Affiliate marketing can be a somewhat confusing territory, especially for those who just started going down this road. In order to get accustomed with affiliate marketing, both new affiliates and advertisers must know and understand the lingo and terms of affiliate marketing.
Therefore, we decided to help beginners with explanations on the most common affiliate terms we’re using, so that affiliation with 2Performant can be made easy, safe and enjoyable.
Action – an event on an advertiser’s site for which he/she pays a commission. An action can be considered a sale or a lead (filling out a form, subscribing to a newsletter, etc.), depending on the characteristics of the products/services that are on display.
Advertiser – also known as merchant, is a company that manages one or more presentation sites or online stores by selling products/services, accepting payments and executing online orders. The advertiser runs an affiliate program through which he/she provides affiliates several tools to promote their products or services.
Affiliate link – an unique link generated by 2Performant for each affiliate who is approved in affiliate programs inside the platform. This link is mandatory, in order to track and identify the affiliate who sent users to the advertiser’s site. Each affiliate link contains the unique affiliate code that identifies that specific affiliate inside the platform. Through this link, the advertiser can identify which user has come through which affiliate, so that the latter will receive the corresponding commission amount.
Affiliate manager – a person responsible for managing and monitoring the affiliate program. An affiliate manager can be a dedicated affiliate person, either a marketing personnel to handle this activity or a store owner who takes care of all of the operational and marketing aspects.
Typical activities include:
- Setting up the affiliate program;
- Affiliate recruitment and activation;
- Affiliate management and activation;
- Commission processing;
- Management of the promoting tools available in the affiliate program;
- Communication with affiliates.
Affiliate marketing – a type of performance-based marketing that describes the relationship between an advertiser and an affiliate, where the latter sends users to the advertiser’s site and is paid only when a specific user takes the determined actions by the advertisers (sales or leads).
Affiliate network – in our case 2Performant – is a third party that manages affiliate programs. 2Performant provides the technology necessary to track affiliate efforts, makes sure that sales are properly monitored and commissions are paid to affiliates and also helps display the affiliate programs to potential affiliates within the platform.
The network allows advertisers to run affiliate programs in order to promote their site and their products/services through affiliates.
Affiliate program – a marketing program built by the advertiser, that allows affiliates to recommend its products or services, in return for a commission that is offered based on the advertiser’s desired action (sales or leads). The affiliate program provides affiliates the right promoting tools, information about the products and any relevant marketing data that may help affiliate promote the advertiser’s site.
Affiliate – might be a publisher, blogger, SEM specialist or any online marketer – is a natural or legal person that promotes an advertiser’s products and/or services in return for a sale or lead.
Approval Rate – is an indicator found in 2Performant network, seen by all platform users, which sets the commission approval rate. If the approval rate is high, it means that the commissions are approved in time and affiliates are more and more motivated to apply to the affiliate program.
Approval Time – is an indicator found in 2Performant network that establishes the automatic approval time. If generated commissions in an affiliate program are not processed in time, they will be automatically approved after a period of time set by the affiliate manager of that program.
Banner – is a promoting tool made available by the advertisers to all affiliates. They can be either static or animated flash/gif files through which a commercial message is sent for conversion purposes. Banners are the most common used promoting tools and can vary in size. However, 2Performant offers a few standard dimensions for uploading them into the platform. The most used sizes are: 300×250, 728×90, 160×600, 300×600, 120×60.
A 2Performant affiliate program can be started with at least 3 banners, but our recommendation is to add as much banners as possible and renew them periodically, especially on special offers or promotional campaigns.
Blog – short for Web Log – is a website that contains regular posts and encourages user interaction.
Bonus – a way of compensating affiliates designed to activate and increase affiliate actions inside the affiliate programs. These bonuses can be granted either individually for best performing affiliates or for the entire affiliate program on different special occasions (e.g. seasonal bonuses for Christmas, Black Friday, etc.).
Each time an affiliate is on one of the pages of a program that he is approved in, he/she can click on that bookmarklet and, on the top of the site’s page, an affiliate link will appear to promote the desired product/service.
Challenge – method used by 2Performant advertisers to increase affiliates, activate passive affiliates or to motivate best-performing affiliates in an affiliate program. It’s a perfect way to improve the results of a program by offering bonuses or prizes to affiliates that have generated conversions above a certain threshold.
Commission – the amount of money registred in an affiliate’s 2Performant affiliate account for an action taken by a user that was sent by that certain affiliate on the advertiser’s site. The commission may vary from one affiliate program to another and can come in three different types: fixed, percentage and variable.
Commission – fixed – for a sale and/or lead action, the advertiser pays the affiliate a commission represented by a fixed amount. For example, an advertiser can offer affiliates a commission of 25 euro/sale or lead.
Commission – percentage – for a sale action, the advertiser pays the affiliate a commission represented by a percentage amount. For example, an advertiser can offer affiliates a commission of 10% of the total value of a sale.
Commission – variable – for a sale action that involves more than one product, the advertiser pays the affiliate a commission represented by a variable amount for each product, depending on its category. For example, an advertiser can offer affiliates a 10% commission for a product category (women’s clothes) and a 15% commission for another product category (women’s shoes).
Conversion – an event that occurs when a user/customer that was sent by an affiliate to the advertiser’s site, performs an action (sale or lead) for which the advertiser is willing to pay. Affiliates earn commissions only when users are converting the desired actions.
Conversion rate – the percentage of users who have performed an action, either purchased a product from an advertiser’s site (sale) or filled out a form/subscribed to newsletter (lead).
In 2Performant, the conversion rate is an indicator used to show how many conversions were made by affiliates, in relation to the number of generated clicks. To find out a conversion rate, calculate the sum of all generated sales divided by the total number of click, and multiply the result by 100 to find its percentage. For example, if a product on the site has 100 clicks but generated 2 sales, then those 2 sales are divided by 100 clicks. The result 0.02 is then multiplied by 100 in order to get the percentage, so the conversion rate is 2%.
Cookie – a small text file that is sent from a site and stored in the user’s computer. The cookie contains all the information necessary to assign a commission to the affiliate that directed the user to the advertiser’s site, such as unique affiliate ID and cookie expiration date (cookie life). After a period of time, equal to the cookie life, the cookie is deleted and is overwritten in case of change.
2Performant cookie is set on each browser for each affiliate program.
Cookie Life – is the period of time during which all actions made by a user, directed by an affiliate on the advertiser’s site, are commissioned by that particular affiliate. It is an affiliate program parameter that is (re)activated at each user click on an affiliate promoting tool.
Only the last affiliate who has sent the user to the advertiser’s site will receive commission for the actions that were made.
Cookie stuffing – a fraudulent practice that underhandedly places cookies from advertisers onto users computers when the user has never visited the site through the affiliate’s link and probably never intended to visit it. This practice is designed to store as many cookies as possible onto as many user computers as possible, in hopes that they will eventually visit advertiser’s site and at some point generate conversions.
Cookie stuffing is a fraudulent practice and is heavily looked down upon by legitimate affiliates. Both 2Performant and the advertisers enrolled in the platform, prohibit the use of this practice.
Cost per Action – is a payment model in online advertising, which involves paying only for an action made by a user directed by an affiliate on the advertiser’s site, Basically, the advertiser pays only for the actions that were determined in the affiliate program: sale and/or lead.
Cost per Click – is a payment model determined by the total amount of commissions divided by the number of clicks generated over a given period of time.
Cost per Sale – is a payment model determined by the total amount of commissions divided by the number of sales generated over a given period of time.
Meanwhile, if you want to discover new term and you need us to explain them, just log in to your account and navigate through the platform. We’re looking forward to your proposals!