Affiliate marketing and jargon

Affiliate Marketing or Performance Marketing

There are several academic and industry definitions. How I describe affiliate marketing is an online marketing segment that rewards affiliates and other associated parties for performing a pre-defined and confirmed action.  The pre-defined action could lead to a successful transaction between the affiliate and the retailer. The core parties associated with the transaction in affiliate marketing are affiliates, customers, retailers, affiliate networks and marketing agencies. I will define each of them in detail below.

Affiliates

Affiliates are individuals, companies or group of people with an affiliate website. Their core aim is to obtain traffic to their website and then send that traffic/customers/leads to the retailer websites. The customers then conduct sales or leads on retailer websites and in return the affiliate earn a commission for referring the successful customer from the retailer.

Customer

A customer may search for a product on Google or other search engines and in return the search engines presents a set of results based on the customer searched keyword. The results could be a mix of retailer websites, content website, price comparison and also with affiliate websites. A potential customer may click on an affiliate website to view the information and then the affiliate will redirect the customer on to the retailer website to make the purchase. A journey of a potential customer could begin from a search engine or leading affiliates use other marketing channels i.e. social media to obtain fresh customers.

Retailer

The retailer or an online store is the entity who is actually selling the product. Therefore the customer must make the purchase or create a lead at the retailer’s website. There are some advanced API related procedures of passing on the co-reg and other forms of data from the affiliate to the retailer but we won’t go into that detail at this stage, so let’s keep it simple for new affiliates.

Affiliate Network

An Affiliate network is basically a technology provider, a hub between the affiliate and the retailer. There are several benefits for an affiliate to work via an affiliate network such as an affiliate will have access to multiple retailers at one junction, payments are made easily at once each month, tracking facilities are managed by the affiliate networks so the affiliate does not have to worry about tracking the sales/leads and request commissions on each sale etc.

The affiliate network offers mutual benefits to the retailer in setting up the campaign to obtain thousands of affiliates at once location. The tracking, de-duping, payments and affiliates are managed easily on an affiliate network. The major disadvantage to a retailer on setting up the affiliate campaign is the increase in the campaign cost. We will discuss network costs in detail in our second post.

Affiliate Marketing Agencies

The role of the marketing agencies in managing an affiliate program could be very effective, especially where networks are not efficient in replying to affiliate queries. The affiliate marketing agencies provide support to the retailers in setting up the campaign, research on finding top affiliates, recruiting affiliates, detailed reporting and managing the program on daily basis. I have worked for Carat Manchester and surely I can say that majority of the affiliate programs were performing better with the active support of an affiliate manager from an agency. They are more responsive and probably easy to deal with; I am not against the affiliate managers at the affiliate networks :)

Popular types of Affiliate Websites

- Shopping Comparison such as Price Comparison, Adhut, HoppDeals

- Loyalty, cashback and reward websites such as Shopping Prizes, UKDeals, ShopBuddie, Pouring Pounds

- Discount Coupon websites such as Shop Codes, Coupons Plus, Korting Deals

- Content and Review websites such as Reviews UK

- Group Deal websites such as HoppDeals

- Mobile Comparison and other services comparison affiliates such as travel, holidays

- PPC affiliates who generate affiliate activity stream via paid search campaigns

All websites mentioned above are designed and developed by iLead.Pk

Popular types of Affiliate Programs

There is no specific limit but retail, travel, freebies, mobile, holidays, hotel and other bookings, finance related programs are more popular as compared to others. 

Popular types of Affiliate Campaigns

There are several types of affiliate campaigns. You can login to any affiliate network and view in what format they are offering the commission. Some may say we offer 4% per sale; others as £4 per sale or a lead etc. Some popular types are as follows.

- CPA Based Campaigns – These campaigns reward affiliates when a confirmed sale, action or acquisition is conducted i.e. purchasing a product instantly or within the cookie period from the retailer website.

- CPL Based Campaigns – These campaigns requires the customer to provide personal or other information for a successful lead. It does not require conducting the sale and making the payment instantly i.e. registering for a bank account, credit card, online course from the university website.

- CPC Based Campaigns – These campaigns requires the customer to make an exit click from the affiliate website and be redirected to the retailer website. It does not require the user to perform other action such as a sale or opt-in for a lead. The affiliate earns the commission for unique customer clicks. There are several checks and balances we will discuss in the future.

