Affiliate Marketing Glossary: 25+ Terms Every SaaS Founder Should Know

Launching an affiliate program? You'll hear terms like CPA, EPC, cookie duration, and chargebacks thrown around constantly. If you don't know what they mean, you'll make expensive mistakes.

This glossary covers every affiliate marketing term you need to know as a SaaS founder. Bookmark it. Reference it when you're setting up your program or negotiating with affiliates.

Let's cut through the jargon.

A

Above the Fold

The part of a webpage visible without scrolling. For affiliate marketing, this matters because affiliate links and banners placed above the fold get significantly more clicks than those buried below.

Why it matters for SaaS: If your affiliates are promoting you on their blogs, encourage them to place your links above the fold. Higher visibility = more conversions.

Ad Exchange

A digital marketplace where advertisers and publishers buy and sell advertising space in real-time auctions. Think of it as a stock exchange, but for ad inventory.

Ad exchanges connect demand-side platforms (DSPs) with supply-side platforms (SSPs), enabling programmatic advertising at scale.

Advertiser

The company paying for promotions. In affiliate marketing, the advertiser is typically the product owner who pays affiliates for driving conversions.

In SaaS terms: You're the advertiser. You pay affiliates when they bring you paying customers.

Adware

Software that automatically displays or downloads advertising material. Often bundled with free software downloads without the user's full awareness.

Warning: Adware-based affiliate traffic is generally low quality and can damage your brand. Most reputable affiliate programs prohibit adware promotion.

Affiliate Agreement

The contract between an advertiser and affiliate outlining the terms of their partnership. This document specifies commission rates, payment terms, prohibited promotion methods, and termination conditions.

Best practice: Always have a clear affiliate agreement. It protects both parties and sets expectations upfront.

Affiliate Link

A unique URL containing a tracking code that identifies which affiliate referred a visitor. When someone clicks an affiliate link and makes a purchase, the affiliate gets credit for the sale.

Example: yoursite.com/?ref=affiliate12 or yoursite.com/?via=john

With Tolt, each affiliate automatically gets a unique referral link they can share. The system tracks clicks, signups, and conversions automatically.

Anchor Text

The clickable text in a hyperlink. For affiliate links, the anchor text should be relevant and compelling.

Good anchor text: "Try Tolt free for 14 days" Bad anchor text: "Click here"

SEO-savvy affiliates use descriptive anchor text to help their content rank while driving affiliate conversions.

API

Application Programming Interface. In affiliate marketing, APIs allow programmatic access to affiliate program data, enabling affiliates to pull reports, generate links, and automate workflows.

Tolt's API lets you programmatically manage affiliates, retrieve performance data, and integrate affiliate tracking with your existing tools.

B

Banner

A graphic advertisement displayed on a website. Affiliates use banners provided by advertisers to promote products visually.

Banner best practices:

• Provide multiple sizes (300x250, 728x90, 160x600)
• Keep file sizes small for fast loading
• Include clear calls-to-action
• Match your brand guidelines

C

Chargeback

When a customer disputes a charge and gets a refund through their bank or credit card company. In affiliate marketing, chargebacks can result in commission clawbacks.

How it works: If an affiliate earns a $50 commission on a sale, but the customer later files a chargeback, that $50 is typically deducted from the affiliate's balance.

SaaS consideration: Chargebacks are less common with subscription products, but they do happen. Set clear policies about how chargebacks affect affiliate commissions.

Click Fraud

The practice of artificially inflating click counts on affiliate links. This can be done by bots, scripts, or even manual clicking to generate fake traffic.

Red flags:

• Unusually high click counts with zero conversions
• Traffic from suspicious geographic locations
• Clicks coming at impossible speeds

Affiliate platforms like Tolt include fraud detection to identify and filter suspicious activity.

Click ID

A unique identifier assigned to each click on an affiliate link. Click IDs contain data about the user's session, browser, location, and timestamp.

Why it matters: Click IDs enable accurate attribution. When a conversion happens, the click ID connects it back to the specific affiliate and campaign that drove it.

