A Brief Affiliate Marketing Glossary
Thursday, November 16, 2006
Have you come across various terms and acronyms in your affiliate
marketing business, but not understood what many of them mean? Well
here is a brief glossary of commonly used terms that should help
CPA - CPA stands for "Cost Per Action". This usually refers to lead
based affiliate programs. In other words: Instead of having to make a
sale before you get paid, you instead only have to generate a specific
action. Actions could include getting your visitors to fill in their
email address, request a free CD, or fill out a credit card
application. Once the action requirements are fulfilled, you are
paid... whether the visitor actually buys something or qualifies for
something doesn't matter. You're still paid because you generated the
desired action.
CPC/EPC - CPC stands for "Cost Per Click", and EPC is "Earnings Per
Click". You'll find the CPC version of this term used most when you're
paying to advertise something, but it's actually used in affiliate
program statistics as well. Why? Because it can help you determine how
much to spend if you decide to start advertising a given affiliate
program, and it can also help you determine if you make more with the
affiliate program that you do with a pay per click affiliate setup
such as Google AdSense.
EPM/CPM - EPM is sometimes reffered to as CPM: Earnings per million
and Cost per million respectively. The "Million" part of this term is
a hold over from the more traditional offline advertising industry. In
reality, this term is referring to thousands. If for instance, an
affiliate program shows you're earning $3 EPM/CPM, that means you're
earning - or paying - $3 for every 1000 views you've had on a given ad.
Many affiliates feel this statistic isn't very useful anymore, because
not many affiliate programs pay you for the number of views generated
on an advertisement. It can be more useful than you might think
though. If you have an affiliate program that shows an EPM of $100,
you can do the math to figure out how much more traffic you'll need to
generate in order to reach a specific goal you've set.
You can also use this metric for comparing two or more affiliate
products against each other. If one pays $10 commission for instance,
and another pays $50 commission, most affiliates would want to promote
the higher commissioned product. If however, your EPM stats show that
the $10 commission product makes $100 EPM, whereas the $50 product
only generates $25 EPM, you have concrete evidence that you can make
much more money with the lower paying product.
CR or C/R - This acronym stands for "conversion ratio". It tells you
how well a given affiliate product or program converts visitors into
sales. If you send 100 visitors to an affiliate product, and one of
them buys, that's a 1% conversion ratio. If however, 10 of those 100
buy something, then you've got a 10% CR.
CTR - This stands for "Click Through Ratio". If you've generated
100,000 visitors to your website, and they've all seen the affiliate
advertisement you have there but none of them click through... you've
got a zero percent (0%) click through ratio. And that's of course bad.
Your goal as an affiliate is to get the traffic to the affiliate
product so they'll buy it. So if you're advertising something but it's
not getting any clicks - either the ad is bad, or the product you're
advertising is not of interest to your traffic.
© 2006, Kathy Burns-Millyard. Want to learn more about <A
HREF="http://www.easysidemoney.com/affiliate-project-x.html">affiliate
marketing</A> now? Check out these excellent affiliate marketing
resources at <A HREF="http://www.easysidemoney.com">EasySideMoney.com</A>
posted by Dennis Cheesman @ 5:31 AM,