- CPM Based Campaigns – These campaigns are rarely available on the affiliate networks. The aim of these campaigns is to present the image on affiliate websites that actually pays the affiliates on each impression such as £10 per thousand impressions. This payment type is mainly used by large retailers or manufacturers on established websites such as a new BMW rollover ad may appear on Yahoo or MSN home page that could be obtained via a specialised CPM based ad network such as Double Click (acquired by Google several years ago).

- Hybrid Campaigns – These campaigns could offer a combination of any of the above i.e. a fridge, heating or PVC roof repair retailer may setup his affiliate campaign to offer 5p for each click to his site and then £2 for a unique lead and could also offer percentage on successful orders at a later date when an engineer visits the premises to provide a quote and the customer agrees to purchase it. I am being very optimistic but that is actually the case with the hybrid campaigns that are very rare to find on the affiliate networks. 

Popular Affiliate Promotional Material

Based on the affiliate website types mentioned above, here is some core promotional material provided by the retailers to the affiliates.

- Static Links & Deep links for each page dynamically obtained and altered at the network level

- Interactive banners in gif, jpg and flash format

- Interactive tools in JavaScript or Flash format that contains product images and prices

- Store information, returns information and contents that could be used by the affiliates

- Product Feeds that is raw data provided in csv, xml or APIs (Json, REST) format via the affiliate networks. It contains all product details such as price, name, description, rrp, price, delivery etc that are useful structured contents to setup price comparison websites

- Discount voucher codes specifically available for affiliates via the affiliate networks

Popular UK Affiliate Networks

Some of the popular UK affiliate networks I have been registered and worked as an affiliate are as follows. Detailed analysis on these affiliate networks will be provided in the next post in this series.

- Advortis                      http://www.advortis.com

- Affiliate Future            http://www.affiliatefuture.co.uk 

- Affiliate Window          http://www.affiliatewindow.com

- Affilinet                      http://www.affili.net

- Aflite                          http://www.aflite.co.uk

- Buyat                         http://www.buy.at

- ClixGalore                  http://www.clixgalore.co.uk

- Commission Junction  http://uk.cj.com

- DGM                          http://www.dgm-uk.com

- Linkshare                  http://www.linkshare.co.uk

- Monetise                   http://www.monetise.co.uk

- More Niche                http://www.moreniche.com

- OMG                         http://uk.omgpm.com

- Paid on Results         http://www.paidonresults.com

- Silvertap                   http://www.silvertap.com

- Trade Doubler           http://www.tradedoubler.com

- Trade Tracker            http://www.tradetracker.com/gb

- Webgains                http://www.webgains.com 

Useful Affiliate Marketing Jargon

A

Above the Fold
Once a web page has loaded, the part that is visible is said to be 'above the fold'.

Affiliate
A web site owner that promotes a merchant's products and/or services, earns a commission for referring clicks, leads, or sales.

Affiliate URL or Link
Special code in a graphic or text link that identifies a visitor as having arrived from a specific affiliate site.

Associate
 Synonym for 'affiliate'.

 B

Banner Ad
 Advertising in the form of a graphic image.

Blog
Acronym for 'web log', a blog is basically a journal that is available on the web. The act of updating a blog is referred to as 'blogging' and those who keep blogs, are known as 'bloggers'

Browser
A program that allows you to access and read hypertext documents on the World Wide Web

C

Click-Through
When a user clicks on a link and arrives at a Web site.

Click-Through Ratio (CTR)
Percentage of visitors who clickthrough to a merchant's Web site.

Cloaking
Hiding of page content or affiliate linking code.

Commission
Also known as a bounty or referral fee, the income an affiliate is paid for generating a sale, lead or click-through to a merchant's web site.

Contextual Link
Placement of affiliate links within related text.

Conversion
When one of your visitors makes a purchase on the merchant's site… i.e. converts from 'visitor' to 'buyer'.

Conversion Rate (CR)
The percentage of visits to your site that convert to a sale. I.e. If 1 person in every hundred visitors to your site makes a purchase, then your conversion rate is 1:100 or 1 percent.