Click-Through

The action of a user clicking a link and arriving at the destination page. In affiliate marketing, a click-through is the first step in the conversion funnel.

Click-through rate (CTR) = (Clicks / Impressions) × 100

A high CTR means the affiliate's audience is interested. A low CTR might mean the creative or placement needs improvement.

Commission

The payment an affiliate receives for driving a desired action (usually a sale or lead). Commissions can be structured as:

• Percentage-based: 20% of the sale price
• Fixed amount: $50 per conversion
• Recurring: 20% of MRR for the customer's lifetime
• Tiered: Higher percentages for higher volume

SaaS standard: Most SaaS affiliate programs offer 20-30% recurring commissions. With Tolt, you keep 100% of commissions (zero platform fees).

Consumer

The end user who purchases the product or service. In the affiliate marketing chain: Advertiser → Affiliate → Consumer.

Conversion Rate

The percentage of visitors who complete a desired action (signup, purchase, etc.).

Formula: (Conversions / Visitors) × 100

Example: If 1,000 people click an affiliate link and 30 become paying customers, the conversion rate is 3%.

Benchmarks for SaaS:

• Landing page to trial: 5-15%
• Trial to paid: 10-25%
• Overall affiliate conversion rate: 1-5%

Cookie

A small text file stored in a user's browser that tracks their activity. In affiliate marketing, cookies remember which affiliate referred a visitor so they get credit for conversions that happen later.

Cookie Duration

How long the tracking cookie remains active. If your cookie duration is 30 days and someone clicks an affiliate link but doesn't buy until day 25, the affiliate still gets credit.

Common cookie durations:

• 24 hours (Amazon)
• 30 days (standard)
• 60-90 days (generous)
• Lifetime (rare, but exists)

SaaS recommendation: Offer at least 30-day cookies. SaaS purchases often require multiple touchpoints before conversion.

Cost Per Action (CPA)

A pricing model where the advertiser pays only when a specific action occurs (sale, signup, lead submission, etc.).

CPA formula: Total Cost / Number of Actions

Example: If you spend $500 on an affiliate program and get 10 paying customers, your CPA is $50.

Cost Per Click (CPC)

A pricing model where the advertiser pays for each click, regardless of whether it converts. Less common in affiliate marketing (where CPA dominates) but used in paid advertising.

CPC formula: Total Cost / Number of Clicks

O

Online Advertising

Any form of marketing message delivered via the internet. This includes display ads, search ads, social media ads, native ads, video ads, and affiliate marketing.

Affiliate marketing is a subset of online advertising where payment is performance-based rather than impression-based.

P

Pay-Per-Lead (PPL)

A commission model where affiliates are paid for each qualified lead they generate, regardless of whether that lead becomes a paying customer.

Common in: B2B SaaS, financial services, insurance, education

Example: An affiliate earns $10 for every free trial signup, whether or not they convert to paid.

Pay-Per-Sale (PPS)

A commission model where affiliates are paid only when a sale is completed. This is the most common model for SaaS affiliate programs.

Advantage: You only pay for actual revenue generated. Disadvantage: Affiliates bear more risk, so they may expect higher commission rates.

Payment Threshold

The minimum amount an affiliate must earn before receiving a payout. Common thresholds range from $25 to $100.

Why thresholds exist: Processing many small payments is expensive and time-consuming. Thresholds consolidate payments into meaningful amounts.

Tolt default: $100 minimum payout, customizable per program.

Publisher

In affiliate marketing, a publisher is anyone who promotes products in exchange for commissions. Publishers include bloggers, content creators, comparison sites, coupon sites, and influencers.

The terms "publisher" and "affiliate" are often used interchangeably.

Key Takeaways

Understanding these terms is step one. Actually launching your affiliate program is step two.

The essential metrics to track:

• Conversion rate: Are affiliates sending quality traffic?
• Commission costs: What's your effective CPA?
• Cookie duration: Are you capturing delayed conversions?
• Chargeback rate: Is fraud a problem?

Ready to launch? With Tolt, you can set up your SaaS affiliate program in 15 minutes. Connect Stripe, set your commission rates, and start recruiting affiliates today.

Start your 14-day free trial →

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