Everyone who enters the world of affiliate marketing has to deal with tons of new info. It’s an essential thing for newbies to learn how it all works in this business, who are the main players, what are the ways to earn good money etc. Still, the studying process might be too complicated because of specific lexis, which is used in the topic-related articles, forums, blogs and other educational materials.
If you don’t understand affiliate marketing terms, it’s often impossible to get the gist of the article you read. So, every newbie has to look through the list of basic definitions, and it should be the first step in the process of marketing education. Let’s find out what are the most important terms you have to understand.
Payout methodsWe all do it to earn good money online, so it seems to be wise to start with the ways you’ll be paid for your job. The first method is called Pay Per Click (Earnings Per Click). The abbreviation for this term is PPC (EPC). It’s probably the easiest way to make money in affiliate marketing, cause you’ll get reward every time your ad will be clicked. Looks great, but the truth is that no one will pay really big money for this. The mentioned method is good for newbies or as an additional source of income.
Let’s move on. The second approach you can work with is Pay Per Lead or PPL. This one requires more efforts from marketers but the reward is also higher than simple PPC. When you work on PPL basis, your goal is to deliver quality leads to advertisers. In affiliate marketing leads are potential customers, who are interested in the product being promoted.
The third method of payouts is Pay Per Sale or PPS. Everything should be clear here. You’re paid a certain amount of money for each sale. Your job is still to deliver potential customers, but you get reward only if they actually make a purchase. At the same time, the reward is way higher than PPL and PPC, of course.
The fourth approach is Revenue Share. RS requires substantial efforts from marketers, but the profit is also more than decent here. If you work on Revenue Share basis, you’ll get a % from every sale. The best thing about it is that you get it not only once, but every time the customer you’ve delivered makes one more purchase.
Buying trafficAffiliate marketers receive money for potential customers they deliver to advertisers, but where do they get these customers? There are several possible options and one of them is to buy traffic (people who visit websites and click on ads or links). There are a couple of terms related to this topic, which you should definitely know:
1. Cost Per Thousand Impressions or CPM. It’s also often called Cost Per Mile. This term stand for the amount of money you pay for 1000 views of your ad. The price isn’t usually high here. At the same time, there is a great possibility that some part of these viewers will actually click.
2. Cost Per Click. CPC is a certain amount you pay each time your ad is clicked. Why do you need that? Well, if you work with Pay Per Sale, this click may lead to purchase. Hence, your revenue will be the difference between your reward and the price of the clicks.
3. Flat. This term stand for a certain fixed price you pay to get a big amount of traffic. It’s used by affiliates to get guaranteed volumes of traffic. Not the best thing for newbies, but it allows experienced market players not to suffer from traffic lack under any circumstances. Though, even they have to be careful with this not to overpay.
4. Bid. This term is widely used by everyone who works with paid traffic. Bid is a certain amount of money you’re willing to pay for traffic you want to get. Wise bidding is one of the keys to success in paid traffic affiliate marketing, so make sure you look through some articles about it.
Your profit and campaign efficiencyThere are a couple of indicators, which can tell you how good your campaign is. The most commonly used one is Click-Through Rate. CTR shows how many of visitors who saw the ad actually clicked.
The result is shown as a certain percentage. Then goes EPC or Earnings Per Click. This metric will tell you how much do you earn on every user’s click.
The third indicator is eCPM. It helps you see what are your earnings per thousand impressions. The abbreviation stands for Effective Cost Per Thousand Impressions. The last metric is Cost Per Action or CPA. It simply shows how big your reward is for every required action your visitors commit.
There is one more indicator, which reflects the total efficiency of your marketing campaign. It’s Return On Investment or ROI. This metric is very easy to calculate, cause it’s the difference between your income and expenditures.
You can choose here any to earn.