Commission (also Referral Fee, Finder’s Fee, Bounty):

The income an affiliate receives for generating a sale, lead or click through to a merchant’s website.

AKA, the reason there are affiliates at all.  You have to give a person something to motivate them to promote your brand as a merchant.  In performance marketing, that “something” is the commission.  [...]

Advertiser (also Merchant or Retailer):

Any website that markets and sells goods or services.  In affiliate marketing programs, advertisers contract with affiliates to get consumers to register for services, purchase products, fill out forms or visit websites.

Basically, the person paying for those leads & sales is the advertiser.  In affiliate marketing, the advertiser is responsible for [...]

Pay Per Sale (PPS):

A program where an affiliate receives a commission for each sale of a product or service that they refer to a merchant’s website.  Pay-per-sale programs usually offer the highest commissions and the lowest conversion ration.

This is the most common model of affiliate program.  The merchant puts the pressure of generating a sale [...]

Pay Per Lead (PPL):

A program where an affiliate receives a commission for each lead that they generate for a merchant website such as completed surveys, contest or sweepstakes entries.  Pay per lead generally offers midrange commissions and midrange-to-high conversion ratios.

Merchants typically use this model when they want to follow up with leads to complete the [...]

Pay Per Click (PPC):

A program where an affiliate receives a commission for each click they refer to a merchant’s website.  PPC offers some of the lowest commissions and high conversion ratio since visitors need to only click on a link to earn the affiliate a commission.

The most common search engine utilizing PPC is Google AdWords, [...]