services, discounts,
vouchers, points, etc, although this is quite
rare.
9. CPS (Cost per Sale) - this where the
merchant rewards you for each sale you make.
It can either be a Percentage, e.g. 20% of the
final sale - or - it can be a fixed rate, eg.
$10 for every sale you make.
10. CPC (Cost per Click) - the merchant
will reward you for every click through you
generate to their site from your own. A CPC
deal maybe something like $0.05 CPC, this
means you get 5 Cents for every click through
you produce.
11. CPM (Cost per Thousand) - this is
to do with impressions. Every time a banner
appears on your website then that is counted
as one impression. A typical deal could be
$0.50 CPM, which means you'll get 50 Cents for
every thousand times a particular banner or
creative is served on your website.
12. CPL (Cost per Lead) - a lead is
something which a company can use to contact
someone in order to solicit a sale, eg. This
usually involves getting someone to fill in a
form with some personal details and their
contact information. Every form completed is a
'Lead' for the merchant. A CPL deal could be
$2 CPL, which means you get $2 every time a
visitor you refer fills in a particular form.
13. CPA (Cost per Action) - very
similar to CPL but it can refer to something
other than completing a form, eg. Downloading
something, joining a newsletter or forum,
watch a movie, etc. Basically, any action that
a merchant wants visitors to perform on their
website can be rewarded if they so wish.
14. Cookie Life - most affiliate
programs (including most Kolimbo programs)
need to use cookies somewhere in their
tracking process. A cookie is a small text
file that is placed on a user's computer when
they click on an affiliate link and visit a
merchant's site. This cookie has the affiliate
ID on it so if the user then buys something,
the merchant's site can look at the cookie and
see that the merchant needs to reward
Affiliate XX with a commission. A cookie life
is the length of time this cookie will remain
on the user's computer. Some last 24 hours,
others 1 week, 30 days, 1 year or even
forever. So, if you have joined a program that
has a cookie life of 30 days, if a user clicks
on your link, visits the site and then decides
40 days later to buy something, YOU will NOT
get a commission. A longer cookie life is
preferred especially if you are selling a
product or service where there is a
considerable 'decision making' process, eg. An
expensive item.
