Glossary of a new Paradigm

By Aaron Pratt.

New terminology is making our online advertising metrics world a whole new kind of economy. This vibrant economy surely will result in progress on a global scale; exactly what the industrial revolution promised for the peasant economy nations of the 19th and 20th centuries:

click-through rate (CTR)

The expressed average in “percentage per hundred�? for ad impressions that once clicked arrive at the destination site. The CTR does not measure people who failed to click yet arrived at the destination site later on as a result of seeing the ad. For this reason, many researchers tend to see this as a measure of the immediate response to an ad, rather than the overall response. In cases where no visual information is available from the ad itself however, CTR is then equal to the overall rate.

conversion rate

A percentage representation of how many visitors take a desired action that goes beyond simple browsing of the pages. Desired actions may include software downloads, newsletter subscriptions, membership registration, product sales or pretty much anything that goes beyond simple browsing. The largest influences on higher conversion rates are consumer interest, product attractiveness and ease of the process.

cost-per-action (CPA)

A payment model for online advertising; based entirely on actions that are considered qualifying. Any action that results in fulfilling conversion rates can be considered a CPA; the most common are sales and registration.

cost-per-click (CPC)

An online advertisement cost for every click made on a given backlink ad. As opposed to pay per click, this is the cost the advertiser has for every time her or his advertisement is clicked on for redirecting to their destination site. Neither arrival at the site, nor anything being bought on that site is calculated in this cost.

CPM (cost per thousand)

The base price for every 1,000 impressions of an ad banner that is seen or downloaded by a visitor. M is the Roman numeral for 1,000 and CPM is the base cost for every 1,000 of those impressions. For example, if the CPM is 10$ dollars and the request is for 500,000 impressions, the final ad will price at 10×500=5,000US$

customer acquisition cost

The final cost of acquiring new customers with current marketing strategies used by a site. This number is obtained by dividing the total amount of money spent on acquiring new customers by the actual number of new customers obtained. Rebates and discounts are usually not included however this can be debatable.

hit

Every time a file request is made to a Web server. This is a term that has been misleading in the past, instead of meaning “file requested from Web Server�?, it was thought of as unique visitors, page browsing or visits to a site. Graphics can also be requested, therefore, a hit is merely the activity of requesting a file from the Web server, and every request is a hit.

hybrid model

Any combination of online models for marketing payment. When two or more different models of online marketing models are used for payment; the structure is known as hybrid as it mixes for example CPC and CPA or any other combination.

impression

A single instance of online advertisement displayed. The single act of displaying once, that is one impression on the navigator. Multiple displays are multiple impressions and so forth. One pop up, or one banner on the front page are each individual impressions.

page view

Every request made to load a single HTML page. Also known as a page impression, these may or may not be of help to given marketing structures unless they evolve a sale. If they do not evolve a sale, then they can even be considered an expense.

pay per click (PPC)

A more popular term for the receiving model of CPC. Any internet structure that uses a CPC agreement between the impression ad and the destination site is using the popular PPC model as well; the difference is usually that emphasis on how to revert traffic to the impression more easily is given priority rather than the destination site itself.

pay per lead (PPL)

A receiving model for gaining some kind of lead to potential clients. Any system that remunerates for contact information, such as name, address, e-mail, whatever will produce a list of potential clients. Normally, PPL is only profitable when visitors themselves input the correct information voluntarily, otherwise it is usually fraudulent.

pay per sale (PPS)

Online model for every sale made on a site due to the redirection of visitors. In the PPS structure, not only must a potential client visit the site, but they must also buy a product if the advertiser is to make any money. Usually a percentage of every sale is the final remuneration of any PPS.

site stickiness

Total time spent on a site throughout a given period of time. Stickiness is a measure of how often people spend visiting a site. This can usually be seen in average minutes per month, other times it is measured in pages viewed per month. Minutes per month is the best indication of how sticky a site is or is not. The biggest advantage to this is having people see the same impressions a repeated number of times.

unique visitors

This term refers to those individuals who visit a given site or network at least once in no more than a thirty-day time frame. Unique visitors are coming for the first time or after repeated times, but the average of this number is merely a way of calculating how many different IP addresses visit per month.

web site traffic

The amount of visits a site receives, usually per month. During the rise of the Internet Phenomenon, this was considered the most valuable tool for gauging a sites success or failure, but without conversion, results cannot be properly calculated. Thus web site traffic plus conversion equals results.

This paradigm will continue to grow as new ways of doing business online are created and along with new terms will come a better way to describe what it exactly is that we do as search engine marketers.

[The above article is a submission for Marketing Pilgrim’s Search Engine Marketing Scholarship Contest. Each Monday in October, entries will be published and the most popular article of the week will qualify for the $5,000 grand prize. If you’d like to submit an entry, please view the contest entry-requirements and guidelines.]