Affiliate
An independent party that promotes the products or services
of a merchant in exchange for a commission. Other terms include
associate, agent, partner, referral partner, or reseller.
Affiliate Program
Is any type of program where an affiliate web site receives
income for generating sales, leads, or traffic to a merchant web
site. Also called associate program, partner program, referral
program, reseller program, or sponsor program.
Click-Through Ratio
Sometimes referred to as a click-through percentage. The
percentage of visitors who click-through on a link to visit a
merchant's web site.
Conversion Ratio
The ratio of visitors from your site that result in a sale,
lead or click and go on to earn the you a commission. A conversion
ratio of 5% would mean that for every 100 visitors to your site, 5
would click-through, complete an action and earn you a commission.
Commission
The money earned for generating a sale, lead or click-through
to a merchant's web site. Also reffered to as a bounty, finder's
fee, or a referral fee.
Cookies
Cookies are small files stored on the visitor's computer
which record information that is of interest to the merchant site.
With regards to affiliate programs there are two primary uses for
cookies. The first is to keep track of what a customer purchases and
the second is to track which affiliate was responsible for
generating the sale.
CPM
Used by programs that pay on an impression basis and is based
on the amount earned per 1000 ad displays. For example, a $5 CPM
means you earn $5 every time 1000 ads are displayed on your site.
Some of the earn money surfing programs pay based on CPM.
Merchant
A company or person that has set up an affiliate program and
has agreed to share a commission with affiliates who promote their
web site, products and/or services.
Pay-Per-Click
You receive a commission for each click (visitor) you refer
to a merchant's web site. Pay-per-click programs generally offer
some of the lowest commissions. The conversion ratio is very since
visitors need only click on a link to earn you a commission.
Pay-Per-Lead
You receive a commission when for example, the person
referred from your site completes a survey. Other examples would
include someone completing a contest or sweepstakes entry form,
downloading software demos or free trials. Pay-per-lead will
generally offer mid-range commissions. The conversion ratios are
usually mid-range to high because no purchase is necessary.
Pay-Per-Impression
You receive a commission each time that a merchant's ad or
link is displayed on your site. Pay-per-impression generally offers
the lowest commissions.
Pay-Per-Sale
You receive a commission for each sale of a product or
service that you refer to a merchant's web site. Pay-per-sale
programs usually offer the highest commissions and the lowest
conversion ratio.
Residual Commission
Residual commissions refer to programs that provide
affiliates the ability to earn an income, month after month, for
referring a sale to a merchant. Examples include web hosting, tele-
communications, and ecommerce solutions. These programs allow
affiliates to earn income for an extended period, perhaps even
years, from a single sale.
Tracking Method
Tracking refers to the way that a program tracks 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.
Another way is to track visitors using cookies.
Two-Tier Commission
Two-tier refers to the practice of a merchant paying
commissions to both the affiliate that referred a sale, lead or
click, and the affiliate that referred that affiliate to the
program.
