Affiliate Marketing is an important aspect of a business’s digital marketing strategy.

Using Google Ads to create digital ads, and Google Analytics to track campaigns’ success are needed skills in the field.

Affiliate Marketing is performance-based marketing in which a business/person rewards one or more affiliates for each visitor or customer brought by the affiliate’s marketing efforts.

Who are Affiliates?

Affiliates are individuals or companies who market a company’s products for a commission. Affiliates can be anyone or thing, for example, celebrities, YouTubers, blog sites, resource websites, etc.

Affiliate Marketing is all about traffic and conversion.

With Affiliate Marketing terms, information can become complicated. These terms are crucial for understanding your digital marketing strategy. This will help you understand how to uses these metrics and measures your progress.

Below is a reference guide to Affiliate Marketing.

CPA: Cost Per Action (or Acquisition)

An online marketing strategy where the advertiser pays when a prospective customer does a specified action. This is a very low-risk campaign based on its initial funding. These actions include filling out a newsletter form, receiving proposals, signing up for a free trial, or making an online purchase.

For example, when you click play on a video ad, that is an action or acquisition for the advertisement.

The affiliate’s job is to pick the correct traffic sources, such as social media, website, etc. and pass high-quality traffic to the advertiser for profit.

CPC: Cost Per Click (or PPC: Pay-per-click)

An online marketing strategy where the advertiser pays for each click for an ad. Pay-per-click is usually associated with top search engines such as Google Ads. “A ‘click’ on one of your PPC text ads or display banner ads represents a visit or an interaction with your company’s product or service offering. Every click in a PPC campaign represents attention from a person who is searching for something that you offer.”  Facebook and Twitter have adopted this advertising model.

Flat-rate and bid-based are two primary models for CPC.

Flat-rate is a fixed amount that will be paying per click. Bid- Based is when an advertiser competes against other advertisers for certain keywords.

With Google Ads, an advertiser bids how much to pay per click, and Google’s algorithms match publishers and advertisers.

This method is low/medium risk. Advertisers have more control with the ability to set a daily budget. When the budget is max out, the ad is removed for the remainder of the billing period.

For example, when you click a Facebook Ads about the new colorful cookware tech, the cookware company charge for that Facebook Ads click.

CPM: Cost Per Mille (or Cost Per Thousand)

An online marketing strategy where the advertiser pays a price of 1,000 advertisement impressions on one web page. CPM is the most common method for pricing web ads. Advertisers usually measure CPM campaign with click-through rate, which is the percentage of people who saw and clicked your ad. An advertisement’s success can’t be measured on CTR alone. An ad that a reader views but does not click may still have an impact. CPM campaigns are best used for brand awareness and targeted messaging. CPM focuses more on the exposure of the ads on the website than actual actions or clicks. Since CPM rates are low, a website or affiliate needs high traffic to make decent money from CPM ads.

CPL: Click Per Lead

An online marketing strategy where the advertiser pays for a sign-up form of consumer interest in the advertiser’s offer, such as newsletters or sweepstakes. CPL is all about to generate leads that can potentially lead to sales or other offers. A lead refers to an individual who is interested in the service or product of the advertiser. It is a very safe, and easy to work marketing model, but the payout is low based on the fact that not all leads turn into a buyer. The affiliate is only paid when a successfully generated contact, called a qualified lead, is obtained.

Affiliate Marketing is a very powerful tool for a business, especially in the digital space. Understanding these terms are necessary to be able to create SMART Goals and effective online marketing strategies. Here at CTIChicago, we can help you obtain the skills to a successful Social Media career.


If you want to learn more about Google Ads, Google Analytics and Affiliate Marketing, Chat with us below!
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