University of Texas, Dallas

BUSINESS 1111

Chapter 4 Affiliate Marketing

True/False Questions

1)When a fixed commission is paid to an affiliate for each new signup of a news letter, the type of reward system used is known as revenue share.

2. Web sites where a sale can be performed instantly are ideal for revenue sharing.

3. CPA affiliate program will usually have conversion targets with which the leads generated need to comply as a means of quality control.

4. Online travel agents are perfect examples of merchants who offer a revenue share commission.
5. The affiliate is only awarded commission should the desired action take place within the cookie period.

6. Affiliate tracking software collects information only if the desired action is completed.

7. Cookies are used for authenticating, tracking, and maintaining specific information about users, such as site preferences or the contents of their electronic shopping carts.

8. In affiliate marketing, affiliate decides the cookie period.

9. The affiliate is only awarded commission should the desired action take place within the cookie period.

10. In the case of the affiliate marketing, it has become standard practice that the first referral is awarded the commission.

11. If the customer completes the action but does not do so online, the affiliate will not receive commission.

12. It is generally accepted practice that even if it is a merchant’s marketing effort that is responsible for the final sale, the affiliate still gets the commission if it is within the affiliate’s cookie period.

13. Most of the tactics used by affiliates will be the same as those that the merchant employs but will reach a different part of the Internet population.

14. A personal Web site is one of the main types of affiliates.

15. The basic aim of an affiliate is to enhance the brand image of the product.

16. Affiliate marketing came to the fore as a way for loyalty sites to make money, though this now forms a small part of the marketing mix.
17. Search affiliates earn a percentage of a sale and “split” this with the customer to create cash-back or points-based shopping sites.

18. Affiliate networks usually charge the merchants nothing to join.

19. Affiliate networks support both, affiliates and merchants.

20. Affiliate networks usually charge the affiliates nothing to join.

21. Affiliates pay a monthly fee to the affiliate networks which is equal to a fixed percentage of the commission earned by them and it is known as commission override.

22. If the merchant or the affiliate network hosts the banners, these can be updated without the affiliates having to do anything.

23. A product feed basically is a way of providing information about the products on an affiliate’s Web site.

24. A product feed contains information about the stock status of the product.

25. A product feed contains user comments about the product.

26. A product feed contains a product URL.

27. The key to successful affiliate marketing is ongoing communication and marketing to your affiliates.

28. There are seldom contracts in place between affiliates and merchants.

29. Affiliate programs are easily scalable.

30. There is still little to no industry regulation in affiliate marketing.

31. In the case of affiliate marketing, there is a very high barrier to entry for both affiliates and merchants.

Multiple Choice Questions

1. CPL (cost per lead) is the most suitable affiliate program for which of the following merchants? a Online travel agents

b     Publisher of a whitepaper c Online retailers

d     Insurance companies and banking institutions e  Publisher of an online news letter

2. Which of the following statements is true about a CPC (cost per click) affiliate program? a     CPC is best suitable for banking institutions.

2. CPC is est suitale for an online retailer.
3. CPC involves paying a fixed ommission for eah lead. d              In CPC, affiliate earns a perentage of the sale.

e     CPC is primarily a way of driving large volumes of traffic, usually to a new site.

3. Which of the following affiliate programs is the most suitable for websites where a sale can be performed instantly?

a      Cost per action b        Revenue share

c      Cost per click d        Cost per lead

e     Cost per customer

4. Merchants that offer            commissions are usually those that need to convert a lead into a sale offline.

a      cost per lead b        cost per sale

c      cost per action d        cost per click

e     cost per customer

5. Amazon Associates is a popular              affiliate program. a                                                cost per action

b     cost per click

c      revenue share

d     fixed commission e

e cost per lead

6. Which of the following statements is true about a CPL (cost per lead) affiliate program?
   1. It will usully hve conversion trgets with which the leds generted need to comply s mens of qulity control.
   2. The affiliate earns a percentage of the sale.
   3. An affiliate would be awarded ommission for every lick through to the merhant’s Web site.
   4. It is bets suitable to an online retailer.
   5. This typ of commission was prvalent in th vry arly days of affiliat markting, but now it has ben largly abandond du to click fraud.

7. Affiliates prefer CPL affiliate program because                                                                           . a      they earn a percentage of the sale

b     they earn a commission for each click through to the merchant’s Web site c       they earn a fixed monthly commission irrespective of the amount of sale d         they are not in control of the offline conversion process

e     the tracking solution needed for CPL is simpler than that needed for any other program

8. Affiliates send traffic to merchants through                                                                    . a      e-mail

b     URLs (Uniform Resource Locators) c      cookie

4. intranet
5. ftp

9. What is a URL?

1. A unique reference number given to n affiliate

2. A unique numer which identifies a particular merchant
3. A unique number assigned to a ustomer when he acesses the merhant’s website for the first time
4. A unique adress that ientifies a Web site
5. A uniqu number generated for ach transaction that takes place between a customer and the mrchant’s Wb site

10. When it comes to affiliate marketing, the cookie period is     . a      decided by the merchant

2. equal to a session
3. deided by a customer d    never less than 30 days e        deide by an affiliate

11. Which of the following statements is NOT true about cookie period? a         Merchant sets the cookie period.

2. A cookie may last only for a session.
3. The affiliate is only awarded ommission should the desired ation take plae within the ookie period.
4. Cookie perio can be 999 ays.
5. Affiliats tnd to prfer a shortr cooki priod.

