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 – A 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.
