For Newbies: The Language Of Affiliate Marketing

For Newbies: The Language Of Affiliate Marketing

You are about to encounter a language that you have never heard before – the language of Internet Marketing, as it relates to Affiliate Marketing. It is important that you understand what it all means, to ensure that you are signing up for programs that are worth your time.

As you will learn later, it is important to read the terms and conditions for affiliates. Sometimes, you will be presented with those terms before you sign up, and sometimes you will be presented with them after you sign up – but it is important that you read them, and it is important that you understand what is being said.

It is also important that you understand what the following terms or abbreviations mean:

For Newbies: The Language Of Affiliate Marketing

• - CPC –

Cost per click (CPC) is the amount of money an advertiser pays search engines and other Internet publishers for a single click on its advertisement that brings one visitor to its website.This relates to how much it costs for each click an ad or link receives when advertising on a CPC basis. In other words, instead of paying a flat rate for the advertisement, you would pay a certain amount of money for each click the ad receives.

• - PPC –

Pay Per Click is an Internet advertising model used on search engines, advertising networks, and content sites, such as blogs, in which advertisers pay their host only when their ad is clicked. With search engines, advertisers typically bid on keyword phrases relevant to their target market. Content sites commonly charge a fixed price per click rather than use a bidding system. This relates to CPC, where you pay for each click that your ad or link receives. Google AdWords is an example of Pay Per Click advertising, but are many of this kind of sites.

• -CPA –

Cost per action, or cost per acquisition, is an online advertising pricing model, where the advertiser pays for each specified action (a purchase, a form submission, and so on) linked to the advertisement.

Direct response advertisers consider CPA the optimal way to buy online advertising, as an advertiser only pays for the ad when the desired action has occurred. An action can be a product being purchased, a form being filled, etc. (The desired action to be performed is determined by the advertiser.) Google incorporated this model into Google AdSense but shut down the offering in June 2008.

eBay has recently announced a similar pricing called AdContext.Basically, this means that you will pay each time an action is taken. The action may be a click, a sign-up, or a sale.
In fact, many affiliate programs also pay on a CPA basis, meaning that each time someone clicks on your link or signs up to receive information through your link, you earn a little money. Google AdSense is an example of this.

• -CTR –

Click Through Rate, is a way of measuring the success of an online advertising campaign. A CTR is obtained by dividing the number of users who clicked on an ad on a web page by the number of times the ad was delivered (impressions). For example, if a banner ad was delivered 100 times (impressions delivered) and one person clicked on it (clicks recorded), then the resulting CTR would be 1 percent.Banner ad click-through rates have fallen over time, currently averaging much less than 1 percent. In most cases, a 2% clickthrough rate would be considered very successful. By selecting an appropriate advertising site with high affinity (e.g. a movie magazine for a movie advertisement), the same banner can achieve a substantially higher CTR. Personalized ads, unusual formats, and more obtrusive ads typically have higher click-through rates than standard banner ads.

CTR is most commonly defined as the number of clicks divided by a number of impressions and generally not in terms of the number of clicks divided by the number of persons who clicked. This is an important distinction. As a person clicks a single advertisement multiple times, the CTR increases using the latter definition, whereas the CTR doesn't change using the former definition. This number is usually represented as a percentage, and it refers to the number of times your ad was clicked on, in relation to how often the ad was viewed.

• -CPM –

Cost per thousand. The amount of money you pay for every one thousand ad impressions.
Also called cost ‰ and cost per thousand (CPT) (in Latin "miles" means thousand), is a commonly used measurement in advertising. Radio, television, newspaper, magazine, Out-of-home advertising and online advertising can be purchased on the basis of what it costs to show the ad to one thousand viewers (CPM). It is used in marketing as a benchmark to calculate the relative cost of an advertising campaign or an ad message in a given medium. Rather than an absolute cost, CPM estimates the cost per 1000 views of the ad.

