In the world of affiliate marketing, you will hear so many three-letter acronyms thrown around. It may make your head may spin a bit. Affiliate marketing terminology can be challenging to understand if you’re not already familiar with it. Don't feel bad; it can feel a bit overwhelming at first.
I was a bit overwhelmed the first time I learned some of the terms and acronyms. That is why I was compelled to compile this glossary.
Check out the most commonly used affiliate marketing terms which you need to know. Because, at the end of the day, talking the talk is just as important as walking the walk.
The Always Important “A” Terms
Ad – An “ad”, or advertisement, in the world of e-commerce and affiliate marketing, usually refers to a pay-per-click (PPC) ad. This can include video ads on YouTube, Google text or display ads, and various types of ads on Facebook.
Ad Network – An ad network is an online service that connects advertisers and publishers. The most popular ad network is Google Ads.
Advertiser – In the ecommerce space, the term “advertiser” usually refers to a seller or brand with a product they need to advertise to get more sales. Advertisers do this with paid ads through an ad network or social platform. The counterpart to an advertiser is the “publisher,” a person or company that places ads on a content site that they own.
Affiliate – A business owner or entrepreneur who promotes products or services for a third party in exchange for a commission, typically offered for new sales or leads.
Affiliate Channel – An affiliate relationship with a specific affiliate program. See Affiliate Program below.
Affiliate Link – An affiliate link is a specific type of tracking link that you can generate from a seller to promote their offer. This can be a text link or an image link.
Affiliate Marketing – An industry built around the model of selling products through affiliates. Each time an affiliate makes a sale for a seller or brand, the affiliate will receive a commission. For more detailed information, check out this blog post.
Affiliate Network – A company that oversees affiliate relationships for a number of other companies. An affiliate network manages technology, recruitment, tracking, and payments functions. This is similar to the idea of an affiliate marketplace but not identical.
Affiliate Program – An arrangement where a seller pays affiliates who bring them new sales in the form of a commission (either through a cost-per-action or revenue share model). These can be pretty straightforward or more complicated, depending on the terms of the agreement and how many parties are involved.
Attribution – The concept of attribution applies to all of marketing as a way to determine which marketing channels provided value in making new sales or growing revenue. For example, you can use a tracking link to see how many sales came from an email.
In affiliate marketing, “attribution” has another meaning: who gets credit for a particular customer. In general, affiliate marketing uses last-click attribution. This means the owner of the affiliate link that was clicked most recently before the sale gets the commission. This is true even if they were referred by multiple affiliates.
Average Order Value (AOV) – An e-commerce metric that measures the average total of every order placed with a merchant over a defined period of time. AOV is one of the most important metrics for online stores to track. AOV drives key business decisions such as advertising spend, store layout, and product pricing. As a seller in the e-commerce space, your average order value (AOV) is a crucial metric in gauging the overall health of your offer.
Average Payout Value (APV) – The average commission amount you get paid for each sale as an affiliate. To find this number, multiply the average order value (AOV) by the commission rate. For example, if the average order value is $100, and your commission rate is 50%, then your APV would be $50.
A Bit of Beautiful “B” Terms Below
Banner ad – An image-based Internet advertisement that can be placed on an affiliate’s website. Banner ads often promote a company as a whole. Whereas text links tend to be used for more product-specific promotions.
Bridge Page – The affiliate bridge page is an additional step in the sales funnel between a traffic source and the offer’s pitch page. This bridges the gap between seeing an ad and being asked to make a purchase.
The Critical “C” Terms That Can Change Your Cash Count
Call To Action (CTA) – CTA is an instruction to the audience designed to provoke an immediate response. A CTA typically uses an imperative verb such as “call now”, “find out more” or “visit a store today”.
Chargeback – A purchase can be “charged back” when a customer disputes a charge or purchase through their credit provider or bank, usually because the customer claims that the charge or purchase was unauthorized, fraudulent, or unfunded.
Chargebacks cost sellers money and harm their reputation as a trusted online retailer. If you’re an affiliate paid on a RevShare model, you may lose your commission on a sale due to a chargeback – with CPA, only the seller is responsible.
