Glossary of the monetization of a website

Affiliate program
Affiliate programs allow merchants to promote their products and webmaster to make money on a cost per action basis (unlike Adsense that is based on clicks).
The webmaster makes money only when visitors perform an action, as buying a book for example. Partners of the webmaster are the producer (Amazon for example) or an affiliate network.
Trick to diverting advertising to obtain artificially revenues. This is a campaign AdWords (or other advertiser) to bring visitors to pages containing only Adsense advertisements (or other). The AdWords advertisements are set for a very low cost per click while the advertisements on the site to which they lead have higher incomes.
Adsense accounts using arbitration are disabled by Google since June 2007.
With the help of a malicious script, generating unintended clicks from the user to unveil information or make choices that will benefit the agent.
This is different from  fraudulent click that is a deliberate action of the user.
Contextual advertisement
An ad is contextual when it is choosen by the service, the Adsense robot in this case, to match the content of the page. Practically the robot searches for keywords in the page and select ads targetted to these keywords.
Actually the targetted keywords are not taken in the text of the ad, they are choosen by the Adword customer that is the source of the ad.
Clickthrough Rate. This is the ratio of clicks related to the number of impressions (displays).
Technically, it is number of clicks an ad makes divided by the number of displays of either
- the ad or
- the ad unit or
- the page,
depending the type of impressions.
Effective CPM, cost per thousand. The formula is the incomes for a channel, divided by the number of thousand impressions.
- Gained: $5
- Impressions: 3500
- eCPM = 5 / 3.5
The result is $1.42
Fraudulent click
This is a category of invalid click. It may be a click of a publisher (the webmaster of the site that displays ads) on its own ads. This can be done manually or by a script. This also includes incentive to click on ads, clicks from relatives or generally anything that is done to increase revenues without any benefit for advertisers.
Google Slap
See Low landing page quality score.
Incentives to click
This is the set of action the user could make to let visitors to click on the ads. This is forbidden and lead the account to be disabled. The simplest incentive is a message saying directly to help the webmaster thank to the ads. But less evident actions are prohibited too. An image near an ad for example is too. Any things that could make bad clicks, i.e. clicks that do not lead true visitors to the targetted site are incentives.
Invalid click
According to the Adsense blog: "Invalid clicks correspond to a category of clicks that we have chosen not to charge our AdWords advertisers because they artificially increase costs for an advertiser or a publisher's earnings."
Not to be confused with fraudulent clicks. In effect they can have various reasons and they always increase costs without benefit to the advertiser. They are not counted.
Landing page quality score (Adwords)
Quality score of a page. When the ads leads to pages with poor content, the publisher is rated a low landing page quality score. His Adwords account could be disabled. This is evaluated by robots.
Made For Adsense is a page or a site created solely for displaying advertisements. These pages have little or no content, containing only ads, it has a high click rate. The Adsense rules prohibit the ads on pages with no content. It can also refer to the MFA automatically generated pages such as search results.
It is the website that displays the ads. (The advertiser makes them). Google is the ad server.
Referrals are non-contextual ads. Actually there are ads choosen by the user, unlike contextual ads that are choosen by the service, and clicks do not make money. The amount is fixed and is given only when the visitor performs some action: downloading a software, registering a service...
Return on Investment. For a client of Adwords, the ROI is the score of the value to his business gained in return for the cost of the ad campaign. Technically it is the ratio of the cost of the campaign relative to money made with conversions of clicks. In return, the ROI is used to modify incomes from Adsense clicks for a given account depending the quality of the clicks.
The formula is: (Revenue of conversion - Cost of campaign) / Cost of campaign.
More definitions
Adsense Adsense tutorial - Ajax and Adsense - Thing to avoid - Adsense behaviors - Advertising FAQ