An example of computing the CPM:

1. The total cost of running the ad is $15,000.
2. The total audience is 2,400,000 people.
3. CPM is calculated as CPM = $15,000/(2,400,000/1000) = $6.25

• - URL -

In computing, a Uniform Resource Locator (URL) is a type of Uniform Resource Identifier (URI) that specifies where an identified resource is available and the mechanism for retrieving it. In popular usage and in many technical documents and verbal discussions it is often, imprecisely and confusingly, used as a synonym for uniform resource identifier. The confusion in usage stems from historically different interpretations of the semantics of the terms involved. In popular language, a URL is also referred to as a Web address.Uniform Relay Link, otherwise known as a link, or a website address.

• -Affiliate Link –

A URL or link that is assigned to you by the affiliate program.This is the link that you will promote, as it is used to track your clicks and sales.

• -Contextual Link or Text Link –

A contextual link is a link that looks like content because it is all text. It may be several words long. A text link is a link such as www.link.com, as opposed to a banner ad.

• -Charge Back –

This will be an important term to you. This refers to when customers cancel their orders, or have their credit card companies reverse the charges. It basically means that you lose a sale. Some affiliate programs will hold money back each pay period to cover potential charge backs/refunds, and release that money to you after a specified period.

• - SPAM –

Unsolicited Commercial Email. This term also refers to commercial posts on forums and blogs. Most affiliate programs will have strict anti-spam regulations that you must follow.E-mail spam, also known as junk e-mail, is a subset of spam that involves nearly identical messages sent to numerous recipients by e-mail. A common synonym for spam is unsolicited bulk e-mail (UBE). Definitions of spam usually include the aspects that email is unsolicited and sent in bulk. "UCE" refers specifically to unsolicited commercial e-mail.

E-mail spam has steadily, even exponentially grown since the early 1990s to several billion messages a day. Spam has frustrated, confused, and annoyed e-mail users.

• -Revenue Sharing Program –

This is the same thing as an affiliate program.
Revenue sharing has multiple, related meanings depending on context.
In business, revenue sharing refers to the sharing of profits and losses among different groups. One form shares between the general partner(s) and limited partners in a limited partnership. Another form shares with a company's employees, and another between companies in a business alliance.

On the Internet, revenue sharing is also known as cost per sale, and accounts for about 80% of affiliate compensation programs. E-commerce web site operators using revenue sharing pay affiliates a certain percentage of sales revenues (usually excluding tax, shipping and other 3rd party cost that the customer pays) generated by customers whom the affiliate refer via various advertising methods. Another form of online revenue sharing consists in people working together and registering online in a way similar to that of a corporation, and sharing the proceeds.

• -Co-Branding –

Some affiliate programs offer co-branding options, where your company name or logo is placed on a reseller’s website, or on the product itself.
Co-branding refers to several different marketing arrangements:

Co-branding is when two companies form an alliance to work together, creating marketing synergy. As described in Co-Branding: The Science of Alliance:
"the term 'co-branding' is relatively new to the business vocabulary and is used to encompass a wide range of marketing activity involving the use of two (and sometimes more) brands. Thus co-branding could be considered to include sponsorships, where Marlboro lends it name to Ferrari or accountants Ernst and Young support the Monet exhibition." ”

Co-branding is an arrangement that associates a single product or service with more than one brand name, or otherwise associates a product with someone other than the principal producer. The typical co-branding agreement involves two or more companies acting in cooperation to associate any of various logos, color schemes, or brand identifiers to a specific product that is contractually designated for this purpose. The object for this is to combine the strength of two brands, in order to increase the premium consumers are willing to pay, make the product or service more resistant to copying by private label manufacturers, or to combine the different perceived properties associated with these brands with a single product.

• -Referral Link –

The same as an affiliate link, and with this Url, you can direct the refferers on the target .On the web there are multiple referral methods. For example posting the business on a forum or simply posting to friends in a professional network and social network. Another option is to use web-sites focused on referral tracking and bonus distribution. There are also websites that will allow people to insert a referral banner into their directory for a large audience to view.

Referral marketing has many different techniques. It has traditional offline applications. These offline applications have also been optimized for the web. In the offline world, there are a number of systems that can be used to generate more referrals.

• -Tracking –

The method or software used to record sales, clicks, leads, and other information that has to do with your affiliate link.A tracking system is used for the observing of persons or objects on the move and supplying a timely ordered sequence of location data for further processing.

