2-1- Definitions and terminology


Definitions and terminology

– Throughout this course I’ll be using terminologies specific to online marketing. Let’s review these terms and definitions together. We’ll start with one of the most important pieces of online marketing, your Call to Action. This is an instruction provided to your audience as a way to provoke a response. Calls to action typically use a verb, such as“Save Now” or “Buy Today”. You’ll find them in banner ads, on website landing pages and in social media posts, to name a few. As you drive traffic to your site, you’ll encounterwhat is called the Bounce Rate.

This is when a visitor arrives to your website but leaves after visiting only one page.They’re said to have bounced and your bounce rate is the percentage of those visitors. A bounce rate can apply to an entire website or a single page. Now the traffic that bounced had to come from somewhere, whether it was an advertisement or an email, you’ll want to be measuring your Click-Through Rate. As marketers, we’ll often measure performance by how many clicks an ad receives. Every time an advertisement is shown, it counts as an impression and the click-through rate is how many clicks were received in relation to the amount of impressions.

Alright, let’s shift gears now and look at the term Abandonment. This is when a user does not complete the goal you intended for them. A user is following a particular path, say to check out, from an eCommerce store or to complete an online form for more information and then they leave in that process. In marketing, we aim to reduce that and that’s what we call abandonment. As you begin to scale up your marketing efforts, you’ll encounter paid advertising and the term Ad Impression. Each time your advertisement is displayed to a user, it counts as an impression.

Impressions are often tied to Frequency and frequency is the amount of time a single user will see your advertisement. If you had 10 impressions of an ad, with a frequency of two, then five people would have seen that advertisement. When a user completes your goal, whether its buying a product or downloading an application, they’re said to have converted and your Conversion Rate is the percentage of visitors who entered into this experience and actually completed the goal. To understand how a user converted or when, we need to use what is called a Tracking Pixel.

These are tiny one by one pixel images that are installed on your website to track conversions, website visits and ad views. Now, advertising only make sense if it brings you a positive return on investment. To discover that, we’ll look at our Cost per Acquisition. You may also hear this referred to as CPA or in some cases Costs per Action.This is how much it costs you per goal completion. So if you ran an advertisement with a goal of getting an application download and that ad costs you $100 and if one person downloaded the app, despite the hundreds that clicked on it, the cost per acquisition for that single user would be $100.

That CPA will then be compared to your Lifetime Value or LTV. Every customer has a value. Some will buy once and never return, others will become repeat buyers. Your lifetime value is a prediction of the net profit attributed to the lifetime of that customer’srelationship with you. Typically, with paid advertisements, you want your cost per acquisition to be lower than your lifetime value. Now later, we’re going to talk about more about Banner Advertisements and Display Ads.

Here I’ll be referring to visual images, either static or animated that are used to generatebrand awareness or entice a user to click. Most banner or display advertisements will contain a call to action. Now, when you run these advertisements or share an offer, it’s important that the user arrives on a page this is specific to your promotion. If you don’t use one, it’s unlikely that they’ll convert and this page that they first arrive on, is called the Landing Page. Finally, let’s look at an Organic Result.

When you conduct a search, on say Google, you have two types of results. Paid results, which are typically the first couple of links and then organic results, which are not paidand instead achieve their rank through search engine optimization. As we progress through this course, I’ll do my best to clarify these concepts as we encounter them, but feel free to return to this movie to brush up on these definitions anytime.

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