Online marketing blog
Read about the latest industry trends and AdCumulus specials.
28 essential affiliate marketing terms you should know
Byon 25. October 2016.
Working in online advertising, you surely face tons of affiliate marketing terms and abbreviations.
To make your life easier, we’ve selected and explained 28 most important affiliate marketing terms that frequently pop-up in this industry.
The terminology presented here follows the best practices from the industry and the terms used in our performance marketing tool – Affiliate Software.
So, here we go…
28 must-know affiliate marketing terms
1 AFFILIATE MARKETING – a type of marketing that is based on performance.
In affiliate marketing, affiliates are paid for successfully promoting a product or a service.
For example, a person running a fashion blog can be an affiliate of a clothes company that wishes to advertise their product on that blog. The affiliate earns money each time they refer a visitor to the company’s landing page, i.e., when a blog visitor clicks on that company’s ad.
Check out another example in our article on affiliate links and conversion tracking.
2 ADVERTISER – a person or organization that owns a business and offers services or products to customers.
Advertisers are willing to pay affiliates for each new customer or lead they bring. It helps them promote their brand and acquire new customers.
3 AFFILIATE – a person or organization that promotes offers.
Affiliates are usually publishers (owners of web sites or mobile applications), media buyers, or ad networks. Affiliates are sometimes also called partners, publishers and external marketers.
4 AFFILIATE PROGRAM – an arrangement in which the advertiser pays commissions to affiliates.
The commission model is usually based on actions performed by users. It usually involves lead generation, subscription to a service, etc.
Advertiser uses a performance tracking software to track users’ actions and affiliates that have helped in that process. Many service providers run their own affiliate program, meaning that they buy traffic for themselves to increase their profit.
If you are thinking about starting an affiliate program, check out our 6 quick tips for starting an affiliate program.
5 AFFILIATE NETWORK – acts as an intermediary between affiliates and advertisers.
Affiliate networks allow affiliates to easily find and participate in affiliate programs which are suitable for their inventory. Advertisers who offer affiliate programs work with affiliate networks to reach larger audiences, i.e. all affiliates participating in the affiliate network.
Affiliate network is an organization that makes its profit on the difference between revenue from advertisers and costs which they have to pay to affiliates.
6 OFFER – promotion of a service or a product.
Offers are created by affiliate managers and they usually contain all relevant information about the payout model and marketing prices. The alternative name for offer is campaign.
7 OFFER URL – the final URL where the visitor will land after clicking the promotion link or banner.
8 CONVERSION – an event generated by a user that an advertiser is willing to pay for.
This is usually a target action of the end user, defined by the advertiser. It can be a subscription to a service, lead generation, sale of a product, installation of a mobile application. Conversion is the final goal of advertising for which advertisers pay to affiliates.
9 CLICK-THROUGH RATE (CTR) – the percentage of clicks for the number of advertising impressions displayed to visitors or bought from other networks.
10 CONVERSION RATE – the percentage of clicks that converted, i.e. turned to lead or sales.
For example, if one in every hundred visitors to your site makes a purchase, then your conversion rate is 1%.
11 TRACKING LINK – also called click tracking link or affiliate link, it is a unique URL to which a certain affiliate sends clicks for a particular offer. This is the advertised link, e.g. link behind the banner. When users click the banner, they go to that specific URL.
12 POST-BACK URL – URL used for server-side conversion tracking; also called server post-back URL or server-to-server URL.
13 THIRD-PARTY TRACKING – a principle of notifying affiliates in real-time for every conversion.
When a new conversion is received, Affiliate Software automatically fires a conversion notification to tracking systems at the affiliate side or other third-party systems. For example, if an affiliate program or network works with another affiliate network, each valid post-back can be forwarded to that affiliate network.
14 CREATIVE – advertisement, ad, or (in a more narrow sense) banner.
There are many types of banner ads. Choosing the right type depends on the advertising channel, target audience and advertising message.
Congratulations, you’re halfway there!
15 AD TAG – an HTML element that is used to display ads by dynamically fetching them from an ad server. Sometimes it is also called ad snippet.
16 AFFILIATE MANAGER – a person who communicates with affiliates.
Affiliate managers often create offers and take care of maximizing performance of the affiliate program.
17 REFERRAL BONUS PROGRAM – a special type of payouts awarded to affiliates who brought new affiliates in the affiliate program.
For each referred affiliate, they can receive a fixed-price sign-up commission and a percentage of their total earnings in a given period.
18 CLIENT-BASED TRACKING – a tracking method in which information is stored on the user’s computer. A cookie is saved in the user’s browser when they click on an ad, and then linked back to the affiliate which brought the user.
After the user completes a conversion on a page, the tracking platform records a conversion for the proper affiliate using a piece of tracking code called tracking pixel. This pixel is sometimes called impression pixel or iFrame pixel, depending on which of these two methods are used.
Client-based tracking is simpler to implement on the advertiser’s side, but is less accurate, since it employs cookies.
19 S2S TRACKING – a tracking method based on sending post-backs from advertiser’s systems to an affiliate tracking software.
Advertisers have to support this type of tracking on their back-end. This makes it more technically complex than client-based tracking, but it is more accurate, provides better security, and greater flexibility.
20 LANDING PAGE – a website or webpage to which affiliates refer traffic.
For example, when users click on banners, they are redirected to a landing page that provides more information about the product advertised on that banner (usually with purchase options). The main purpose of a landing page is to complete an action. It can be a purchase, service sign-up, download, on any similar action that has a certain value for the advertiser.
22 COST PER ACTION (CPA) – A payment model according to which advertisers pay their affiliates for conversions only.
23 COST PER CLICK (CPC) – A payment model according to which advertisers pay their affiliates for each click their online ads receive.
24 NICHE MARKETING – a type of marketing focused on a specific group of consumers.
A well-defined niche enables marketers to create more personalized campaigns that will yield better results.
25 AD BLOCKER – the technology that prevents online ads from displaying on a website.
Since ad blocking is on the rise, IAB has launched its L.E.A.N. program to make ads better and, therefore, encourage users to give up ad blocking.
26 ATTRIBUTION – the process of identifying which affiliates are driving conversions.
27 LEAD – a contact that has the potential to become a customer.
28 SEARCH ENGINE OPTIMIZATION (SEO) – the process of getting a better ranking on search engine results pages. The purpose is to achieve higher visibility and attract more traffic (visits) to a website, resulting in more sales or leads.
But wait… there’s more!
You may currently be making your very first steps into the world of affiliate marketing. Knowing relevant terminology helps a lot in all its areas – from networking to promoting offers.
For example, take a look at our short overview of Affiliate Software, one of the most user-friendly tracking tools out there. Using a tracking tool can really be a piece of cake if you know the basic terms.
However, affiliate marketing is a quickly changing industry, so you will always run into some new terms and concepts. In the meantime, stay up-to-date with our handy glossaries covering specific advertising areas – programmatic, video and mobile.
And finally: no matter what, don’t forget to constantly expand your knowledge. Good results will follow!