There is a number of terms frequently used in affiliate marketing. We wanted to give a quick description of the most common terms you can come across. It will give you a better understanding of affiliate marketing in general.

Merchant / advertiser

Merchants provide the product or service that affiliates represent with their online activity. So basically Merchants are the ‘shop’ or service provider.  They may operate their own affiliate campaign, or engage a network to help with the technology and relationship building.

Affiliate / publisher

The affiliate executes online promotion using websites, blogs, PPC marketing and other channels on behalf of merchants. This guide focuses on Cost per Acquisition / Action (CPA) as a reward method, though other reward models are available.

Affiliate Network

A network is widely acknowledged as the best way for a newcomer of affiliate marketing to gain exposure and results. Whilst one of the most successful affiliate campaigns is run independently (Amazon is a good example), other premium advertisers such as Vodafone, Air New Zealand, Glassons and Ezibuy use affiliate networks, demonstrating that Affiliate Marketing can deliver results across a wide range of vertical markets at the highest level.

Commission / reward

The commission is what the affiliate earns when they generate a transaction for the merchant. The conditions that must be met for a commission to be paid are set out in the programme that the affiliate is participating in.

CPA / Cost Per Acquisition or Action

CPA is the reward model used by most affiliate networks and independent affiliate campaigns. Cost Per Acquisition rewards the publisher for generating a positive action or transaction such as a purchase, registration or participation in a survey.

Affiliate Campaign

Also called an affiliate programme, the affiliate campaign refers to the entire affiliate proposition through a specific channel. For example, the entire activity on a specific affiliate network is an individual campaign.

Affiliate Programme

Some organisations term an affiliate “programme” to be the entire affiliate campaign for a merchant, while others use the term to describe specific elements of a campaign. For the purposes of this guide, we will use the latter. Merchants often need to offer different terms, rules or conditions to different groups of affiliate publishers, so they create “subgroups” or “programmes” for different partners. For example, a merchant may define three programmes – one for incentive affiliates, one for voucher code websites, and one for content publishers.

Simply put, a programme is an individual proposition designed to fairly reward affiliates.

The relationships

Performance marketing measures and rewards the contribution to each successful transaction. The following entities all contribute to the value path of a transaction:

Affiliates / Publishers

The term “Affiliate” spans a wide range of Internet publishers and media owners. These vary from hobbyists to multinational concerns that may have other areas of interest besides CPA marketing.

Most vertical sectors have an active eco-system of affiliates, advertisers and preferred advertising methods.

Merchants

Merchants provide the product or service that affiliates represent with their online activity. They may operate their own affiliate campaign, or engage a network to help with the technology and relationship building.

Networks

The affiliate model relies on accurate tracking of all clicks, leads and sales so that the correct commission can be allocated to publishers.

This is commonly looked after by a network, who merge technical resources, account management and relationship building to encourage growth and advance programme successes. In common with affiliates, networks earn the bulk of their revenue on a commission basis, so it is in their interest to help campaigns reach their full potential.

Agencies

As performance marketing has increased in popularity and importance, the skills and strategic outlook required to be a success have become an important commodity.

Many digital agencies now offer affiliate management and launch expertise on an outsourced or consultant basis. Affiliate management agencies such as Slice Digital typically represent several merchants on different affiliate networks and may specialise in specific vertical markets.

Now that you have a better understanding of affiliate marketing terminology, find out how to get started and start earning commissions in New Zealand with Slice Digital.