To get a solid grasp on the affiliate marketing industry, one of the first things you’ll have
to master is the actual terminology that is used by professionals. Now, you may think
that understanding the difference in language is nothing but a minor obstacle, but what do
you do when an affiliate asks for you to choose between a 20% PPS or a .35 PPL? There
is no getting around it, learning the lingo is part of the industry.
The Simple Stuff
Let’s start out with the basics. An affiliate program is nothing more than a written
agreement between a website owner and a company. It states how much money you will
be paid in commission and any standards that your domain must meet; all of it is fairly
standard. An affiliate network is almost the exact same thing, except it is one company
that allows you to sell multiple brands. Enrolling in either of these programs allows your
website to make money by advertising their products.
The ultimate goal of any affiliate marketing program is sales and there is a number of
ways for you to be paid. Sometimes you will agree to a pay per sale (PPS) program that
will pay you a percentage of anything that your readers buy from the affiliate. A pay per
click (PPC) campaign give you a small amount each time a reader clicks on the link to
visit your affiliate, and a pay per impression (PPI) goes one step further by paying you
every time someone visits your web page and sees the affiliate ad. There is also a pay
per lead (PPL) which is similar to a PPC, except that the affiliate will expect your reader
to submit their email address, register at that website, or maybe even complete a survey.
Advertising
Now, you may have seen the word contextual advertising thrown around a lot lately;
many people call it the next big thing in Internet advertising. Contextual Advertising
is something like a smart ad in that it scans the user’s computer cookies and generates
custom advertising based on their recent web searches. If you visited a toy store
shopping for a child’s birthday, for example, then websites with contextual advertising
would match you with affiliates that sold similar products.
Once you get your website up and running, you’ll have to decide what type of advertising
will work the best with the space you have set aside. Banner ads are pre-designed boxes
that come in many shapes and sizes; some may have cool graphics while others simply
show products or logos. You could also opt to go with a text ad since it would blend
right into the page almost like there was no advertising there at all.
The Numbers
Affiliates measure your success based on a few key areas, so it probably would not hurt
to know the terminology there either. They pay very close attention to the cost per lead
(CPL) or cost per sale (CPS) to make sure that they are not overpaying you for their
services; some websites generate tons of clicks for businesses but their conversion rate
(the rate at which customers buy something) seems questionably low. The cost per
thousand impressions (CPM) is also a key statistic to make sure that affiliates spend
their advertising dollars wisely.