Essential And Must Know Digital Marketing Terms — From Click-Through Rate (CTR) To Return On Ad Spend (ROAS)

Advertising Reads Mar 25, 2020

A marketer, who assumed the role as professional or someone had to do out of necessity, must-read a ton of materials about the world of marketing, whether they are just starting or catching up on the industry's new trend.

And, most of those materials written with the broader assumption that readers are versed in marketing concepts. So, to make sense of those materials, one should have a firm grasp of the fundamentals of marketing principles, and the key terms generally used to describe them.

You may have usually seen this type of material elsewhere, either overcooked by covering the whole glossary of stuff or the ones glossed over with the list of superficial ones like CPM, CTR, ROSA, etc., to be anywhere useful.

Here, I have taken a different approach to make this read a useful and bookmarkable worthy list. My objective is to cover not just the fancy acronyms but all those critical terms, which paints the picture of the whole cycle of digital marketing.

Essential And Must Know Digital Marketing Terms — From Click-Through Rate (CTR) To Return On Ad Spend (ROAS) - renttheant.com

DSP


Demand site platforms, where you can buy ad spaces for different types of creatives, displays, and text ads.

SSP


Supply-side platforms, One of the revenue models available to publishers, to monetize their digital assets like sites, blogs, and apps, etc.

Impressions

An impression is an act of successfully displaying your promotion information in display or text ad format across the web. Each event of your ad appearing before the users will be counted and totaled during the campaign.

CPM

Acronym for one of the frequently used units of measure in digital advertising. elaborated form for "Cost-Per-Thousand Impression." You may think about why it's not considered CPT instead of CPM.

Don't know. Say it out loud "CPM" and "CPT" separately, and now consider which one is appealing to you. I think the name chosen for ease of pronunciation, and "M" stands for roman numeral thousands (Miller).

To my knowledge, only CPM has dipped into roman lexical among all the digital marketing and advertising terms.

CTR

It represents "Click-Through Rate." This term used to measure and quantify how much of your call to action - "CTA" prompted in your digital campaign is acknowledged and advanced the user to the next level in the conversion path.

Higher the CTR number reflects the better the effectiveness of your digital campaign and potential business outcome.

Conversion Rates

Another essential measurement unit frequently employed in assessing the performance of any digital campaign. The conversion rate is subjective and sandboxed inside the context and campaign objective.

Imagine an objective is one of - drive users to any target channel,  lead generation, sales, sign-ups, commit to the beta trial, subscription, etc. Then this measurement gives an understanding of the success rate in achieving this specific objective relative to how much audience campaign reached successfully.

  • The total audience reached - 1000
  • Sign-up for newsletter - 100
  • Then conversion rate is - 10%

PPC

The full form of this abbreviation is "Paid-Per-Click" and one of the pricing mechanisms available in digital advertising. With this model, advertisers and publishers, responsible for rendering information on the platform, come to a predetermined price to pay for each click.

This method of spending is ideal when the campaign objective focused on a specific outcome, like drive traffic to website, sign-up, subscription.

The payment model perfectly aligned with user actions on ad exposure, this type of campaign setup work well for closed-loop marketing, where you can retrace the journey of the audience from exposure to final targeted step in the conversion.

Additionally, it also let the advertiser off the hook from mere exposure of advertising to potential users.

Attribution

Attribution is the process term used in assessment and understanding of digital campaign performance.

In real-time or post-analysis, attribution is the marker to classify advertisement driven desire user actions among the rest of the organic activities, and accurate attribution help analyzes and understands the business impact because of campaign exposure.

Personalization

As the name implies, digital initiatives personalized from the target segment, sub-segment level to individual-level desirability throughout the marketing funnel.

Personalization remains the core of digital advertisement. In today's privacy concerned world, finding the balance between personalization and respecting user's privacy is the key differentiator.

Search Engine Optimization

SEO is the process of dealing with an invisible hand behind the search engine system and their robot crawlers.  Since the predefined and context configured, algorithms are measuring and ranking content in your digital assets, from brand identity to blogs, etc.

Each one of the pages needs to indexed by the search engine, and to rank highest among your competitors and relevant content, page design and content has to satisfy more principles and guidelines, from HTML schema to content quality in terms of keywords and context relevance.

Search engines like Google Search frequently updating their algorithms and criteria used in scoring page relevancy. One has to keep up with the latest changes and respond to those new expectations.

Keyword promotion

The reason why I have put this one after SEO is for the relevancy; SEO is the fuel that powering this type of advertising on the web. Marketers can buy the keywords that matching their target audience intent and behavior in the search engine like google and bing.

And when such users are there to looking for content matching your keywords, your promotional information will be displayed on the top, bottom, or side of the search result page.

A/B Testing

A/B test is the process name for validating variance of single digital assets from landing page, call-to-action, banner ads to the entire application.

You can use this to identify the effectiveness of creative assets among multiple options created for the digital campaign.

Retention Rate

You have your business up and running, doing everything you can to put your brand and company values in front of the customer and into their head. While doing all these, you have plunged value resources from green capital to precious time and effort.

Then, you must know the way to measure how your existing and future customers and audience perceive your brand and your company in general. Retention rate is one of the many ideal markers, which reveals that insight via the change in relative headcount of the customer's from period to period.

Retention rate is not only a quantitative measurement that reflects the company standing among the customer base. But also help you predict the qualitative outcomes like projected revenue, profits, and cash flow, etc.

Here is how to calculate that retention rate, for a given period  — Identify the customer's lost by using the formula of end of the customer's count (E) minus the number of new customers (N) added, and then divide that number by the starting count (S) of that given period.

Formula = ((E-N)/S) * 100

Churn Rate

As the retention rate, the Churn rate is also a useful quantitative indicator and helpful to understand the current effectiveness of the customer-facing department in your organization.

For some business use cases, understanding churn rate is effective than retention rate, especially when you are troubleshooting problems with any particular aspect of customer experience departments.

Here is how to calculate that churn rate, for a given period  — for a given period  — Identify the number of customers lost by the start of the customer's count (S) minus end of the customer's count (E), then divide that by start of the customer's count (S).

Churn rate coming in negative means your business is adding new customers and retaining the existing one and growing. So don't freak out.

Formula  = ((S-E)/S) * 100

Customer Growth

You know that your business is growing because of the efforts invested in the changes inside your organization.

Then, by knowing that the increasing customer growth rate will help you compare and contrast what initiatives worked and whatnot. Should provide you an ideal marker for future reference.

Here is how to calculate that customer growth rate, for a given period  — Identifying total "Net New Customers" added (E -S), and then divide that by the start of the customer's count.

Formula = ((E - S)/S) * 100

Creatives

Digital assets through which marketers communicate and engage with the target audience during an ad campaign. And guide them towards desired actions.

These creatives can be anything from banner ads, videos, posters, social media posts, etc.

Design Principals

To effectively influence the audience, digital creatives have to adhere to specific design principals, from the level  of text used to the proportion of digital assets and placement and style profile of "Call-To-Action."

Intent Signals

Intent signals are interpreting and classifying the user's response to your digital advertisement. This one involves the subjective analysis of incoming data and makes the necessary adjustment to optimize the performance.

ROAS

The main one, the make or break term that everyone wants to be on the positive side of it. "Return On Ad Spend - ROAS"

P.S

This article is the live document, will be adding and updating them, as I am drifting through in the world of digital advertisement.

So, request you to bookmark and visit this page from time to time.

Inner Voice

I am "Rent The Ant" Inner Voice. The collective voice of our team both in-house and partners.