Affiliate Marketing • 49 min read
Are you fluent in Affiliate Marketing language?
Knowing what words to use is crucial for navigating this new terrain: setting up the right kind of deals, measuring results, and scaling your affiliate channel.
So if you’re new to this kind of marketing or just need a refresher on how to use the lingo like a pro, you’re in the right place. This glossary shares all of the commonly used Affiliate Marketing terms and what they mean, and where appropriate, some examples to help get a feel for how they’re used. Settle in, class! It’s time for your vocabulary lesson.
Affiliate Marketing Terminology A-Z
A marketing strategy where a company or online retailer offers a commission to an external party for sending demographic-specific traffic to their offer or site. This can also extend to generating leads for the retailer.
An Affiliate sends traffic in one direction: toward your offer. They send traffic to offers for payment based on results, often commissions or Cost Per Acquisition (CPA). Affiliates are not employees and do not work directly for you. They can take several forms, including but not limited to:
- Email marketers
- Media buyers
- SEO review sites
- Content writers
- Social media influencers and more
Affiliate 2nd Tier:
This is a great way to improve recruitment and scale your affiliate program. An affiliate 2nd tier is a system where an affiliate can recruit other affiliates to promote your offer and get a part of commission on the sales of the affiliates they enrolled.
An Affiliate Center is an online platform designed to house your affiliate program. The center is where you can access your affiliates, finalize deals, pay affiliates, and share promotional assets for affiliates to use.
Affiliate Promo Checklist
The affiliate promo checklist is a quick guide of exactly what the affiliate needs to mail your offer to their list.
Swipe copy is the asset your affiliate needs to email to their list. This includes one or more emails they can copy and send to their list, plus any graphics or images for that campaign or offer.
For your affiliate to be successful, they need to be able to track their results. The best way to show their success is through tracked links. Most affiliate centers will populate the proper tracked links for your needs.
Commission numbers are the exact possible earnings that your affiliates can make when they get the desired results for your campaign or offer. This may be in the form of a commission or a flat payment for each conversion they get for you. Either way, the affiliate will need to know their exact payment structure to incentivize them to promote for you.
W9s are tax forms needed from your affiliates in the US. Affiliates are set up as nonemployees but will still need the proper documents to show their commissions and income from affiliate work with you.
Basic offer info
The affiliate will need to know information about your product or service and any special promotion or deal going on to promote for you. For example, if you offer 5 percent off to each new customer who purchases through your affiliate, these details must be included and shared with the affiliate.
The last item you need is a structured deal agreed upon by your affiliate. Think of this as the contract that binds you both to your agreement. This will break down the affiliate commission, clearly outline the rules for their promotion of your offer, and the timeline for when they will be paid.
An auto-responder is a sequence of emails that goes to a customer automatically after they purchase and get their thank you email. These emails can be content, additional offers, or a combination. Typically, these emails are designed to be sent over a specific period, and then after those emails are sent, the customer will end up inside the main email broadcast list. Auto Responder flows are usually sent for at least seven days and are sometimes as long as three years.
Average Cart Value (ACV):
The Average Cart Value, or ACV, is the total average amount of money that an offer generates. This is calculated with all upsells, cross-sales, and downsells. A higher ACV means that you and the affiliate make more money.
Banner ads are ways for affiliates to promote your offer on their website, newsletter, or email. Banner ads are visual graphics showing the offer and deal being promoted. Typically banner ads do not perform as well as regular emails but can still be more effective than organic social media posts.
Click swap is a popular and straightforward affiliate partnership deal where you send a certain number of clicks in exchange for, in most cases, the same amount of clicks in return. This can also be part of a reciprocal or “recip” deal. An example is when you send to your email list to drive 25,000 clicks to your partner’s offer, and they, in turn, send emails to their list to get 25,000 clicks to your offer. This is a total of 50,000 clicks being exchanged.
Cold traffic is typically an ad strategy targeting people unfamiliar with your offer. While this method is suitable for lead generation, it typically doesn’t convert very highly. Cold Traffic sources generally are cold emails, ads on social media or Google.
Commissions are the amount of money an affiliate or JV partner makes as a percentage of the sale or conversion. Some commission structures pay once, and others pay throughout the purchasing lifetime of the acquired customer. Commissions very but are typically between 50-75% for digital products and 30-40% for physical products.
Continuity defines how long a customer stays around and continues to purchase. Continuity can be measured monthly, quarterly, or yearly. The longer a customer lasts with your company, the higher your LTV or Lifetime Value is. This can also help you determine if your offer is a good candidate for a CPA or flat rate cost per acquisition.
