Essential Digital Marketing Terms & Definitions

Here are some common terms you may hear or see:

Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a is achieving key business objectives, short and long-term goals. Organizations use KPIs to evaluate their success at reaching targets and potential customer.

Click-Through Rate (CTR) is the ratio of users who click on a specific link to the number of total users who view a web page, email campaign, or advertisement. It is commonly used to measure the success of an online campaign

Formula: clicks ÷ impressions = CTR.

For example, if you had 10 clicks and 100 impressions, then your CTR would be 10%.

Cost-Per-Click (CPC) or Pay-Per-Click (PPC) is an online advertising model used to direct traffic to websites, in which an advertiser pays a publisher (typically a website owner or a network of websites) when the ad is clicked. It is a method publishers use to bill based on the number of times a visitor clicks on an advertisement. 

Cost-Per-Thousand (CPM), is the number of impressions, or viewers, in thousands, regardless of whether each viewer clicks on the advertisement or not. 

Cost-Per-Impressions (CPI) refers to the rate that an advertiser has agreed to pay per 1,000 views of a particular advertisement. A website that serves ads based on CPI doesn’t need the user to click on the ad – each appearance of the ad in front of a user counts as one impression. The advertiser agrees to pay the website a certain price for every 1,000 impressions the ad receives. 

Cost Per Acquisition (CPA) is an online advertising payment model in which payment is based solely on qualifying actions such as sales or registrations. This does not include deals based solely on clicks, which are referred to specifically as Cost-Per-Click (CPC) or Pay-Per-Click (PPC).

A/B Testing (also known as Split Testing or Bucket Testing) is the process of testing multiple variations of webpage, email subject line, landing page, CTA, and/or ads with the goal of determining which page generates more conversions.This means you will have 2-3 versions that are all running at the same time to see which performs best.

Call To Action (CTA) is a marketing term for the next step a marketer wants the audience or reader to take. It is a prompt on a website that tells the user to take some specified action and helps remove friction in moving the user down the sales funnel. It's the sentence, or button, that closes the deal! It is typically written as a command, such as ‘Sign Up’, ‘Buy Now’, ‘Join Free’, ‘Start Now’, etc and generally takes the form of a button or hyperlink. It is a key element on a webpage, acting as a signpost that lets the user know what to do next. Without a clear CTA, the user may not know the next steps to take to purchase a product or sign up for a newsletter and is likely to leave the site without accomplishing their task. There can also be multiple CTAs on a page if there are multiple desired actions for the user to take.

Conversion Path is the course of actions a prospect will go through to eventually become a lead. These events can include a Call To Action, lead form, thank you page, downloadable content, etc.

Cost-Per-Lead (CPL) is the total cost marketing pays to acquire a lead. It is an important metric to keep track of and it influences your Customer 

Acquisition Cost (CAC).

Customer Acquisition Cost (CAC) is the measurement that allows you to assess the cost of scaling up your business. It can be calculated by dividing the time and money spent on customer acquisition for a specific period of time by the number of new customers gained. 

Formula: (Money + Time Spent)/Number of New Customers

Lifetime Customer Value (LTV) is a prediction of the net profit attributed to the entire future relationship with a customer.

Return On Investment (ROI) is a way to measure the profitability of the investment you make in marketing, sales, etc. If the ROI on an investment is negative, it generally means you’re losing money on that endeavor.

Conversion Rate is the percentage of people who take a desired action, such as filling out a form, registering, signing up for a newsletter, or any activity other than just browsing a web page.

Lead Generation/Lead Magnet/Lead Nurturing is how your business generates leads or how you grab the attention of your customers. A lead magnet is a small giveaway, free ebook, guide, etc. that your business offers to customers in exchange for their email. A lead magnet is a tool that is going to help your business capture those potential customers. Once a potential lead becomes a lead, you will need to nurture them until they become a customer. Typically business nurture their leads through their sales funnel. Lead nurturing can be in the form or sending emails, retargeting them on social media or actually calling your potential customers to follow up with them.

Remarketing / Retargeting is an online marketing tactic that allows marketers to reach out via other channels to visitors who have previously visited their website.

Email Open Rate is the percentage of the total number of subscribers who opened an email campaign. These rates can vary depending on the subject line and the relevancy of the subject matter for subscribers, but a healthy open rate is typically in the 20-40% range.

Other:

Earnings Per Click (EPC) gives the average earnings generated as a result of every click you get on your website, product page or affiliate offer. It gives the average revenue for each click that you are driving to an offer.

Return On Ad Spend (ROAS) is the total revenue generated for a specific marketing channel (like PPC) divided by the total spend on that channel.

Email Marketing Opt-in Rate refers to the percentage of site visitors who subscribe to your email list. As an example, if you had 100 visitors visit your website or landing page and 20 people subscribed to your email list, then you would have an opt-in rate of 20%.

Sales Page is a standalone page created to secure product sales which means getting visitors to convert into customers. 

Webinar Registration Rate %

About 29% of your attendees won’t register for your presentation until the day of the event itself. However, webinar statistics also show that 17% of your attendees will probably sign up more than 15 days before the big day. That’s nearly half of the people who will attend.

Webinar Live Call To Action %

A Call To Action tells your attendees exactly what you want them to do next. For example, beta test your product, download your white paper, buy your software, register for your next event, or hire you to consult them.

In order to structure the right CTA, you need to understand the next logical step along the sales funnel for your attendees.

Your sales funnel is the visual representation of the customer life-cycle:

Awareness >> Interest >> Desire >> Conversion >> and Loyalty.

Data shows that during live webinars, a shocking 82% of users participate in Q&A, 35% engage on social, 24% answer polls, and 22% collaborate, group chat, and respond to surveys

Email Click Rate %

Click-through rate (CTR) is the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement. It is commonly used to measure the success of an online advertising campaign for a particular website as well as the effectiveness of email campaigns. As an example, the average click-through rate on AdWords paid search ads is about 2%. Accordingly, anything over 2% can be considered an above average CTR. Across all industries, the average CTR for a search ad is 1.91%, and 0.35% for a display ad.

Order Checkout Rate %

Shopping cart abandonment: When customers put items in a cart but leave the site before buying, the cart is said to be ‘abandoned’.

Shopping cart abandonment rate: The percentage of people who abandon a shopping cart. If 100 people put items in their carts, but only 30 buy, you have a shopping cart abandonment rate of 70%.

Checkout process: The process for buying a product after a customer puts an item into the shopping cart. This includes filling in shipping information, payment information, coupon codes (if any), confirming the order and making the payment.