Affiliate Marketing Terminology

Like every industry, Travel Affiliate Marketing has its own lexicon.  The following is TravelDividend’s list of the most common travel affiliate marketing terms and their definitions:

Above the Fold: An old advertising term adapted to the online world, it describes the part of a web page or email message that is visible without scrolling down the page. Content above the fold is assumed to be more valuable to the reader than that which lies ‘below the fold’.  We suggest you test your web pages on a 15in monitor, as the size of the “above the fold” area will depend on the resolution of the user’s computer monitor and the number of pixels their monitor displays.

Affiliate: A Web site owner that earns a commission for referring leads, sales or clicks to a Supplier.

Affiliate Agreement: The legal terms and conditions between a Supplier and an affiliate that govern the relationship. See our post titled “Affiliate Agreements – The Good, The Bad & The Ugly” for a more detailed description and understanding of affiliate agreements.

Affiliate Information Page: A page on a supplier’s web site that explains the terms of supplier affiliate program, including the commission rates, affiliate agreement, a link for existing affiliates to login, as well as a link to the signup page for new affiliates.

Affiliate Link: A URL tracking link that identifies the affiliate and sends traffic to the merchant’s web site. For example, a link might look like something like this: http://www.yourdomain.com/yourpage.asp?AffiliateID=5999

These links are unique in order to track the traffic coming from the Affiliate site. Typically these links can be simple text links, images, product links, etc.

Affiliate Manager: The person responsible for running the supplier’s affiliate program. The Affiliate Manager’s roles and responsibilities include recruiting affiliates, establishing incentive programs, creating media for the affiliates, reporting on sales, among others.

Affiliate Program Can also be called an Associate Program, Partner, Referral or Revenue sharing program. In such a program, the merchant rewards the affiliate for web traffic, sales or leads on a pay-per-click, pay-per-sale, or pay-per-lead basis.

Affiliate Program Directory: A comprehensive listing of merchant affiliate programs. The directories are typically categorized by industry, and include the typical payout or commission rates.

Affiliate Software: A software program for running and managing an affiliate program. Software functionality and features typically include affiliate registration, managing links, and tracking impressions, clicks, sales, leads. This also includes paying affiliates, etc.

Affiliate Solution Provider: A 3rd party company that provides an affiliate tracking solution on a hosted basis on behalf of a supplier.

Affiliate Tracking: The process of tracking a link uniquely by affiliate using an Affiliate Link.

Associate: Synonym for affiliate.

Auto-Approve: Affiliate application process whereby all application are immediately accepted/approved upon submittal by the affiliate. This term can also be used to describe the process of automatically accepting all sales recorded by affiliates.

Banner Ad: An electronic advertisement or billboard such as an animated GIF, Flash Movie, JPEG that advertisers a product, service, or web site.

Browser: A client program (software), such as Internet Explorer, Netscape, or Opera, that is used to look at various kinds of Internet resources.

Charge Back:  An action taken by the supplier that invalidates a sale transaction, and results in the affiliate forfeiting any commission that may have been earned on the sale.

Click-through: The action when a user clicks on a link and follows through to the merchant’s web site.

Click-Through Ratio (CTR): Percentage of visitors who click-through on a link to visit the merchant’s web site.

Co-branding: A marketing term denoting an affiliate and supplier/merchant jointly branding the supplier’s offering.

Commission: Income an affiliate earns for generating a sale, lead or click-through to a merchant’s web site. Sometimes commission is also called a referral fee, a finder’s fee or a bounty.

Cookies: Small text files stored on the visitor’s computer, which record information that is of interest to the merchant site. In affiliate software cookies are utilized to track which affiliate the web visitor came from and which banner or link they clicked. They can also store the date/time of the click for purposes of tracking the time elapsed between a click and a conversion to a sale or lead.

Cookie Expiration/Cookie Retention: When a cookie is planted on a web browser, a date when the cookie expires is defined. This date is important because affiliate sales can only be recorded before the cookie expiration date. This period will also determine if repeat sales will be recorded.

Conversion Rate: Percentage of clicks that result in a commissionable activity (sale or lead).

CPA (Cost Per Action): e-Commerce payment model whereby the supplier pays the affiliate based on a qualifying action (i.e., cost for a conversion such as a sale or lead).

CPC (Cost Per Click): e-Commerce payment model whereby the supplier pays the affiliate based on a per click basis.

CPM (Cost Per Thousand Impressions): e-Commerce payment model whereby the supplier pays the affiliate based on the cost of 1000 banner impressions.

CPO (Cost Per Order): Same as CPA but refers specifically to sales.

Customer Bounty: Pays the affiliate partner for every new customer that they direct to a merchant.