Conversion Rate (CR):
The conversion rate is calculated by how many clicks it takes to get a sale or conversion. A higher conversion rate makes you more money and makes it a more attractive opportunity for an affiliate. By targeting the correct demographic and having a solid funnel, you should be able to continually improve your conversion rate.
Cost Per Acquisition (CPA):
For affiliate marketing, Cost Per Acquisition is the one-time, flat fee that affiliates earn when getting a sale. The CPA structure doesn’t include lifetime value or upsells. Some companies can offer a higher CPA because they know they will make money back on the lifetime value of their customer. In this case, an affiliate can make more than the initial sale price of the product.
Cost Per Click (CPC):
Because every click costs you money, the CPC refers to the cost of buying media. CPC is calculated by dividing cost by clicks. For example, if you paid $2,000 for an email drop and you received 4,000 clicks, that means it cost you $0.50 a click.
Cost Per Lead (CPL):
CPL is the payment an affiliate partner is willing to pay for email addresses in opt-in sales funnels. It also applies to media buyers, but in this case, the amount is per lead. Sometimes as a business owner, you do not need an affiliate to drive your sales; perhaps you are a coach or running an online course, for example. In this case, getting a strong list of leads is exactly what you need to reach your goals. In this case, you would pay the affiliate a flat fee for each lead they get for you.
When you and your affiliate partner’s customers are very similar, this is called a demographic match, and it’s the perfect opportunity to test each other’s offers. For example, if you have a list of women ages 45 and up who are interested in supplements, and you team up with someone with a similar audience of women 40 and older who enjoy working out, this can make a really strong demographic match, with benefits for audiences and affiliate partners alike.
Earning Per Click (EPC):
Measures how well an offer converts; the EPC is calculated by dividing sales by clicks. If an affiliate has $1,000 in sales, and they sent 1,500 clicks, the EPC is $0.66. The ideal EPC is at least $1.
Email List or “List”:
A company’s email list refers to the subscribers (leads), and buyers (customers) who opted in or bought their products or offers. The larger and more active the list, the better and more attractive it is. Affiliate marketing is strongly built around email lists and email marketing, as it is the most common and logical method for affiliates to drive traffic to your offer. It is customary to ask a new affiliate what the size of their “list” is to ascertain how many email addresses are on their list.
Offers that can be delivered 365 days a year without restrictions are called evergreen offers. Those with restrictions include product launches and coaching programs that can only take a certain number of enrollees, for example. Also, the price of an evergreen offer remains consistent year-round, whereas when a launch or summit ends, it often increases in price.
External JV (Joint Venture) Policy:
An external JV policy is posted on your website or portal to state your commission structure, cookie duration, how often your affiliate gets paid, demographic information, best practices, etc.
High Ticket Offers:
A high-ticket offer is an expensive offer, product, or service, usually costing over $500.
This is a digital product that shares information as opposed to a product or service. Because it is shared via formats like PDFs, video modules, and downloadable products, it offers a higher profit margin opportunity.
Internal JV Policy:
This internal policy is used as a guideline for interactions with affiliate partners. It is intended for your company’s use only and should not be shared with affiliate partners as it includes details such as how high you will go for CPA partners on volume.
The intro swap is an introduction to a new JV partner in exchange for you introducing someone to one of your JV partners. It is an effective way to grow your business and increase your potential to generate hundreds of thousands of dollars a year when successful. Intro swap best practices include:
- Matching the number of people and the type for each swap.
- Asking people if they want to be introduced, and if so, how.
- Always asking permission to introduce a client or a large affiliate.
Better known as a “JV,” a joint venture creates a partnership between two affiliates with reciprocation on both sides. Typically JVs involve reciprocal mailings on an appointed date. JV partners are always two ways, unlike affiliate partners which are one-way.
A launch introduces a new product or offer or re-launches a product or offer with optimizations. A group of affiliates mail the offer for an agreed-upon period of time and compete for prizes and positions on the leaderboard based on the success of their mailings. A strong offer helps raise cash quickly, with more affiliates willing to mail or support it.
An easy and effective way to grow your email subscribers list, you and your affiliate partner swap leads without counting clicks. The logic is that clicks will typically be off anyway because different offers convert differently. However, you usually keep the commission on both sides unless you decide to do it for leads only.
