What the Heck is an Affiliate? The Diverse Lexicon of Affiliate Marketing
So, what is an affiliate? To you, the answer is obvious, something that effortlessly jumps to the top of your mind. But did you know that there are at least four distinct definitions of the word “affiliate” being used across our industry?
In this article, I provide a breakdown of the use and meanings of this word, along with all the other primary words used in different contexts within Affiliate Marketing.
I’m Not an Affiliate, I’m a PUBLISHER
At the recent Affiliate Summit West 2014 in Las Vegas, I overheard a conversation in which someone was asked if they were an “affiliate.” In reply, they curtly pointed out that they weren’t an affiliate at all, they were a “PUBLISHER.”
As a webmaster who promoted affiliate offers, of course she was an affiliate… wasn’t she?
There are four unique definitions of the word “affiliate” being used across the different types of affiliate networks and platforms within our space….
- Publisher Networks / In House – Many times in this context the word “affiliate” is commonly thought of as a web publisher. While many emailers and media buying arbitrageurs exist in this space, the word “affiliate” is most often thought of as a website publisher or just the stand alone “Publisher.” Network Examples: Share-a-Sale, Commission Junction, LinkShare. Saas/Software Examples: HasOffers, Cake, PostAffiliatePro.
- CPA Networks – In a CPA network, an affiliate is largely someone who arbitrages media buying to direct traffic to offers from merchants. The affiliates will sometimes use jump pages (interstitial pages) on their paid traffic, but mainly focus on driving traffic directly to the advertiser’s landing page. Examples: Clickbooth, Neverblue, Max Bounty
- IM – An affiliate in the “Internet Marketing” world is often times a person who is selling educational videos or ebooks. The “merchant” also sells educational videos or ebooks, and both parties will promote each other’s products to their respective email lists through a “cross promotion.” These affiliates are also called “JV Partners” or “Joint Venture Partners.” Unlike Enterprise and CPA affiliate programs, where the promotion is one-way, in the IM world the promotion is often a two-way street.
- The Lawyers – The word “affiliate” has a very specific legal definition and, along with that, obligations and liabilities. When lawyers start reviewing affiliate agreements and T&C’s, you’ll often get a raised eyebrow. This is one reason why you’ll see many programs call their affiliates things like referral partners, associates, resellers and a whole host of made-up names to keep from using the word “affiliate.”
Merchants, Advertisers and Offers, Oh My!
So I have a product I sell and I want other people to help me promote it in exchange for commissions. What am I?… Again, the answer isn’t as simple as you think.
For me, the answer is that you’re a merchant, but for companies with a diverse online marketing portfolio, they might see themselves as an advertiser. To help keep the conversation going, in many merchant/affiliate relationships the label “advertiser” can be more palatable for one party or another.
Similarly, the use of the word “offer” can cause confusion. This confusion is driven by the idea of an “offer” being a temporary thing such as a special promotion. Of course in the affiliate world, many offers are permanent or semi-permanent and can simply refer to the ability to earn commissions by promoting a merchant’s products or services.
Capital Letters and Internet Marketing
I started attending The Internet Marketing Party in Austin, TX (where I’m from) a few months after starting my business in early 2010. I had been involved with Internet Marketing since 1996, so I figured I’d go to this Internet Marketing event, meet some folks and learn some cool stuff.
I did end up learning great tips about driving traffic and converting visitors, but I started to notice a trend. Every presenter, every month was selling a video course. Man, these organizers sure know a lot of people into video.
Finally, after hanging with these great people for about a year, I was turned onto an article that was talking all about the world of “Internet Marketing.” The article used words like “affiliate” and “Internet Marketing” in ways I had never seen in my then 14 years in this business. I was amazed.
As it turns out, the Internet Marketing world (note the capital “M”) refers to the world of video publishers who engage in Joint Venture relationships like the ones I described in the affiliate section earlier in this article.
For my friends at these events, their idea of Internet marketing and what it means to be an affiliate is different than my own, different down to our very core. I even remember having a debate once on what “old school affiliate marketing” really was (web publishers vs. JV partners). While I don’t have proof to settle this argument, it doesn’t really matter because to each of us our understanding of affiliate marketing was the “old school” version. That’s awesome.
CPA , PPC & Weird Questions
“You’re into affiliate marketing. Can you recommend a CPA?”
Woah. What do I do with that question?
This was asked of me recently at a meetup, and as I sat there staring blindly into space wondering what exactly this guy meant, it crossed my mind… oh, he needs help with his bookkeeping!
Aside from the cross-industry confusion over what CPA means, there are very unique understandings within our industry over the exact definition.
For those who cut their chops in PPC (particularly Adwords), the concept of CPA refers to the cost to acquire customers in a general sense (how much did you spend vs. number of conversions). Many people in our industry see CPA as a generic term that applies to affiliate marketing, display, ppc and much, much more. It’s used more as a KPI value rather than a reflection of a space in the industry. Additionally, CPA can refer to sales or leads and people will often not differentiate between CPA, CPS, or CPL and just use the broader term “CPA.”
Of course, CPA does have an industry context when used within CPA networks. In these cases, CPA is largely used to describe the world of commission-based ad arbitraging in addition to the concept of commissions being offered per acquisition. You’ll often times hear people referred to as a “CPA” or a “CPA affiliate.” Just like the world of “Internet Marketing,” the term “CPA” is used to describe a section of our industry, rather than just the literal meaning of the term.
Jolly Old England
Now all this talk about different uses of terms across our industry is complex enough, but the British have taken this a step further.
Apparently it wasn’t enough to confuse us poor Americans with terms like swimming costume (swimsuit), boot (car trunk) and punter (gullible customer). Our friends from across the pond also have their own unique vernacular for affiliate marketing.
This is primarily seen in the use of acronyms.
The acronym CPA is used much like it is in the US, but may also include revenue share affiliates (CPS).
In the US we use OPM to shorten “Outsourced Program Manager,” but in the UK this acronym is used to describe “Online Performance Marketing .”
“Performance Marketing Network” also has a UK spin and is often used to refer to Open Affiliate networks (rather than CPA networks, PPC, etc).
As we saw in the “Jolly old England” section above, the phrase “Performance Marketing” has a unique British definition, but this confusion also persists amongst US-based affiliate marketers.
When I think of “Performance Marketing,” I think of commission-based marketing channels, but many folks consider it a much broader category.
Missy Ward of Affiliate Summit commented to me when I asked her about the definition of “Performance Marketing,” and stated…
“I used to consider affiliate marketing and performance marketing as on in the same. But as the landscape changed, so did my opinion. Now, I believe that affiliate marketing is a subset of performance marketing.
Other types of performance marketing might include individualized PPC Search [think Adwords], PPC Display [think Retargeting], Pay Per Call programs, etc.”
Missy’s definition is mirrored by many people in our space and for these folks, performance marketing isn’t tied to the payout of commissions.
So What About You?
While I’ve taken you through a short tour of the idiosyncratic linguistics of affiliate marketing (they should make a movie about that), I imagine I’ve only scratched the surface.
What I really want to know is what head scratching conversations have you had or what terms blew your mind when you heard it used in a completely different context?
Comment below to share so we can all help each other know exactly what the heck the guy in the next booth is talking about at our next affiliate conference.
Thanks for reading!
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