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Background: The Most Important Digital Marketing Terminology

May 17, 2012
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There are a few basic abbreviations that everyone involved in digital marketing should know. Even if you do not run a digital marketing campaign yourself, it is still important to understand this terminology so that you can communicate with those who are running the campaigns.

Impression РA single instance of an ad appearing to a user

Click – When a user clicks on the ad

Conversion – A single instance of the completion of whatever action the advertiser wants the user to take; examples include purchases, sign-ups or leads

CPC – Cost per click – the amount the advertiser pays per click on the ad; is equivalent to cost/clicks

CTR – Click Through Rate – the percentage of users who see an ad that click on it; is equivalent to clicks/impressions

CVR – Conversion Rate – generally defined as the percentage of users who click on the ad who then complete a conversion; is equivalent to conversions/clicks; May also be defined as the percentage of users who see the ad who then complete a conversion, which would be equivalent to conversions/impressions

CPA – Cost Per Acquisition – the cost to acquire a customer; is equivalent to cost/acquisitions

Cost Per Conversion – the cost per conversion; is equivalent to cost/conversions

CPM – Cost Per Thousand Impressions – the cost per thousand impressions of an ad; a common metric and pricing system for non-CPC digital advertising, such as display advertising

ROI – Return on Investment – How much received per dollar spent; is equivalent to revenue/cost

Position – The position on the page the ad shows up in; A position of 1 indicates an ad is in the top position on the page. A position of 10 or lower will not show up on the first page. A position of 4 or lower will not show up above the organic results.

 

One Comment

  1. Digital4Startups May 18, 2012 2:37 pm

    This post is so important that we’ve decided to keep it as our featured post over the weekend to make sure all readers have time to see it. Make sure you understand these concepts, as they are the building blocks to all of digital marketing! And remember to ask questions any questions you may have.

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