Lead Generation Offers:
These offers are not direct-to-sale. Instead, they usually offer something free, like an E-book. Upselling is also involved in increasing Average Order Value (AOV) immediately after the customer provides their email address, either directly on the confirmation page, further down the funnel, or using an Auto Responder.
When you set up an affiliate with your promotional material, you must also provide them with a tracked link. Your affiliate management software should provide you with a tracked link showing clicks, leads, sales, and affiliate earnings.
Without the proper link system, you will quickly lose your affiliate’s trust because they will not be able to see how much money they made, and you will not be able to pay them accurately. We highly recommend you double-check and test all of your affiliate links to ensure they are working before sending the link to your affiliates.
What is a tracked link?
The crucial part for the affiliate is the special code added to the end of the URL where your offer is on your website. The TID or Affiliate Tracking ID will ensure that the activity from that link is tracked properly.
How to Double-Check your Affiliate Links
When testing your affiliates’ links, ensure these two things:
- The link goes to the right offer. This means clicking on the link and making sure that it lands on the sales page, lead capture page, video page, etc., for your promotion. Checking links before adding them to affiliate emails is standard practice.
- The link is attached to the correct affiliate. When you test the link, make sure the credit goes to the right place and that you do not accidentally link to a different affiliate.
Platforms like GoldenBerri.com or Everflow.com are what makes this an affiliate system, as opposed to a regular online shop, is a tracking code software and system that ensures visibility into who is getting customers to your site and helps paying out your affiliate commission on time.
List suppression is where an email provider blocks or limits your emails from delivering to or being seen by your list. This can happen when you get too many spam complaints. When this happens, your email lands in the spam folder and not in the inbox of your reader. This greatly impacts your ability to be seen and get clicks and sales.
Avoid list suppression by removing addresses from your list that are inactive or bounce back. You can also let your JV partner know who has opted into your list so that they can stop sending your offer to those specific people. This will help reduce spam complaints and keep your list healthy and happy.
Email compliance is crucial if you want to succeed in affiliate marketing. To remain compliant, you must only send emails to people who have given permission to be emailed.
A physical offer is a product that you can touch. These are supplements, books, DVDs, and other products that physically show up at a customer’s house as part of the sale. Purchasers are less likely to request a refund for physical products because they don’t want to go to the trouble of mailing them back.
Reciprocal aka “Recip”:
A Recip is a reciprocal action where you return a partner’s traffic, or they return traffic back to you. This is part of a Joint Partnership (JV) and happens when you mail to your list for your partner’s offer, and they mail your offer to their list in order to drive the same amount of traffic back to you.
Another type of recip is being on each other’s podcasts, webinars, social media posts, etc.
A solo email is a type of email blast where only one offer is promoted. This strongly improves the performance of the offer sent by that solo email.
A sponsored email is a type of solo email that shows that it is from a 3rd party by saying things like “From our friends at…” or “Sponsored By.” This type of email is less effective but still sends good-quality traffic to the promoted offer. Other terms for this intro disclaimer are an editor’s note or a lift note.
A straight-to-sale offer goes directly to the offer without adding an email address. This front-end offer is common in the industry and typically comes with upsells. Similar to a store like Amazon, the shopper can usually go straight into the product pages and purchase with ease and without going through a layered sales funnel.
A supplement is usually a pill, powder, cream, or spray that can be added to the body or ingested. These supplements are designed to have a benefit when used. Supplements include vitamins, protein powder, pain relief sprays, and more. Supplements usually have a low-profit margin, so it is more difficult for the merchant to offer free products as part of their deal. It is also common to have higher price points and encourage auto-ship subscription models.
Swipe copy is content for an affiliate to use in promoting your offer and comprises a subject line, body text, a tracking link, and sometimes graphics.
This is a promotional strategy where someone buys a low-cost and low-risk product in order to get them into your sales funnel. This person is then offered upsells or other promotional deals. This method increases the average order value (AOV) and can also help build a strong email list quickly.
An upsell is an additional product, program, or bonus that is offered as an add-on for a front-end offer. The upsell increases that customer’s lifetime value as they spend more money than the original front-end offer.
Warm traffic comes from a trusted source with an already-established connection. This is typically in the form of an affiliate or partner’s email list. They are often in your demographic and have already proven interested in offers like yours. Warm traffic can also come from social media, SEO, podcasts, or other sources online.
Need more help understanding vocabulary and putting it into practice?
There are so many terms to know with Affiliate Marketing that, by now, your head may be spinning from all the information.
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