Click-through rate (CTR) – CTR is # of buyers / # of visitors who saw an offer. A ratio of people who have clicked the CTA button on your landing page compared to the total number of people who have visited your site. This metric basically tells you how successful your landing page is. If many people come to your site but only a few clicks further, it may indicate a poor landing page.
Co-marketing – Co-marketing is an arrangement between two or more parties to promote each other to their own audiences. This often occurs through blog post swaps, email blasts, and social media mentions – and will either be a one-time or ongoing cross-promotional campaign.
Commission – The payout an affiliate receives in exchange for promoting a seller’s product.
Commission Rate – The standard rate a seller pays their affiliates in exchange for an offer promotion. Products will have wildly different commission rates depending on the industry, the possibility of recurring revenue, and the competitive landscape.
Commission Models – The two main commission models in affiliate marketing are cost per action (CPA) and revenue share (RevShare).
Conversion – The term conversion describes the completion of a specific goal online. Examples of conversion goals include new email subscribers, new opportunities or leads, and new sales or customers. In general, when you hear someone talk about conversions in affiliate marketing, it’s about sales on a landing page.
Conversion Rate (CV/CR) – A ratio of either visits or clicks (depending on if a landing page is present in the campaign funnel) to conversions. This tells you how many people reached your offer vs. how many converted.
Congratulations, You Are Currently Halfway Through The “C” Terms!
Cookie – A text file that is stored in a browser for a specified period of time (ie, cookie duration) in order to hold information such as the last date visited. Cookies are used to track unique IDs in the affiliate marketing world.
Cookie Duration – The amount of time a cookie will give credit to an affiliate for purchases made from a specific customer. Across the affiliate marketing industry, it can be anything the seller chooses: 24 hours, 7 days, 30 days, even 1 year. This is a key point of negotiation when discussing affiliate terms with a seller. The longer the duration, the more likely you are to get credit for a purchase as an affiliate.
Copy – Or commonly referred to as copywriting. Copywriting is the act or occupation of writing text for the purpose of advertising or other forms of marketing. The product, called copy or sales copy, is written content that aims to increase brand awareness and ultimately persuade a person or group to take a particular action.
Cost Per Action (CPA) – An affiliate marketing commission model centered around “cost per sale.” The CPA model is when sellers pay out a flat rate for a specific action. Typically, this action is a new sale. This is in contrast to offering a % revenue share for each sale.
Cost Per Click (CPC) – This is calculated by taking money spent / number of clicks. Cost per click describes how much you have to pay every time your paid ad is clicked, on average. This can change a lot depending on the competitiveness of your niche. In some cases, a $0.30 CPC isn’t great, while in others, a $2.50 CPC is great!
Overall, you can think of CPC as the counterpart to earnings per click (EPC), which describes how much you make per click as an affiliate. If EPC is higher than CPC, you are in good shape. If the opposite is true, you are actively losing money!
Cost per lead (CPL) – Cost per lead, or online lead generation, is an online advertising pricing model. With CPL, the advertiser pays for an explicit sign-up from a consumer interested in the advertiser's offer.
Cost per mille (CPM) – CPM is how much you must pay to get your display or text ad viewed one thousand times. In this case, the CPM is paid out based on impressions rather than clicks or sales.
Cost Per View (CPV) – CPV refers to the price an advertiser pays for every instance that their video ad gets played. This compensation model uses ad plays as a basis for gauging meaningful audience interest, promising advertisers better returns for their spending budgets.
Customer Avatar – Customer avatar, commonly referred to as a client avatar, is a fictional person that represents the real human customer you're targeting.
Creative – In marketing, people often use the word “creative” as shorthand for any images, video, or other visual assets used in an advertisement. This is in contrast to “copy,” which refers to the words that appear.
The “E” Words That Make Everything Excellent
Earnings Per Click (EPC) – EPC refers to the average amount of money you earn each time someone clicks one of your affiliate links. To calculate EPC, simply divide your total revenue by the total clicks on your affiliate links.
EBook – An eBook is an electronic version of a printed book. In the marketing world, they typically provide value to your audience. They can be used for lead generation, pure value add, education, and so forth. They are a powerful way to share information.