Cookie
A cookie is a piece of information sent by a Web Server to a Web Browser that the Browser software is expected to save and to send back to the Server whenever the browser makes additional requests from the Server. You may set your browser to either accept or not accept cookies. Cookies can contain user preferences, login or registration information, and/or "shopping cart" information. When a cookied browser sends a request to a Server, the Server uses the information to return customized information.

Creative
The promotional tools advertisers use to draw in users. Examples are text links, towers, buttons, badges, email copy, pop-ups, etc.

Cross-linking
Linking a group of domains, usually your own, to each other for the purpose of increasing its popularity with search engines. Excessive cross-linking may lead to your site being penalised by Google or Yahoo!

D

Disclaimer
A disclaimer states the terms under which the site or work may be used and gives information relating to what the copyright owner believes to be a breach of his/her/their copyright.
In some cases you may wish to permit certain activities, in others you may wish to withhold all rights, or require the user to apply for a license to carry out certain actions.

Domain Name
The unique name that identifies an Internet site.

Doorway Page
Also known as bridge pages, gateway page, entry pages, portals or portal pages, these pages are used to improve search engine placement. Caution: some search engines will drop a site entirely if the existence of doorway/gateway pages is detected.

Download
Transferring a file from another computer to your own.

E

Endorsement Letter:
Also known as a "product review", an endoresement is a promotional statement outlining features and benefits for a particular product or service.

Email
Electronic mail, a message sent to another Internet user across the Internet. An email address looks like this jimsmith@bubblee.com, whereas, "jimsmith" is your user name, your unique identifier; "@" stands for "at"; "bubblee.com" is the name of your Internet Service Provider.

Email Link
An affiliate link to a merchant site contained in an email newsletter or signature file.

Email Signature (Sig File)
A brief message embedded at the end of every email that a person sends.

EPC
Term used by the Commission Junction affiliate network, this is your 'average earnings per 100 clicks'. This number is calculated by taking commissions earned divided by the total number of clicks times 100.

Exclusivity
A merchant that that stipulates 'exclusivity' in their affiliate agreement usually prohibits the affiliate from promoting competing products on their site. (I recommend against entering into exclusive agreements.)

G

Google Adsense
Text and image ads that are precisely targeted to page content, from which the webmaster earns a percentage of the price per click paid by the advertiser. 

Google Adwords

Google's Pay Per Click (PPC) advertising program. 

Graphic Interchange Format (GIF)

An image file format, suitable for simple files. A JPEG is the preferred format for storing photographs.

H

Hit
A hit is a single request from for a single item on a web server. To load a page with 5 graphics would count as 6 'hits', 1 for the page plus 1 for each of the graphics. Hits therefore are not a very good measurement of traffic to a website.

Home Page
Your primary HTML page, the first page anyone would see in your Web site. Also called a "landing page".

Hypertext Markup Language (HTML)
The primary "language" used to create World Wide Web documents (web pages).

I

Impression
An advertising metric that indicates how many times an advertising link is displayed.

In-house
Merchant that administers its own affiliate program.

Internet Service Provider (ISP)
The company you call from your computer to gain access to the Internet.

IP Address
A unique number consisting of 4 parts separated by dots, e.g. 165.115.245.2. Every machine on the Internet has a unique IP address.

J

Javascript
A programming language developed by Sun Microsystems designed for writing programs that can be safely downloaded to your computer through the Internet and immediately run without fear of viruses or other harm to your computer or files. Java requires a browser compatible with Java. Using small Java programs, Web pages can include animations, calculators, and other features.

Joint Venture (JV)
A general partnership typically formed to undertake a particular business transaction or project rather than one intended to continue indefinitely.

K

Keyword
The search term that a user may enter at a search engine. For example, someone who wants to find a site that sells printer paper might enter 'printer paper' at a search engine.

Keyword Density
The ratio between the keyword being searched for and the total number of words appearing on your web page. If your keyword only occurs, say, once, in a page that has twenty thousand words, then it has a density of 0.005 percent.

Keyword Selector Tool
Displays how many times a certain keyword was searched for at Overture (Yahoo! Search Marketing) during a given month.

L

Lifetime Commissions
An affiliate program that pays a commission on EVERY product or service that the customer buys from the merchant, once you've sent the referral, i.e. the customer is yours 'for life'.

Lifetime Value
The total amount that a customer will spend with a particular company during his or her lifetime.

Link Popularity
The total number of qualified Web sites linking to your Web site.

