Jargon Buster – Part One

I was recently out with a friend who asked about what my work involves.

I was recently out with a friend who asked about what my work involves. I tried not to get carried away with my answer, but you know how it is, you start talking about your day, delve into the details of what you do and find the person you’re chatting to completely lost in translation.

I realized that it’s very easy to get immersed in the online video advertising/marketing industry and forget that people aren’t accustomed to the terminology used. Just as the scientific terms for some things seem unnecessarily complicated, marketing lingo could also be made more transparent.

I thought I would take this opportunity to explain some of the jargon used in advertising to make it easier for those unfamiliar with the nuances of its syntax, to participate in meetings and decipher reports etc.

Example of a marketing mumbo jumbo sentence:

So if we run this £50K CPV/CPA hybrid distribution campaign using our current 7% CTR, your current 5.4% conversion rate and AOV of £50 we could look to generate 500k views and accumulate ROI of around £94.5K.

Layman’s terms:

So if we run this campaign with an investment of £50K we can expect a return of £94,500. CPV (cost per view)/CPA (cost per acquisition) means you will pay the publisher every time someone views your advertisement and every time someone carries on to become a customer. Based on your current website performance and given an average order value of £50 for purchases made through your site, this return on investment is realistic.

The breakdown

The following is the first of a two part, term by term introduction to help you understand some of the key words and abbreviations that make up the mumbo jumbo – here are eight to get you warmed up:

Impression: This seems straightforward enough but it’s worth explaining as many metrics are calculated based on impressions. An impression occurs every time an ad is loaded on a page. No click is required to register an impression.

CPA: Cost per acquisition/action – is the price the advertiser pays the publisher every time a consumer buys a product after clicking through the advertisement on the publisher’s site. This could either be a percentage or a flat rate. Everyone wants leads but how much each lead costs the company or individual is measured using the CPA.

CPC: Cost per click – is what an advertiser pays to a publisher every time a user clicks on the advertiser’s ad on the publisher’s site (also known as PPC – Pay Per Click).

CPI: Cost per install – is what an advertiser pays every time a user installs their program after clicking the ad link on a publisher’s page.

CPL: Cost per lead – is what an advertiser pays to a publisher when a customer completes an action/becomes a lead (such as filling in a questionnaire/ signing up to a newsletter) from the publisher’s website (similar to cost per action).

CPV: Cost per view – is the price the advertiser pays the publisher every time a consumer views their content. A view doesn’t guarantee a conversion but with this model the advertiser is paying for brand exposure.

CTA: Call to action – is a link or phrase which promotes a desired action within an advertiser’s content often in the form of a button. The CTA tells the viewer what to do next and helps them navigate toward a conversion. If you’ve ever clicked on part of a website to download content, sign up to a newsletter or enter your details – you’ve been ‘called to action’.

CTR: Click through rate – is the number of impressions a link or advertisement has divided by the number of times it registers a click.  An advertisement may appear thousands of times, but that doesn’t necessarily help unless the user engages. This starts with a click.

Tip of the iceberg

There are of course many other terms and acronyms used to describe online advertising metrics and methods, some of which will be divulged in further detail in the coming weeks. I hope this first introduction is helpful and will allow you to start deciphering reports that perhaps once looked more like hieroglyphics.

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Posted by simonholliday