Email – Email is a key marketing channel that many business owners favor because it’s an asset you can control, unlike third-party platforms like Facebook or YouTube. Also referred to as an email list. Which refers to an email list of people who fit a certain demographic or audience profile. These are people you can email regularly to sell your products or promote new offers and bring in consistent income. As an affiliate marketer, your first goal with any new interaction is to build your email list.
Email Service Provider (ESP) – Any business owner operating online will need an email service provider (ESP). An ESP will help you host a list and send out both broadcast email and automated email campaigns. Some common examples used in affiliate email marketing include ActiveCampaign, AWeber, GetResponse, Constant Contact, Drip, Hubspot, MailChimp, and Sendlane. ESP is also commonly referred to as an email autoresponder.
The “F” Words That Finance Your Fun Times
First Click – This type of attribution in affiliate marketing gives credit to the affiliate who first referred a customer to an offer.
Funnel – A sales funnel is a path that online individuals take to go from prospects to customers. In affiliate marketing, the funnel usually involves taking people from a cold traffic source like Facebook Ads. It may also route people through an affiliate bridge page. Ultimately, it sends them over to an offer page. Some funnels may also incorporate email marketing, choosing to build a list and then present offers to engaged subscribers.
The “I” and “J” Words Are Just As Important
Impression – An impression is a single view of your ad, video, or web page. Impressions are a useful way to measure things like conversion rate (how many people took an action compared to total impressions on a page). They’re also used in the CPM model for pricing.
Joint Venture (JV) – A JV partnership is a partnership between two or more parties in an affiliate marketing venture. This arrangement allows you to get more creative with bringing in and distributing revenue. For example, you can set up a percentage of revenue to go to your copywriter. Or, allow upsells from other vendors in your funnel. Or, even set up second-tier contracts where someone makes money referring an affiliate who makes a sale.
Low And Behold, A List Of Lovable “L” Terms
Landing Page – The main sales page for a seller or affiliate marketer. It's a standalone web page for marketing or advertising campaigns. It’s where a visitor “lands” after they click on a link in an email or an ad.
Last click – This type of attribution in affiliate marketing gives credit to the affiliate who last referred a customer to an offer.
Lead – A lead is a sales contact, prospect, or potential customer. Leads are often pursued by businesses that sell high-ticket products or custom services. Leads can be nurtured through email or engaged directly with a live salesperson to become a customer. Some companies will pay for quality leads using a cost-per-lead (CPL) commission model. Leads can also be brought to you organically through evergreen content and digital real estate assets.
Lifetime Value (LTV) – The present value of the future cash flows attributed to the customer during his/her entire relationship with the company. LTV can be calculated as AOV * # of orders per year * average retention time in years. LTV is similar to AOV, but it’s focused on the long-term rather than on short-term profits. It includes any ongoing and future revenue from a customer, not just that initial order value.
Link Cloaking – The technique of taking long and often ugly affiliate links and rebranding them or making them pretty.
Not Too Many “N” Terms, But They Are Notable
Native ad – A native ad is a particular type of paid or sponsored post appearing on a content site. It usually blends in with the rest of the page. While most banner ads are clearly advertisements, native ads either match the other content or actually are content. Native ads often include recommended content on a website or posts appearing in a social media feed.
Niche – A niche is a specialized market, audience, or topic area that you can monetize. It helps to focus on a particular niche, so you connect with the audience. Each niche has its own competitive landscape and certain types of offers that tend to do well.
Offering Some “O” Terms Here
Offer – An affiliate offer is a product or service that you can promote as an affiliate. (Also see “product”)
One-Time Offer (OTO) – An additional offer presented in an order flow or sales funnel.
Please Pay Particular Attention to the “P” Terms
Paid ad – A paid ad is a pay-per-click (PPC) ad. A paid ad can appear on a content website, social feed, or search engine results page. (See “Pay-per-click” for more.)
Payment threshold – The payment threshold is how much money you need to have accumulated in your account before a payment is issued. This number varies by the affiliate network or affiliate program.
Payout – The payout is the amount of money you make as an affiliate per successful conversion. Knowing both cost and payout allows you to calculate ROI and revenue.
Pay Per Click (PPC) – Total ad cost / # of ads clicked. Pay-per-click is an internet advertising model used to drive traffic to websites. In a PPC model, an advertiser pays a publisher when the ad is clicked.