E-mail Link: An affiliate link to a merchant site in an e-mail newsletter, signature, or a dedicated e-mail blast.

EPC (Earnings Per click): Average earnings per 100 clicks. A relative rating that describes the ability to turn clicks into commissions.

HTML code: Refers to the lines of code that an affiliate places on their web page(s) for linking to the merchant’s site. This HTML code contains the unique identifier that identifies the traffic as coming from the Affiliate’s web site.

Impression: How many times a banner advertisement was displayed or viewed.

In-house: Alternative to using an affiliate solution provider; building and managing your own affiliate program internal to your company. Typically this is accomplished by purchasing a 3rd-party product such as Affiliate Wiz.

Manual Approval: Refers to the process of validating an affiliate application and then approving them after validation. This can also refer to the process of approving sales after they have been validated.

Merchant: The person or entity selling the goods or service. The merchant pays affiliates for sending traffic to the merchant’s web site after a product or service is purchased.

P3P Privacy PolicyPlatform for Privacy Preferences (P3P): A protocol defined by the World Wide Web Consortium (W3C) for sharing private information over the Internet. A Web site’s privacy policy is defined by the Webmaster answering a standard set of multiple-choice questions, which result in tags embedded in the Web site’s home page. Users also define their privacy requirements in their P3P-enabled browsers; for example, whether they allow their names disclosed to third parties. If the Web site policy and user preferences are not the same, the browser alerts the user.

P3P also assists with online sales. It lets users decide what specific data they are willing to divulge automatically to the site, such as shipping address and credit card number. If the site requests more data, the browser alerts the user, who can then decide whether to share it or not. For more information, visit www.w3.org/P3P.

Pay-Per-Sale: An affiliate marketing program that rewards affiliates based on each conversion to a sale such as when purchasing a product or service from the merchant’s web site. Pay-per-sale programs usually offer the highest commissions but tend to have the lowest conversion rates.

Pay-Per-Lead: Affiliate program that rewards affiliates for conversions to leads. A lead might include a sign-up form, software download, survey, contest or sweepstakes entry, signup for a trial, etc. Pay-per-lead generally offers midrange commissions and midrange to high conversion ratios.

Pay-Per-Click: Rewards an affiliate for each unique click to the merchant’s web site. This type of affiliate program is uncommon because of click fraud or fake clicks.

Performance-Based Marketing: Marketing in which the merchant only pays commissions for results such as conversions to sales or leads.

Recurring Commissions: The process of rewarding an affiliate on a recurring basis whenever the merchant charges a customer a recurring fee. For example, a web host that charges customers on a monthly basis might reward the affiliate a percentage of each month’s payment from the customer.

Residual Earnings: Programs that pay affiliates not just for the first sale a shopper form their sites makes, but all additional sales made at the merchant’s site over the life of the customer.

ROAS: Acronym for ‘Return on Advertising Spending’. This is the amount of revenue generated for every dollar spent on advertising. For instance, a ROAS of $1 means you’re generating $1 in sales for every $1 in advertising spend, and a ROAS of $5 means you generate $5 in sales for every $1 in spending.

ROI: Acronym for ‘Return on Investment’. This is what all marketing managers want to see from the money they spend on their marketing and advertising campaigns. The higher the sales, the large the number of shoppers and the greater the profit margin generated by sales – the better the ROI.

Spider Detection: The process of detecting and ignoring automated spiders or bots such as search engines like Google/Googlebot.

Super Affiliates: The highest performing affiliates. Typically less than 1% of affiliates are super affiliates yet that 1% typically will bring more than 90% of your sales.

Supplier (also referred to as Advertiser or Merchant): The entity or person selling the goods or service. Supplier pay affiliates for sending traffic to the merchant’s web site after a product or service is purchased.

Targeted Marketing: Offering the right offer to the right customer at the right time.

Tracking Method: The process or program used to track referred sales, leads or clicks. The most common are by using a unique web address (URL) for each affiliate, or by embedding an affiliate ID number into the link that is processed by the merchant’s software. Some programs also use cookies for tracking.

Text Link: A link that is not accompanied by a graphical image.

Tracking Code: Hidden 1X1 pixel tracking code that is placed on the confirmation page of the supplier store and used to track sales conversions.

Two-tier: Affiliate marketing model that allows affiliates to sign up additional affiliates below themselves, so that when the second tier affiliates earn a commission, the affiliate above them also receives a commission. Two-tier affiliate marketing is also known as MLM (Multilevel Marketing).

Unique Click: The process of only counting unique clicks from each web visitor. Unique clicks are typically tracked by recording the IP address and browser header.

Viral Marketing: The rapid adoption of a product or passing on of an offer to friends and family through word-of-mouth (or word-of-email) networks. Any advertising that propagates itself the way viruses do.

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