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Affiliate Marketing Fundamentals

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Affiliate Marketing

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A performance-based marketing strategy where a business rewards affiliates for each customer brought by the affiliate's own marketing efforts.

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Affiliate

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A person or company that promotes products or services for a business in exchange for commission on resulting sales.

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Affiliate Network

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A platform that connects merchants with affiliates, providing tracking technology and often handling payment and reporting.

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Commission

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The earned amount paid to an affiliate based on a predefined rate or percentage for sales or leads generated.

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Conversion Rate

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The percentage of visitors who take a desired action, crucial for determining the success of affiliate marketing efforts.

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Cost Per Action (CPA)

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A pricing model where the advertiser pays for a specific action, such as a sale or a form submission, often used in affiliate marketing.

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Cookies

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Small data files used to track the referral source of a sale or lead, playing a key role in affiliate attribution.

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Affiliate Link

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A unique URL provided to affiliates, used to track the traffic sent to the merchant's website and attribute sales.

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Earnings Per Click (EPC)

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A metric that calculates the average earnings generated by an affiliate for every click to the merchant's site.

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Cookie Duration

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The time frame in which a cookie will track a user's actions and attribute sales to the affiliate, typically ranging from 24 hours to 90 days.

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Two-tier Affiliate Marketing

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A structure where affiliates earn commissions on their sales as well as sales generated by other affiliates they have recruited.

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Landing Page

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A standalone web page created specifically for marketing or advertising campaigns, where visitors 'land' after they click through from an affiliate link.

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Return on Investment (ROI)

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A measure of the profitability of an affiliate marketing campaign, calculated by dividing the net profit by the total cost of investment.

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Pay Per Click (PPC)

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An online advertising model in which advertisers pay a fee each time one of their ads is clicked, indirectly related to affiliate marketing.

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