The marketing world can be a minefield, with its very own language and terminology dedicated to sales and advertising. So, let’s make it as easy as possible for you by breaking down the lingo…

The Abbreviations

• • • ROAS – Also known as return on ad spend, this metric measures gross revenue generated for every dollar spent on advertising. It is an advertiser-centric metric that gauges the effectiveness of online advertising campaigns. The formula is: Revenue From Ad Campaign ÷ Cost Of Ad Campaign
    • CTR – Click-through rate. This is all-important! If your audience is intrigued by your ad, they’ll click on it. If this number is below the industry average, look at creating improved content.
    • CPC – Cost per click, is quite literally that, the price advertisers pay each time a user clicks on their ad.
    • CPA – Cost per acquisition. This is the cost advertisers pay when a user makes a conversion. They may measure this as the cost to get a signed up user, user into a free trial, subscription or purchase of a product.
    • CPM – Cost per mille (thousand). The cost per 1,000 ad impressions and used as a tool by advertisers when comparing ad networks or evaluating the success of an ad-based monetization strategy. Watch out as an expensive CPM will reflect through all other top-of-funnel metrics. The formula is: (Total Spend ÷ Impressions) x 1000.

Breaking down the terms

• • • Spend – This is the total amount of money invested into campaigns.
    • Monthly Budget – This is the predefined budget you set for your campaigns. You may want to increase or decrease your monthly budget based on performance.
    • Impressions – This occurs when an ad is viewed by a site visitor or displayed on a webpage. The number of impressions of an ad is determined by the number of times the page is located and loaded.
    • Conversions – When the user completes an advertiser’s goal. Conversions can range from purchases to form completions and everything in between.
    • Conversion types – You may have heard of click-through or view-through conversions. A conversion type is defined by interactions that users have made with the ad that have led them to a conversion.
    • Time to conversion – Time elapsed between first touch and conversion.

Understanding your campaigns

With these basic definitions under your belt, you’ll now be able to view your ads like a pro and understand just what’s happening in your campaigns. Want to really see your ads perform? Head to SourceKnowledge to learn more!