"The CTR of our ad is decreasing. It is worth trying a new creative and using retargeting more actively." - after this phrase, did you imagine an excerpt from a medical series when doctors discuss how to save a patient whose pulse is falling and needs resuscitation?
But there is no need to panic because we have written an article collecting the main terms that will give you a better understanding of targeting and marketing in general.
And yes, let's start.
- A lead is a potential customer who expresses interest in your product/service and provides contact information (name, email address, phone number, etc.).
- A pixel is a piece of code that you place on your site. With its help, you can measure the effectiveness of advertising and study people's actions on the site.
- An offer is a commercial proposal in which the benefit for the client is clearly expressed.
- Conversion is the target action that the user must perform on the site. This can be a purchase, filling out a contact form, going to the contact page, subscribing, calling, etc.
- LAL (look-a-like) is a feature of the advertising platform that allows you to create target audiences that look like existing customers or followers. Users of such an audience have common features with your customers and are, therefore, more likely to be interested in your company.
- Retargeting - showing ads to people already familiar with your brand (for example, website visitors, those who watched videos on your Facebook page, interact with your Instagram profile, etc.).
- Placement - a place to place your advertisement (in Instagram/Facebook feed/stories, etc.)
- KPI (Key Performance Indicators) - key performance indicators for achieving planned goals.
CPL ad spend/number of leads received.
- Reach - the number of unique users who saw your ad.
- Impressions - how often the user saw your ad (some could see it several times).
- Frequency - the average number of ad views. Keeping track of frequency will make your ad campaigns less annoying and more effective.
- CPL (Cost per Lead) is a metric that estimates the cost of attracting a single lead. In other words, this indicates the value of each potential client who, for example, left contact actions on the advertiser's website.
- CPC (Cost Per Click) - price per click on a link. This metric is calculated as the ratio of expenses to the number of clicks on the link.
CPM (Cost Per Mille) - cost per 1000 impressions of your ad.
- CTR (Cost Through Rate) - shows the ratio of the number of those who clicked on the ad and those who saw the ad but did not react
CTR = total number of clicks on the advertisement / total number of impressions of the advertisement * 100%.
- CPA (Cost Per Action) is an indicator that helps the company calculate how much it costs to attract one user who performed a targeted action on the site. Actions can differ: calling the company, sending an application form, subscribing to an email newsletter, switching to a business's social network, and more.
CPA = cost of advertising/number of targeted actions taken by users.
- СR (Conversion Rate) is the % of users who performed the target action (registered, subscribed to the newsletter, filled out a form, made a purchase) to the total number of site visitors.
CR = Number of visitors who took the target action / Total number of visitors * 100%.
- ROAS (Return On Advertising Spend) indicates the effectiveness or profitability of advertising campaigns. It determines how much money the company receives from the advertising budget.
ROAS = (Profit / Expenses) * 100%.
- ROI (Return On Investment) - the rate of return on investment, which helps calculate the project's return on investment. It makes it possible to determine the effectiveness of the funds spent.
ROI = (Project Income - Project Costs) / Project Costs * 100%.
The difference between ROAS and ROI is that ROAS considers only the revenues received from advertising, while ROI considers all the company revenues.
- LTV (Lifetime value) - the total profit the company receives from one client for the entire time of cooperation with him.
For example, client X bought a toy for a child for his birthday, the profit from which was $50; bought a swing in the summer with a margin of $125, and a year later - a hammock with a profit of $15 for you. You spent $33 to attract this customer with advertising. Thus, his total LTV was 50 + 125 + 15 – 33 = $157.
LTV = average check * average time spent with one buyer.
- VTR (View Through Rate) is an indicator used in video advertising and allows you to assess the degree of interest in it. This metric measures the percentage of users who watched an ad video to the end or for a certain percentage of its duration. The higher the VTR, the more likely the ad will lead to the desired action from the user, such as going to the site or buying the product.
VTR = (number of views until the end of the video / total views) * 100%.
- ER (Engagement Rate) - an indicator of engagement or active audience of your page. ER in social networks is measured as a percentage and shows how many of an account's followers respond to posts.
ER = Interactions / Reach * 100%.
Keep this dictionary close because you can look into it anytime and use it in your work.
Understanding and using the words and expressions from this dictionary is essential to success in advertising and marketing.
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