Affiliate marketing: do you understand all the terms?
Affiliate marketing is basically paying others commission for advertising your products or service. It works because you only pay when the advertisement converts into a sale.
By Martina Mercer
Here are terms that you will hear a lot when you decide on affiliate marketing:
Publisher
Also known as the affiliate. These are the people that will advertise you. Some rely only on affiliate marketing streams for revenue such as discount voucher sites and comparison websites, some use you as an extra revenue stream such as on their blogs or existing website.
Successful affiliations rely on good management of the affiliates. See our article on how to manage affiliates effectively.
Network
An affiliate network is basically a linkage of everyone involved. Usually a middle man is needed to connect you to the affiliate and t manage the process properly. It takes time to ensure you reap a good reward from affiliates, so it makes sense to hire an expert. This isn’t your only option though.
Commission and Commission Tiers
Affiliates do expect a commission from featuring your ad on their site, and how much you pay depends on your budget. However, you may want to incentivise your affiliates by offering extra to the ones who generate the most sales.
Deep Linking
Affiliate marketing can be focused on your entire brand or one particular product. For instance Amazon give affiliates the chance to earn commission through advertising Amazon as a whole or leading visitors to one particular product relevant to the affiliate’s website.
Deep linking basically refers to the webpage visitors will land on wen clicking your advertisement. Be it your homepage, a special offer page, a registration page or a product page.
Conversions
You don’t need to be an affiliate merchant to understand conversion rates however when choosing this form of lead generation, your conversion rates do come under scrutiny.
For example, an affiliate will assess your conversion rates, and if they believe your website stops many from making a purchase (due to poor usability, site navigation, design or copy) they’ll choose a merchant that will give a better return. It is important before spending money on affiliate marketing that your website continues the sale from the first click on the affiliate’s website.
Otherwise an affiliate could promote you heavily yet neither of you get a return on investment.
Tony Saunders, the Vice President of VeriFone, explains how crucial the checkout process is for sales offline. He says: “I liken it to shopping in Harrods, for example, if I go to the store to find a pair of Italian leather shoes, a personal shopper will help me with my selection.
“I may spend twenty minutes choosing and in that time I’ve had personal attention yet when I’ve decided I’m told to go and wait in a queue to pay which ruins the entire experience. “
Cookies
Forget the personal privacy issues surrounding cookies. Although people view them with suspicion there’s no denying how effective they are for affiliate marketing.
Cookies gain tiny pieces of info from a visitors computer and can then be used to make your marketing message more bespoke.
Have you ever wondered how John Lewis seems to know you’ve been shopping for a sofa recently as you see the advert on a totally different page- such as next to your mail inbox? This is cookies at work. Effective, personal and incredibly intelligent.
