Looking into creating an affiliate program for your Technology or SaaS based company – but get bogged down with all the terminology when doing your research?
This post is meant to be used as a resource for understanding “lingo” commonly used in the affiliate marketing industry so you are not confused with reference terms.
Entities in Affiliate Marketing:
- Merchant – Is a company that offers a service or product (Can also be used interchangeably with “Advertiser” in the context of having an affiliate program. More below).
- Advertiser – In an affiliate marketing relationship, the Advertiser is the entity that offers the product or service that the Affiliate/Publisher promotes to an audience.
- Affiliate (partner) – Is any person, company, or organization that promotes a Merchant’s/Advertiser’s products or services.
- Publisher – Another name for an affiliate or affiliate partner.
- Network – A third party platform used by Advertisers to run their affiliate program on. For the Advertiser’s benefit: A network handles payment of commissions and collection of tax forms, compliance and monitoring, and other services an Advertiser might not be equipped to handle. For the Publisher’s benefit: The Publisher can centralize all affiliate programs they are a part of under one area. The network acts as a middleman marketplace for the two entities.
- Sub-Affiliate Network – A Network for which the network operator’s themselves, join affiliate programs as Publishers. They then recruit affiliates under their network to promote these products and services at a lower-than-offered commission rate (commission arbitrage). For example, If I ran an affiliate network, I can join example.com’s affiliate program for which I would receive $100 for each customer I refer to them. I would then allow my sub affiliate’s to promote, and then I would pay them a $50 commission (netting $50).
- Offer: The actual product or service that is being promoted from the merchant on behalf of the affiliate.
Affiliate Program Building Block Terms:
- Commission: The reward an affiliate/publisher receives for performing some action designated by the Merchant/Advertiser.
- CPA (Cost-Per-Action): The basic commission structure of all affiliate programs; Publisher performs this action, they receive this commission amount.
- CPS (Cost-Per Sale): Specified Commission for the action of referring a sale as an affiliate to a merchant/advertiser. For example: If I as an affiliate, refer 1 customer (make 1 referred sale) – I would receive $50. $50 is the CPS.
- CPL (Cost-Per-Lead): Specified Commission for the action of referring a lead as an affiliate to a merchant/advertiser. A lead can be anything from submitting a web form, starting a chat, etc.
- CPC (Cost-Per-Click): Specified Commission for the action of clicking on a link from an affiliate to a merchant/advertiser’s website. This is costly and often not used any affiliate programs anymore.
- CPM (Cost-Per-View or Pay-Per-View PPV): Specified Commission for the action of viewing a webpage through a link to a merchant/advertiser’s website. This is costly and often not used any affiliate programs anymore.
- Pay-Per-Call: Payment from Merchant to Affiliate for triggering a call to the merchant (other specifications to qualify such as call time, region, etc. can be qualifications for the commission).
- Pop offers or traffic: This refers to running ads on mobile apps and games where the affiliate can run a merchant’s ad and get paid a commission rate (there can be different types like Pop ups, Pop under and toolbars).
- Redirect offers or traffic: This refers to promoting a merchant or sending traffic through parked domains or redirect domains. For example, if someone owned a domain: fastfreeinternet.com and the affiliate is promoting a internet service provider, working with the owner of the domain (or part of a redirect network) could redirect that URL to the merchant’s affiliate link for a specific period of time.
- Cookie Duration: Is the window of time provided by the merchant to the affiliate from when: a link is clicked by a prospective customer to when they buy the product or service. For example: A cookie duration of 60 days means: a prospective client has 60 days or less between the time they clicked an affiliate link to when they buy the product or services (to ensure it is attributed to that affiliate.
Affiliate promotional terms:
- Banner: Usually a JPEG or a Gif (animated) file that affiliate’s place on their website or blog to display an advertisement of the merchant’s products or services.
- Text link: Html code that presents text with a hyperlink in it (usually an affiliate link).
- Deep linking: When an affiliate links to another page on a merchant’s site, than what is provided in the default affiliate link. For example, if your default affiliate link is: example.com?affiliate=TOM and an affiliate wanted to link to a merchant’s pricing page – they could use a deep link like: example.com/pricing?affiliate=TOM
- Swipe files: written content (such as blog posts or email copy) that are created by the merchant for the affiliate to use to market their products and services better.