M

Manual Approval
Process in which all applicants for an affiliate program are reviewed individually and manually approved.

Merchant
A business that markets and sells goods or services.

Meta Tags
Information placed in the header of an HTML page, which is not visible to site visitors.

Multi-Level Marketing(MLM) 
Also known as Network Marketing, MLM involves the sale of products through a group of independent distributors who buy wholesale, sell retail, and sponsor other people to do the same.

 N

Newbie
Someone who is new to the Internet.

Niche Marketing
Focused, targetable market segment.

P

Plug-in
A small piece of software that adds features to a larger piece of software.

Portal
A term used to describe a Web site that is intended to be used as a main "point of entry" to the Web. I.e. MSN.com is a portal site.

R

Reciprocal Linking
The process of exchanging links with other websites to increase search engine popularity.

Recurring Commissions
Earn commissions both on the initial sale and subsequent purchases of the same product or service. Examples of affiliate programs that may pay recurring commissions are online dating services and web hosting services.

Referring URL
The URL a user came from to reach your site.

Residual Earnings
Programs that pay affiliates for each sale a shopper from their sites makes at the merchant's site over the life of the customer.

Return on Investment (ROI)
This is the amount derived from subtracting your net revenues from your total costs.

Revenue
Total income for your sales. For example, if you sell 50 ebooks at $27.00 each, your revenue would be $1350.00.

S

Scumware
Software that contains additional 'features' for the purpose of displaying advertisements. This software will modify web pages from their original content to put ads on the user's computer screen. Examples of scumware propagators included: Gator, Ezula, Surf+ and Imesh.

Search Engine Optimization (SEO)
The process of choosing keywords and keyword phrases relevant to your site or page on your site, and placing those keywords within pages so that the site ranks well when those keywords are searched upon.

Search Term Suggestion Tool
Displays how many times a certain keyword was searched for at Overture during a given month.

SPAM
The term "spam" is Internet slang that refers to unsolicited commercial e-mail (UCE) or unsolicited bulk e-mail (UBE). Some people refer to this kind of communication as junk e-mail to equate it with the paper junk mail that comes through the US Mail. Unsolicited e-mail is e-mail that you did not request; it most often contains advertisements for services or products.

Spyware
 Also known as "adware": A program hidden within free downloaded software that transmits user information via the Internet to advertisers.

Super Affiliates
The top 1 or 2% of affiliates that generate approximately 90% of any affiliate programs earnings.

T

Targeted Marketing
The process of distinguishing the different groups that make up a market, and developing appropriate products and marketing mixes for each target market involved.

Text Link
A link not accompanied by a graphical image.

Third Party Tracking Software
Software located on a server other than your own, that tracks and records visits to your Web site.

Tracking Method
The method by which an affiliate program tracks referred sales, leads or clicks.

Tracking URL:
A web site URL, http://www.awebsite.com, with your special code attached to it, i.e. ttp://www.awebsite.com/?myID. Visitors arriving at the side are tracked back to you through your special code,

Two-tier
Affiliate program structure whereby affiliates earn commissions on their conversions as well as conversions of webmasters they refer to the program.

U

Unique User
A unique visitor to your Web site. Probably the best indicator of site traffic.

Upload
Transferring a file from your computer to another computer.

V

Viral Marketing
A marketing technique that induces Web sites or users to pass on a marketing message to other sites or users.

Virus
A computer virus is defined as a set of commands, created intentionally, that will do some level of damage to a computer. A computer virus does not float around in cyberspace, but is always attached to something. That 'something' could be a text file (MSWord document), an email, a photo, a music clip or a video clip. Your computer must receive one of these 'carriers' in order to get a computer virus.

W

Web Host
A business that provide storage, connectivity, and services necessary to serve website pages and files

Web Site
A collection of HTML pages.

World Wide Web (WWW,or Web)
A section of the Internet containing "pages" of information, including text, photos, graphics, audio, and video. You can search for documents by using one of the many search databases. To access the Web

What’s Next?

I will publish next topic that is UK leading affiliate networks in detail on 13th February. If you are new to affiliate marketing and wish to proceed reading then I would suggest reading key nine strategies for affiliates before the affiliate networks. It would help you analyse and decide if you need to get into affiliate marketing and with what sort of interests and website ideas.  

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