• - HTML or HTML Code –

HTML stands for Hyper Text Markup Language. This is the programming language used to build webpages. HTML code generally refers to a small portion of HTML code, such as that needed to place affiliate links or banners on your web pages.

HTML, an initialism of HyperText Markup Language, is the predominant markup language for Web pages. It provides a means to describe the structure of text-based information in a document—by denoting certain text as links, headings, paragraphs, lists, and so on—and to supplement that text with interactive forms, embedded images, and other objects.

HTML is written in the form of tags, surrounded by angle brackets. HTML can also describe, to some degree, the appearance and semantics of a document, and can include embedded scripting language code (such as JavaScript) which can affect the behavior of Web browsers and other HTML processors.

• -Partner Program -

This is the same thing as an affiliate program. A channel partner program helps vendors' product and associated services via the channel. Partner programs apply to a variety of partner types, including value-added resellers.

• -Super Affiliate –

This refers to anyone who is making a lot of money in affiliate marketing, if you are an affiliate. However, if you have an affiliate program for your own product, this refers to your top affiliates – the ones who are making the most sales for you.

• -Opt-In –

Opt in e-mail is a term used when someone is given the option to receive "bulk" e-mail, that is, e-mail that is sent to many people at the same time. Typically, this is some sort of mailing list, newsletter, or advertising. Obtaining permission before sending e-mail is critical because without it, the e-mail is Unsolicited Bulk Email, better known as spam.

There are several common forms of opt-in e-mail:

• Unconfirmed opt-in

A new subscriber first gives his/her address to the list software (for instance, on a Web page), but no steps are taken to make sure that this address actually belongs to the person. This can cause e-mail from the mailing list to be considered spam because simple typos of the email address can cause the email to be sent to someone else. Malicious subscriptions are also possible, as are subscriptions that are due to spammers forging email addresses that are sent to the e-mail address used to subscribe to the mailing list.

• Confirmed opt-in (COI)

A new subscriber asks to be subscribed to the mailing list, but unlike unconfirmed opt-in, a confirmation e-mail is sent to verify it was really them. Many believe the person must not be added to the mailing list unless an explicit step is taken, such as clicking a special web link or sending back a reply e-mail. This ensures that no person can subscribe someone else out of malice or error. Mail system administrators and non-spam mailing list operators refer to this as confirmed subscription or closed-loop opt-in.

Some marketers call closed loop opt-in "double opt-in."

The term double opt-in was coined by marketers in the late 90s to differentiate it from what they call single opt-in, where a new subscriber to an e-mail list gets a confirmation e-mail telling them they will begin to receive e-mails if they take no action. This is compared to double opt-in where the new subscriber must respond to the confirmation e-mail to be added to the list.

Some marketers contend that double opt-in is like asking for permission twice and that it constitutes unnecessary interference with someone who has already said they want to hear from the marketer.

The term double opt-in has also been co-opted by spammers, diluting its value.

• -Opt-out-

Instead of giving people the option to be put in the list, they are automatically put in and have the option to be taken out.The term opt-out refers to several methods by which individuals can avoid receiving unsolicited product or service information. This ability is usually associated with direct marketing campaigns such as e-mail marketing, or direct mail. A list of those who have opted out is called a Robinson list.

• -E-mail Authentication-

E-mail authentication is a technique for validating that a person claiming to possess a particular email address actually does so. This is normally done by sending an email containing a token to the address, and requiring that the party being authenticated supply that token before the authentication proceeds. The email containing the token is usually worded so as to explain the situation to the recipient and discourage them from supplying the nonce (often via visiting a URL) unless they in fact were attempting to authenticate.

For example:

•  suppose that one party, Alice, operates a website on which visitors can make accounts to participate or gain access to content.

• Another party, Bob, comes to that website and makes an account. Bob supplies an email address at which he can be contacted, but Alice does not yet know that Bob is being truthful (consciously or not) about the address.

• Alice sends a token to Bob's email address for an authentication request, asking Bob to click on a particular URL if and only if the recipient of the mail was making an account on Alice's website.