- cloaking links (redirects): When an affiliate runs their assigned affiliate link or parameter through a redirected URL so that other affiliates or merchants don’t see their structured URL’s. Note: this is a best practice – and not seen as something an affiliates is doing to not allow you to see how they are promoting.
- Cobranded landing page – A page provided by the merchant (on the merchant’s site) that has information about a specific affiliate/publisher so that the specific publisher can use it to promote sed merchant for better conversion rates.
- Typosquatting – a method used by some affiliates to take advantage of misspelled domain names (often redirected to an affiliate link) in efforts to direct visitors who have misspelled the domain when typing into the browser. For example, someone might buy McDonlads.com to direct people who type this, through an affiliate link. This is forbidden in most affiliate program’s terms and conditions.
- Trademarking bidding – The act of bidding on a companies registered trademarks within Pay Per Click Ad networks. For example, an affiliate could bid on “Gap.com” in their PPC ads, and show their affiliate link vs. the companies ads. In a majority of affiliate programs, this is not allowed.
- Cookie Stuffing – Considered theft/stealing, is the act a publisher intently makes by stealing attribution of another channel or affiliate’s referred sales. For example, an affiliate might figure out (technically) how to find other affiliate’s promoting a product and prior to customer’s going to the merchant’s site – they remove or overwrite the other channel or affiliate’s cookie with their own.
- Toolbar – Is a addon or extension to a browser for some function to a user. For example, one toolbar might promise visitors who download it – “earn money searching the internet.” The toolbar publisher would then direct users to sites he is an affiliate for, and if those users take a specific action – then the toolbar publisher gets a commission. Toolbars are often not allowed in a majority of affiliate programs.
- iframed sites – is the act a publisher takes to create a version of a merchant’s site within an iframe (so it looks like the real site to the user). This is often not allowed and strictly enforced in most affiliate programs.
Common Metric and reporting Terms:
- EPC (Earnings Per Click): In an affiliate program, it’s the affiliate’s earnings divided by the affiliates clicks x 100. This is used by affiliates to understand their earning potential if they choose to promote a program.
- AOV (Average order value): It’s the total revenue divided by the total # of orders for a given period of time.
- CR% (Conversion rate percentage): It’s the total sales/orders divided by the traffic for a given period of time.
- ROAS (Return on Ad Spend): Is Revenue/cost of promotions or ads.
Common Commission Junction abbreviation and definitions:
- Transaction – Is a a commission record found in your CJ reports.
- CID # (Customer ID) – Is a unique number given to each commission junction publisher record.
- PID # (Publisher ID) – Is a unique number given to each website under a publisher record in Commission Junction (often use to correlate a commission record with a specific website under a Publisher’s account).
- AID # (Ad ID) – Is a unique number given to each Ad (banner, text link, etc.) within a Advertiser’s
- SID # (Shopper ID) – is a unique, alphameric code that is appears on a transaction to identify specific shoppers or sources of where a commission/transaction took place.
- Program Terms: Are the established terms and conditions between the merchant and publisher.
- Application Rules: Are the accept and decline criteria you can put in place to approve or decline new publishers into your affiliate program.
- Flex ID: The Flex ID sub-tab enables you to assign an ID of your choosing to a publisher CID. This advertiser-assigned ID can be passed to your site on the click, from the respective publisher.
- Corrections: The act of merchant correcting (and sometimes declining) a commission because it was: returned, duplicate, referred by another affiliate.
- Subscriptions: For merchants to send data to CJ (through Email, FTP, etc.) with a list of Order ID’s to correct.
- Publisher Sign Up Form: Link merchants can link to from your website to direct your visitors to become publishers on the CJ network.
- Publisher Group: A feature for merchants/advertisers to group publisher’s in their affiliate program (to report on or use to email with Commission Junction).
If you’d like to see more affiliate marketing terms and abbreviations, check out the Earning Guys Article here.
Are there terms that you have come across that you don’t know? Please comment below and I can answer and add them to the list!