Affiliate Citizen

CPC, CPA, PPA? Eh?

If you are new to affiliate marketing you may well be daunted by some of the jargon that flies around the industry blogs or in conversation with merchants. Ive started this post to explain some of the abbreviations and jargon that surround marketing online, not only affiliate marketing. Lets start with a good one:

CPC - Cost Per Click - commonly referenced in relation to paid search (see later) cost per click is a measurement used to assess the cost to the advertiser (or affiliate) per 1 unique click from a user. A common value may be £0.25 CPC.

EPC - Earnings Per Click - This is very common in affiliate marketing as it provides a fair reflection of a program’s performance over time. Usually measured per 1 click (and sometimes per 100 but still referred to as EPC), the figures found here can help you make decisions about whether to promote a program. Good networks such as affiliate window list EPC for all of their merchants. The figure is calculated by taking the total commission made by affiliates promoting a particular merchant and dividing it by the number of unique clicks into that merchants program. So, for example if I made £50 from a merchant and I achieved that with 100 unique clicks the EPC would be £0.50.

Merchant - Merchants are the companies that participate in affiliate programs and provide commission to affiliates depending on various actions, usually through their website.

Networks - Affiliate networks are sites that bring together the advertisers (merchants) and publishers (affiliates). Advantages of networks over independant (in house) programs include network protection and ease of use.

CPA/PPA - Cost per Action  - The basic model for affiliate marketing, this abbreviation is used mostly by merchants to describe the cost to them for a particular action - which may be a sale or lead commonly.

Referrals - Similar to CPA, referrals in affiliate marketing describes the process of visitors being sent to a merchants website via an affiliate link and therefore being eligible for a CPA.

Tiered Program - A tiered program refers to a merchant’s offering to affiliates that pays out commission in increments depending upon criteria. These criteria are most commonly: volume of sales in a month or most improvement compared to the previous month.

Two Tier/2nd Tier - Two tier or 2nd tier refers to programs that allow affiliates to refer OTHER affiliates to the same program. The referring affiliate then is eligible for a commission % of the referred affiliate’s commission.

Paid Search - A favourite saying among agency types paid search refers to the advertising models of the search engines. So for example Google Adwords or Yahoo Search Marketing.

Organic/Natural Search - Organic search refers to the search results returned that are NOT PAID FOR. Sometimes called natural search, results are determined by a complex algorithm, taking in factors such as ‘pagerank’ and ‘trustrank’.

PPC - Pay per click - Commonly referenced in the context of paid search, pay per click refers to the advertising model by which most of the search engines charge their advertisers participating in their paid search programs.

Conversion Rate - Conversion rate is a relatively simple concept based around a percentage value. A conversion is achieved when the target user completes a specified action, which may be a sale or sign up. In general conversion rates around the 2-5% mark are seen as good in affiliate marketing.

Cookie Length - Cookies store the tracking information on the user’s browser which is vital to recording the origin of their click and therefore awarding the affiliate a CPA. The length of a cookie specifies when the tracking will expire. A common length is 30 days - so any sales made by that user in the 30 day period on the participating website will be credited to the affiliate.

Last Man In - Relevant to the cookie above and the usual model for affiliate marketing, last man in is the term used to describe how a merchant determines who to pay for a referral. If a user has gone through two or more affiliate links before making a sale the most recent (last man in) cookie is attributed the sale. Be careful of merchants who bid on their own brand in paid search and replace affiliate cookies with their own. When the ad is clicked any affiliate cookies are overwritten and commission is invalidated.

Cost per Acquisition - Easily confused with cost per action, cost per acquisition is used usually by merchants to assess the cost to them of ‘acquiring’ a customer or ‘acquiring’ a sale. Part of the cost in our context is the commission paid to the affiliate who referred the customer.

Product Feed - Product feeds have been the standard way of importing a merchants products into an affiliates site with the ability to deeplink into the merchant’s site via urls provided in the feed. Feed formats are usually in .csv (comma seperated value), .tsv (tab seperated value), .xls (excel) and standard html. Product feeds are one of the most useful aspects of an affiliate merchant relationship and form the basis for many of the more advanced techniques used in affiliate marketing.

API - A step up from product feeds and a method I strive to use as much as possible where redundant product data may be a problem. The Application Programming Interface allows affiliates to use the merchant’s internal systems via a common gateway. Messages are sent usually in the format of XML packets and are particualy useful in applications where data changes frequently.

 Ok thats all I can think of for now - ill add to this list when I think of more! Please do point out any ive missed by commenting!