Pixel – In affiliate marketing, the word “pixel” is used as a shorthand nickname for the Facebook Pixel. It is an analytics tool that helps you measure the results of your Facebook Ads. And specifically, how those ads send traffic to your landing page.
Product – In affiliate marketing, a product is any kind of offer that a seller has for sale on a dedicated landing page.
Product Owner – The term “product owner” is basically another name for a seller or vendor. It’s the business owner or brand with a product to sell online.
Publisher – In the affiliate marketing space, content site owners are sometimes referred to as “publishers.” This is because they release or publish content to an audience. That content helps promote a seller's products. Published content may include display ads, native ads, or content containing affiliate links.
Most Of The “R” Terms Are Really Rewarding
Refund – In e-commerce, as with traditional retail, some people decide to return a product they purchased and get their money back. Refunds are part of the equation for any product sold through affiliate marketing. Though sellers and affiliates are motivated to minimize the number of refunds to make more profits.
Retargeting/remarketing – Retargeting or remarketing is a marketing tactic you can use on platforms like Google and Facebook to serve ads to users based on certain criteria, such as someone who visited the order page and never bought. These ads are often more lucrative than ads to cold traffic. This is because they’re targeting users who have already expressed some interest in an offer or product.
RevShare – RevShare is a commission model where the seller designates a percentage of each sale to go to an affiliate. The affiliate shares in both the risk and the reward. Affiliates can lose their commission if the customer decides to return the product or dispute the charge. However, you can make more overall when the order value is higher.
Return on investment or Return on ad spend (ROI or ROAS) – Return on Investment or Return on Ad Spend. A ratio of total revenue from ads / total ad spend. Probably the most important financial metric you should use. A good marketing ROI to aim for is 5:1. This means every dollar you spend on marketing brings in $5.
Some “S” Terms Are Super Special
Sales Letter – TSL – Text Sales Letter or VSL – Video Sales Letter – Letters in text or video format designed to convert sales page visitors into buyers.
Search – People often refer to “search” as a primary marketing channel for affiliate marketing. It’s generally used as shorthand for SEO.
Seller – Any business owner or brand selling a product through affiliate marketing. Also known as a vendor or merchant.
SEM – Search engine marketing (SEM) is an area of marketing focused on generating results from paid search or pay-per-click ads, especially from Google. This is in contrast to SEO, which is ranking in search for organic traffic. Many affiliates use SEM, either as a way to send cold traffic directly to an offer or to build an email list of buyers they can present offers to later.
SEO – Search engine optimization (SEO) is an area of marketing focused on growing organic traffic to a website. This traffic comes from search engines like Google or DuckDuckGo. SEO blends the skills of content creation, on-page optimization, and off-page SEO like link building to rank on page 1 of Google. In affiliate marketing, some affiliates will build out content sites. These sites aim to generate free traffic that will click affiliate links on their website or sign up for their email list.
SERP – The search engine results page (SERP) is the page a user sees after typing a search term into a search engine like Google.
Squeeze page – A specific type of landing page designed with no exit hyperlinks and the goal of capturing a visitor's contact information for follow-up.
Swipe Copy – Copy provided by an affiliate offer intended to be copied and pasted into your site, email automation, or social media posts. Can be used as-is or as inspiration for your own copy.
Thanks For Taking The Time For The “T” Terms
Tracking Links – A special URL that tracks behaviors like clicks or purchases.
Traffic – A measure of the number of visitors to an ad, webpage, or website. You can get free SEO, email, and organic social media traffic. Or paid traffic for PPC ads. In affiliate marketing, an affiliate is typically concerned with how much traffic they can send to an offer. And secondarily, how much traffic they’re getting to their content site, if they own one.
How Do You Use This New Terminology?
Face it, reading definitions is pretty dry.
And trying to make a list of affiliate marketing terms entertaining gets cheesy.
It's important to understand these terms so that you can form a solid understanding of how affiliate marking works. I encourage you to bookmark this page and refer back to it as needed.
Hopefully, this post gives you a solid foundation on the terminology used in this dynamic and rewarding industry.
To your success!