Affiliate Marketing Glossary Part 2

This is part two of  the Affiliate marketing  frequently used terms.

Commission: income an affiliate receives for generating a sale, lead or click-through to a merchant’s Web site. Sometimes called a referral fee, a finder’s fee or a bounty.

Cookies: small files stored on the visitor’s computer, which record information that is of interest to the merchant site. With affiliate programs, cookies have two primary functions: to keep track of what a customer purchases, and to track which affiliate was responsible for generating the sale (and is due a commission).

Contextual Link: integration of affiliate links with related text.

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

CPA (Cost Per Action): cost metric for each time a commissionable action takes place.

CPC (Cost Per Click): cost metric for each click of an advertising link.

CPM (Cost Per Thousand): cost metric for one thousand banner advertising impressions.

CPO (Cost Per Order): cost metric for each time an order is transacted.

eCPC: stands for ‘effective Cost Per Click’. Affiliates that earn on a CPA or CPO will back their numbers into an eCPC. It is calculated by dividing total earnings by their number of clicks. For example, if an affiliate earned $1500 from 3000 clicks, the CPC would equal $1500/3000, or $0.50.

eCPM: stands for ‘effective Cost Per Thousand impressions’. Affiliates that earn on a CPA or CPO will back their numbers into an eCPM. It is calculated by dividing total earnings by their number of impressions in thousands. For example, if an affiliate earned $1500 from 75,000 impressions, the CPM would equal $1500/75, or $20.00.

to be continued….