The sooner you learn and understand the Affiliate Marketing terminology commonly used the faster you will be able to promote the products or services in the most advantageous and beneficial manner. The other terms can be picked up as you go along.

Affiliate Marketing:

Also known as Performance-Based Marketing is a system where referring sites receive a commission from merchants on leads or sales generated.

Affiliate Program:

This is also known as Associate Program, Partner, Referral or Revenue sharing program. In this program the merchant rewards the affiliate for web traffic, sales or leads on a pay-per-click, pay-per-sale, or pay-per-lead basis.

Affiliate Agreement:

Terms between a merchant and an affiliate that governs the relationship. This specifies the terms on which the affiliate will be rewarded for the visitors sent to the merchant's website.

Affiliate Link:

This is a unique URL tracking link that identifies the affiliate and sends traffic to the merchant's website. These links can be simple text links, images or product links, etc.

HTML Code:

This is the lines of code that affiliates place on their web pages for linking to the merchant's site. This HTML code contains the unique characteristics that identifies the traffic as originating from the Affiliate's website.

Pay Per Click:

Merchant offers money often a small amount, to the affiliate every time a visitor is sent from the affiliate's website to the merchant's website. A payment is made even if the visitor he referred does not purchase anything from the merchant's site.

Pay Per Lead:

Merchant rewards affiliates for conversions to leads. A lead could be filling a signup form, software download, participating in a survey, contest, signup for a trial, etc. Pay Per Lead generally offers midrange commissions

Pay Per Sale:

Merchant pays money each and every time a visitor sent from your website actually buys some product offered from the merchant's site. The money paid is much higher than in Pay Per Click or Pay Per Lead programs.

Earnings per hundred clicks.:This is the most commonly used terminology for determining the financial return provided by an affiliate programme. It refers to the average earnings of affiliates for every hundred clicks they deliver to the merchant.

Click Through:

This is when a web user clicks on an affiliate's banner or link and is directed to the merchant's site.

CTR: Click Through Rate:

This is calculated by dividing the number of clicks an ad receives by number of impressions made. Thus if a banner ad was shown 100 times and received 15 clicks it would have a click through rate of 15%.

Google Adsense:

This Google programme offers website owners the opportunity to include ads from its pay per click advertisers. Website owners are paid a percentage of the click cost to advertiser when one of these Adsense ads is clicked.

Above the fold:

Means the section of a web page which can be seen without scrolling. Links and ads above the fold are more likely to be clicked especially by webmasters when placing Google Adsense ads.

Two-tier Program:

Affiliate marketing model that allows affiliates to sign up additional affiliates below themselves, so that when the second tier affiliates earn a commission, the affiliate above them also receives a commission. Multi-tier affiliate marketing also works the same way; the affiliate gets additional commission for a wider number of affiliates in different tiers in the affiliate network.

Residual Income:

Here the affiliate gets paid not only once for every customer he has referred to the merchant's site but also he gets paid whenever the customer he has referred returns to the merchant's site and purchases other products.

An affiliate who understands the affiliate marketing terminology always has the advantage of comparing the benefits of the different affiliate programs and also promoting them to obtain the maximum rewards for his efforts.