Affiliate marketing features more acronyms than a teenage text conversation. For those who are new to this area of marketing it can take some time to get to grips with, so we’re here to help with straightforward definitions of the most common affiliate terms.
CPA – ‘Cost per acquisition’ is the commission value paid to a publisher when a customer buys something from the advertiser via the publisher’s affiliate link. This can be represented as a percentage, e.g. ‘8%’, which means the publisher receives 8% of the value of the product purchased. It can also be a flat rate, such as £20 for a specific product.
CPC – ‘Cost per click’ is what an advertiser pays to a publisher every time a user clicks on the advertiser’s ad on the publisher’s site. (Also known as PPC – Pay Per Click)
CPL: ‘Cost per lead’ is what an advertiser pays to a publisher when a customer completes an action (such as filling in a questionnaire/ signing up to a newsletter) from the publisher’s website
CPI: ‘Cost per install’ is what an advertiser pays every time a user installs a program using the affiliate link on a publisher’s page
CPA – ‘Cost per action’ is an umbrella term that covers CPA (acquisition), CPC, CPL and CPI (install). It refers to what an advertiser pays a publisher for generating a specific action by a user.
CPV: ‘Cost per view’ is what an advertiser pays for each unique user view of their ad/video on a publisher’s website or blog. Commonly used with banner advertising.
EPC: ‘Earnings per click’ is the average revenue a publisher earns per click across all the affiliate links/ads on their website. This can be worked out by dividing the total commission they’ve generated by the total number of clicks on their affiliate links/ads.
CPI: ‘Cost per impression’ is what an advertiser pays every time their ad appears on a publisher’s website
CPM: ‘Cost per mille/thousand’ is the value paid by an advertiser for one thousand impressions of their ad on a publisher’s website. For example, if a website has a CPM of £20 and an advertiser wants 100,000 impressions, the advertiser will pay £2000. 100,000 / 1,000 (one mille) = 100. 100 x £20 (one mille) = £2,000.
eCPM – ‘Effective Cost Per Mille/thousand’ shows how much money a publisher makes for every 1,000 impressions on an advert or affiliate link. Say you are displaying an advert for a XBox 360 costing £150. If you sold one last week and that advert had 10,000 impressions during the week, your eCPM is £15.
£150/(10,000 /1,000) = £15