• Bob receives the mail and clicks the URL, demonstrating to Alice that he controls the email address he claimed to have.

• If instead a hostile party, Chuck, were to visit Alice's website attempting to masquerade as Bob, he would be unable to register for an account because the confirmation would be sent to Bob's email address, which Chuck does not control.

This degree of email authentication is considered by many anti-spam advocates to be the minimum degree necessary for any opt-in email advertising or other ongoing email communication.This refers to ezine subscriptions, newsletter subscriptions, or email lists in general. Basically, it means that the subscribers on an email list have chosen to receive the information the list owner is sending. Typically, they have confirmed their email address and their request by clicking on a link in a
confirmation email, which is known as double opt-in.

• -1st Tier and 2nd Tier –

If you are signing up for an affiliate program, directly through the company, you are first tier. If you are signing up under someone else, you are 2nd tier.
However, when someone signs up under you, you are first tier, and they are your 2nd tier. Each tier gets a different commission rate for sales. In other words, when you sign up under someone else, when you make a sale, you get a full commission, and the person you signed up under gets a partial commission.

• -Joint Ventures –

A joint venture (often abbreviated JV) is an entity formed between two or more parties to undertake economic activity together. The parties agree to create a new entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. The venture can be for one specific project only, or a continuing business relationship such as the Fuji Xerox joint venture. This is in contrast to a strategic alliance, which involves no equity stake by the participants, and is a much less rigid arrangement.

The phrase generally refers to the purpose of the entity and not to a type of entity. Therefore, a joint venture may be a corporation, limited liability company, partnership or other legal structure, depending on a number of considerations such as tax and tort liability.

Joint ventures are similar to affiliate programs, but they operate a bit differently. The concept is the same – one person promotes another person’s product for a commission. However, usually the commissions are bigger, and the person doing the promoting is working directly with the owner of
the product.

Joint ventures are not uncommon in the oil and gas industry, and are often cooperations between a local and foreign company (about 3/4 are international). A joint venture is often seen as a very viable business alternative in this sector, as the companies can complement their skill sets while it offers the foreign company a geographic presence. Studies show a failure rate of 30-61%, and that 60% failed to start or faded away within 5 years. (Osborn, 2003) It is also known that joint ventures in low-developed countries show a greater instability, and that JVs involving government partners have higher incidence of failure (private firms seem to be better equipped to supply key skills, marketing networks etc.) Furthermore, JVs have shown to fail miserably under highly volatile demand and rapid changes in product technology.

Some countries, such as the People's Republic of China and to some extent India, require foreign companies to form joint ventures with domestic firms in order to enter a market. This requirement often forces technology transfers and managerial control to the domestic partner.

Another form joint ventures may take are the Joint Ventures (JV's) in the U.S., Canada, and Mexico dedicated to the conservation of priority bird species and their associated habitats. Each of these JV's is different in how they go about their respective missions but all try to follow the principles of Strategic Habitat Conservation (SHC). SHC combines biological planning, conservation design, conservation delivery, and evaluation and monitoring. Gulf Coast Joint Venture, Lower Mississippi Valley Joint Venture, and Prairie Pothole Joint Venture are just three of the 20+ JV's found in North America.

• -Direct Mail –

Advertising mail, also known as direct mail, junk mail, or admail, is the delivery of advertising material to recipients of postal mail. The delivery of advertising mail forms a large and growing service for many postal services, and direct mail marketing forms a significant portion of the direct marketing industry. Some organizations attempt to help people opt-out of receiving advertising mail, in many cases motivated by a concern over its negative environmental impact.

Advertising mail includes advertising circulars, catalogs, CDs, “pre-approved” credit card applications, and other commercial merchandising materials delivered to both homes and businesses. It may be addressed to pre-selected individuals, or unaddressed and delivered on a neighbourhood-by-neighbourhood basis. This refers to advertising that is done via postal mail. There are strict laws about direct mail, and many affiliate programs will have terms and conditions relating to direct mail to promote their product.

