Common Affiliate Marketing Terms

When you first get started with affiliate marketing it might all start to sound a bit like Greek to you, so here’s a primer on some of the most common terms used in the industry and no Greek required.

Cost Per Action or CPA:
CPA (Cost Per Action) is one of the most widely used affiliate models and rewards you, the affiliate, when a customer carries out a specific action such as filling out a form or making a purchase. The CPA value will usually be expressed as a monetary value ($25 CPA for example). CPA could also be expressed as a percentage of the sale value for example.

Cost Per Lead or CPL:
Some offers only require a potential customer to submit a particular piece of information to qualify as a completed action. That could be submitting a zip code for example or an email address. CPL pay-outs tend to be lower as the action required completes on one step.

Conversions:
A conversion occurs when a visitor to your website follows through to taking the action you want. That could be buying something, filling out a form or even just entering an email or telephone number. Once that action has been performed, you receive the agreed affiliate commission.

Conversion Rate or CR:
This is real juicy one and is essentially a measure of how many conversions a product is getting. CR is calculated by dividing the conversions by the number of clicks on a banner it took to get those conversions. CR is measure as a percentage.

Quick example. If a programme gets 100 banner clicks and 2 sales, the CR is 2/100, so 2%. The higher the CR is, the better the merchant website does at converting visitors to customers.

Earning Per Click or EPC:
This is one that very often goes hand-in-hand with the CR when you start evaluating merchants to promote. EPC is expressed as a monetary value and is the result of dividing the commission amount by the number of clicks it took to generate those commissions.

Say a product makes $2,000 from 500 sales. The EPC is $2000/500 which is $4. Again, the higher the EPC the better the particular product is performing.

Raw and Unique Clicks
How many total clicks your banners get and from how many unique visitors. For example if a visitor to your website clicks a banner 10 times, that’s 10 raw clicks and one unique click

Pay Per Click or PPC:
Probably the Grand-daddy of ad methods, PPC is a model when the advertiser pays when potential clients click on their ads. The biggest network is Google Adwords but there are other networks such as Bing and 7 Search along with social PPC networks such as FaceBook and POF.

Pay Per View or PPV:
Often referred to as CPV (Cost Per View) the concept is the same. Your ads are displayed as pop-ups on PPV networks based on keywords or URLs, depending on the model you’re using. There are a number of excellent PPV networks to work with such as LeadImpact and TrafficVance.