Online advertising is growing tremendously day by day and it’s important to know about the basic terminologies in advertising for better understanding.
Impressions
A basic terms that tells you how many times a user saw your ad or online advertisement. Each time your ad has been viewed will be counted as an impression.
Click Through Rate(CTR)
How many users clicked and visited your website or landing page after seeing your ad.
Click Through Rate is calculated as below.,
CTR = Clicks / Impressions
Click Through Rate is calculated as below.,
CTR = Clicks / Impressions
Conversion
A user saw your ad, clicked, visited your site and take action like buying of any product or registers or downloads will be counted as a conversion.
CPA (Cost per Acquisition)
The cost of spending on clicks/conversion.
how much it costs in advertising to convert one person from a visitor to a customer.
how much it costs in advertising to convert one person from a visitor to a customer.
CPA will be calculated as below.,
CPA = Total Spend / Total conversions
ROI (Return on Investment)
How much return the advertiser has got back on investing in advertisement.
ROI will be calculated as below.,
ROI = Revenue/Spend
ROI will be calculated as below.,
ROI = Revenue/Spend
CPM (Cost per mille)
It means the advertiser need to pay the cost on every 1000 impressions.
Example: If CPM is $ 5, Adveriser has to pay out $50 for 10000 impressions
Example: If CPM is $ 5, Adveriser has to pay out $50 for 10000 impressions
CPE (Cost per Engagement)
Engagement is known as a user interaction with an ad in numerous ways, It can be viewing, sharing, voting, commenting, etc.
CPE will be calculated as below.,
CPE = Total Spend / Total Engagements
CPC (Cost per click)
It means the advertiser need to pay the cost for each clicks of the ad.
Example : If CPC is $ 5, Adveriser has to pay out $50 for 10 clicks.
Example : If CPC is $ 5, Adveriser has to pay out $50 for 10 clicks.
Creative
A graphical element that runs on a ad-space of the web page. It can be a image, video and other interactive elements.
Call To Action(CTA)
Call To Action is a command in banners/advertisements that prompts the users to take action.
Example: Buy Now, Sign Up, Learn More
Example: Buy Now, Sign Up, Learn More
Ad Size
The size of a creative measured in pixels.
Example : 160×600, 300×250, 300×600
Example : 160×600, 300×250, 300×600
Ad Space (or) Placement
The space on a Web page reserved to display advertising.
Cookies
Cookies are piece of code that are sent from a web server to the user’s computer to store information unique to that user. This can be used by advertisers to keep track of the number and frequency of the advertisements to the visitor.
Frequency Cap
Number of times the same advertisement is shown to the same visitor over a period of time.
Insertion Order
It’s an Mutual and Formal contract between both the buyer and seller of inventory.
Ad Tags
A Piece of HTML/Java script code produced by the ad servers that fetches the ad creatives while loading on the publisher’s web site.
Pacing
Pacing is a key factor to measure how fast the purchased impressions are getting delivered.