• -Cookies –

A cookie is a piece of code that is written to the cookie file on a person’s computer when they click on an affiliate link – or when they visit sites that use cookies, such as sites that require a login. The cookie does not harm your customer’s computer at all and is simply there to make sure that you get
credit for the sale if they come back later to make a purchase.

• - Affiliate Agreement –

The agreement that usually lists the terms and conditions related to an affiliate program. In most cases, you will agree to the affiliate agreement by checking a box when you fill out an online form to join the program. Some affiliate programs, however, will require you to print out, sign,
and fax the agreement. Make sure you read these agreements.
In affiliate programs, it is the terms of service between the advertiser and the affiliate, which defines and governs the affiliate relationship. The affiliate agreement will specify what both parties are responsible for, payout terms and commission for conversions. Most affiliate programs will ask you to agree to the affiliate agreement before submitting your application to join the program.

• - Conversion Rate – 

This is the number of sales in relation to the number of clicks received. Usually portrayed as a percentage.In Online Advertising it is the percentage of visitors who take a desired action (e.g. make a purchase or click an ad).

The desired action can take many forms, varying from site to site. Examples include sales of products, membership registrations, newsletter subscriptions, software downloads, or just about any activity beyond simple page browsing.

• -Commission – 

The amount of money that you as an affiliate will receive per sale. Some companies will list this as a percentage, such as 50%, while others will list it as a dollar figure.The payment of commission as remuneration for services rendered or products sold is a common way to reward salespeople. Payments often will be calculated on the basis of a percentage of the goods sold.

Commission rates are generally based upon the achievement of specific targets which have been agreed between management and the salesperson in question.

Offering monetary compensation in the form of commission alone, or commission in addition to salary rather than simply a fixed salary is intended to create a strong incentive for employees to invest maximum effort into their work. Common industries where a commission is used include car sales, property sales, insurance broking and many other sales jobs.

• -Associate or Associate Program –

Program associates fill a variety of different roles, including that of an office administrator, strategic planner, and project manager. This role is often found in nonprofits and professional associations, where fundraising and donor programs are key to ensuring the sustainability of the organization.

• -Banner Ad –

A graphic that is placed on your website and linked to your affiliate link.A web banner or banner ad is a form of advertising on the World Wide Web. This form of online advertising entails embedding an advertisement into a web page. It is intended to attract traffic to a website by linking to the website of the advertiser.
The advertisement is constructed from an image (GIF, JPEG, PNG), JavaScript program or multimedia object employing technologies such as Silverlight, Java, Shockwave or Flash, often employing animation, sound, or video to maximize presence. Images are usually in a high-aspect ratio shape (i.e. either wide and short, or tall and narrow) hence the reference to banners.
These images are usually placed on web pages that have interesting content, such as a newspaper article or an opinion piece.

Typical web banner sized 468×60 pixels.

The web banner is displayed when a web page that references the banner is loaded into a web browser. This event is known as an "impression". When the viewer clicks on the banner, the viewer is directed to the website advertised in the banner. This event is known as a "click-through". In many cases, banners are delivered by a central ad server.

When the advertiser scans their log files and detects that a web user has visited the advertiser's site from the content site by clicking on the banner ad, the advertiser sends the content provider some small amount of money (usually around five to ten US cents). This payback system is often how the content provider is able to pay for the Internet access to supply the content in the first place.

Web banners function the same way as traditional advertisements are intended to function: notifying consumers of the product or service and presenting reasons why the consumer should choose the product in question, although web banners differ in that the results for advertisement campaigns may be monitored real-time and may be targeted to the viewer's interests.

Many web surfers regard these advertisements as highly annoying because they distract from a web page's actual content or waste bandwidth. (Of course, the purpose of the banner ad is to attract attention and many advertisers try to get attention to the advert by making them annoying. Without attracting attention it would provide no revenue for the advertiser or for the content provider.)

Newer web browsers often include options to disable pop-ups or block images from selected websites. Another way of avoiding banners is to use a proxy server that blocks them, such as Privoxy.
If you come across other terms or abbreviations that you aren’t sure of the meaning of, make sure that you stop and go find out what it means before agreeing to anything – or before doing anything.

Not knowing can cause problems later on.