12. Affiliate lock-in means              .

1. the first ffiliate to refer the customer erns commission for predetermined fixed number of trnsactions between the merchnt nd the customer
2. the first affiliate to refer the customer earns commission on the lifetime of the customer
3. the first affiliate to refer the ustomer earns ommission for all the transations whih are performed in the first session between the merhant and the ustomer
4. the first affiliate to refer the customer earns commission for all the transactions which are performe on the same ay between the merchant an the customer
5. th first affiliat to rfer th customr arns commission only on th first transaction btween th mrchant and th customr

13. When a customer reaches a merchant’s Web site through multiple affiliates before making the final purchase, which affiliate would be rewarded the commission?

1. The first ffiliate through which the customer reched the merchnt’s Web site
2. The most recent affiliate through which the customer reached the merchant’s We site c&nsp;      All the affiliates through which the customer reached the merchant’s We site

4. The affiliate through whom the customer reache the merchant’s Web site the maximum number of times before making the purchase
5. Th first and th last affiliat

14. Which one of the following statements indicates a problem associated with the use of cookies in the affiliated marketing?

a      The cookie period is not known to the customer. b    The cookie period is extremely short.

3. Cookies ocupy a lot of memory on the ustomers’ omputers.
4. Consumers sometimes get anxious when they hear things like “tracking” an “collecting information,” an so they elete cookies from their computer.
5. Th cooki priod cannot b altred by an affiliat.

15. The basic aim of an affiliate is to    . a      increase the sale of the product

2. send targeted traffic (that means customers who are very likely to perform the desired action) to a particular merchant’s We site
3. enhane the brand image of the produt
4. increase the traffic reaching to his own Web site
5. nsure that th customrs can buy th product asily

16. Affiliate marketing came to the fore as a way for            to make money, though this now forms a small part of the marketing mix.

1. content nd niche sites
2. coupon and promotions sites c&nsp;               loyalty sites

d     personal Web sites e        search affiliates

17.              are Web sites created specifically around a topic, and any products promoted will carry affiliate tracking.

1. Loylty sites
2. Coupon and promotions sites c&nsp;               Content and niche sites

4. Search affiliates
5. Prsonal Wb sits

18. An affiliate has created a Web site dedicated to digital cameras, with tips and downloads to help you get the most out of your camera. It can review a number of different cameras and offers links to purchase those cameras online. All of those links are affiliate links. This is an example of which type of affiliate?

a      Content and niche sites b               Loyalty sites

c      Coupon and promotions sites d               Personal Web sites

e     Search affiliates

19. Which of the following functions is NOT performed by an affiliate network? a     Provides tracking solutions

b     Reports on programs to both affiliates and merchants c   Hosts creative banners

4. Looks after customer grievances

5. Provids commission paymnt options

20. Which of the following statements is true about an affiliate network? a Affiliate network charges a setup fee to an affiliate.

b    Affiliate network usually charge the merchants nothing to join. c   Affiliate network charges commission override to the affiliates. d Only affiliates can join an affiliate network.

e   Affiliate network provides tracking solution.

21. Affiliate networks usually charge the affiliates                                                                         . a      a setup fee to join

b     a monthly fee for support c         nothing to join

4. a fixe percentage of the commission earne monthly
5. a monthly fe which is proportional to th numbr of mrchants with whom thy ar affiliatd

22. What is commission override?

1. Affilite networks usully chrge the merchnt percentge of the sles chieved through the ffiliate network. It is known s commission override.
2. Affiliate networks usually charge the merchant a percentage of the commission earned y the affiliate. It is known as commission override.
3. Affiliate networks usually harge the affiliates a perentage of the ommission earned by them. It is known as ommission override.
4. Affiliate networks usually charge the affiliates a joining fee to cover the cost of integrating the tracking solution. It is known as commission overrie.
5. Affiliat ntworks usually charg th mrchants a monthly managment fe, dpending on th lvel of support offred to th mrchant. It is known as commission ovrride.

23. What is a product feed?

1. It is list of upcoming products on n ffiliate’s Web site.
2. It is a catalogue of products sent to the customers via e-mail.
3. It is a ollection of ustomer omments about the produts available on a merhant’s Web site.
4. It is list of available proucts on an affiliate’s Web site.
5. It basically is a way of providing information about th products on a mrchant’s Wb sit.

24. Having interactive banners, such as gift wizards or product searches, mean that potential customers can       .

1. purchse the products directly from the ffiliate’s Web site without going to the merchnt’s Web site
2. prevent the affiliate from tracking his/her purchase
3. interat with the brand before they even ome through to the merhant’s Web site
4. interact with the other users of the prouct before buying the prouct through the affiliate’s Web site
5. intract with th mrchant bfore thy ven com through to th mrchant’s Wb sit

25. All of the following information is available in the product feed EXCEPT: a        shipping price

2. product price
3. ustomer omments on the produt d        produt URL

e     stock status

26. All of the following points should be noticed before joining an affiliate network EXCEPT: a        The joining fees and monthly fees

2. The affiliate networks joined y the competitors
3. The level of support offered by the affiliate network d       Cookie periods provided by the affiliate

e     The countries supported by the network

27. Which of the following statements is true about the affiliate marketing? a  There is a high barrier to entry for affiliates

2. There is little industry regulation
3. Affiliates and merhants always enter into ontracts d      Affiliate programs are easily salable

e     There is a high barrier to entry for merchants

Fill in the Blanks

1. In               affiliate program, the affiliate earns a percentage of the sale.

2.              affiliate program is primarily used for driving large volumes of traffic, usually to a new site.

3. Merchants that offer            commissions are usually those that need to convert a lead into a sale offline.

4. A               is a parcel of text sent by a server to a Web browser and then sent back unchanged by the browser each time it accesses that server.

5. If the first affiliate to refer the customer earns commission on the lifetime of the customer, it is known as .

6.              are online marketers who are paid on a performance basis.