Internet marketing acronyms are all over the place, and they can be a lot to keep track of. I thought it would be helpful to write up this post with definitions for some of the most common ones.
- Cost per click (CPC). This is one of the most common types of pricing models, and one you’ll encounter often if you use Google AdWords to buy advertising. CPC means that advertisers pay each time someone clicks on their ad. The price paid per click is determined by how much competition there is for keywords and how valuable those keywords are to advertisers. If a keyword has high competition and low value for an advertiser, it will be expensive to bid on and therefore costly for users. For example, if there’s fierce competition among advertisers bidding on “flowers” as a keyword term with very little search volume each month, then the CPC would be higher than it would be for something like “buy flowers.”
- Cost per impression (CPM). CPM stands for cost per thousand impressions. It refers to how much an advertiser pays every time their ad appears in front of 1,000 people not specifically after they click on the ad (though some advertisers may choose this model). Ads can appear in several places: social media feeds; websites or apps; emails inboxes; mobile devices’ lock screens or notification centers; etc.)
CPM stands for Cost Per Thousand. It’s a common metric used to measure the effectiveness of online advertising campaigns, and it can be used to calculate other metrics such as CPC, CPA and CTR. CPM is calculated by dividing your total cost by the number of impressions (the number of times your ad was shown) to arrive at an average cost per 1,000 impressions (CPM).
CPM is one of the most commonly used metrics for pricing online ads because it’s simple and straightforward. If you’re selling an ad space on your website or app, CPM provides an easy way for advertisers to calculate how much they should pay to reach their target audience based on how many people see their ads over time.
It’s also common within social media marketing since social platforms like Facebook use this method as well; they charge advertisers based on how many times their posts are shown in news feeds rather than charging based on clicks or conversions like some other types of digital marketing do.
vCPM is a metric used to measure the effectiveness of video ads. vCPM stands for “viewable cost per mille” or “viewable cost per thousand impressions.” In other words, it’s the amount that advertisers pay to reach their target audience when they see an ad.
The idea behind vCPM is simple: if you can’t prove that an ad was actually seen by customers, it shouldn’t be counted as having any effect on sales. That’s why some agencies and networks insist on using this method when determining how much value they’re getting from their advertisers’ campaigns even though tracking insights like these isn’t always easy.
CPA (cost per action) is a business model that pays for a user to perform some action, such as downloading an app or signing up for a service. CPA campaigns are used to acquire customers who have a high lifetime value.
CTR is one of the most important metrics for advertisers. The CTR stands for “click-through rate” and it’s the number of clicks on an ad divided by the number of times that ad was shown. In other words, if you have an ad with a CTR of 10%, then you’d expect 10% of people to click on your ads if they were shown 1,000 times.
The main benefit of using CTR as a metric is that it gives you insight into how well your ads are performing in terms of generating clicks from users who see them online (or anywhere else). It also allows you to compare different campaigns against each other for example, let’s say your business has two separate Facebook campaigns running simultaneously: Campaign A has a CTR of 0.5%, while Campaign B has a CTR of 2%. This means that Campaign B is outperforming Campaign A by four times!
CPL (Cost Per Lead)
The Cost Per Lead (CPL) is the amount you pay for a lead that results in a sale or other desired action. A CPL model can be used to pay for leads from multiple sources, such as social media and email marketing campaigns. In this case, you would calculate your total cost of acquiring each new customer by dividing the amount spent on marketing by the number of new customers acquired through each channel.
The good thing about this type of pricing model is that there’s no risk involved: if someone doesn’t convert into a customer after being sent through your sales funnel then they don’t cost you anything!
Cost Per Install is the cost of getting a new user to install an app on their device. CPI is a common metric used in mobile app advertising. You pay for each install, regardless of whether or not it’s successful (i.e., the user opens and uses your app).
Lifetime Value (LTV) is used to determine the value of future customer acquisition efforts. LTV is calculated by analyzing the revenue generated by a cohort of customers over their entire relationship with a brand, and then dividing it by the number of customers in that cohort. In other words, if you sell $100 worth of product today, and your customer stays with you for two years before churning, then your LTV is $100/2 = $50.
You can think of LTV as how much revenue one new customer will bring in over time. This metric helps marketers make decisions around which channels should receive priority when spending on advertising campaigns or other acquisition efforts like SEO or PPC ads. If a new lead costs $500 but has an LTV over 3X higher than any other channel (i.e., they’re more valuable), then it makes sense for marketers to invest more heavily into generating leads from this specific channel than from another one where there are cheaper leads but lower revenue potential overall per lead
The ROI is the amount of money that you get back from spending money.
When you purchase an ad, you set a budget and CPC bid on each keyword. Using this metric, you can determine which keywords are worth your money by comparing how much revenue they generate to their cost.
Cost Per Engagement (CPE) is a type of online advertising that allows advertisers to pay only when their ad results in an action from the user. CPE allows marketers to specify the exact actions they want users to take, such as downloading an app or making a purchase.
Because CPE campaigns require more investment and planning than other types of digital marketing strategies, they’re generally reserved for bigger brands with more resources at their disposal. If you’re interested in implementing this strategy on your website or social media profiles, be sure you choose an experienced agency with extensive knowledge about how these campaigns work so that you can maximize their effectiveness.
CR / CVR
- Cost per conversion (CR)
- Cost per view (CPV)
- Cost per action (CPA)
The difference between cost-per-view (CPM) and cost-per-action (CPA) is that with CPM, you’re only charged when your ad is displayed, whereas with CPA you’re only charged when your ad is clicked. This means it’s possible for a high-performing campaign to have low CPCs but higher CPAs than a lower performing campaign with lower CPCs.
Revshare is a revenue share model, which means that the affiliate earns a percentage of sales generated by his or her referrals. It’s by far the most common way to pay affiliates, and it’s used in many affiliate programs that are run on platforms like ShareASale and Rakuten Marketing (formerly Linkshare). Revshare can be either fixed or variable. With fixed revshare, you receive the same amount every time someone completes their purchase; with variable revshare, you earn more money when sales are higher.
An effective cost is the total of a campaign divided by the number of conversions. It’s an important metric for measuring performance of a campaign, because it takes into account both the cost and effectiveness of clicks.
The formula for effective cost is:
Effective Cost = Total Campaign Spend / Conversions
What don’t you know about internet marketing?
In internet marketing, there is no shortage of acronyms. In fact, it can sometimes be tough to keep track of all the terms and abbreviations that are used in the industry.
The list below contains some of the most common acronyms you’ll come across when doing research on internet marketing:
- CPC: Cost per click (CPC) is the cost that a business pays for each click by its visitors on their ads. This is also known as “cost per action” or “pay-per-click”.
- CPM: Cost per thousand impressions (CPM) is one of three primary ways to pay for online advertising – along with CPC and CPV (cost per view). It refers to how much an advertiser pays when an ad appears 1,000 times online – regardless if anyone clicks on it or not. It’s also known as “cost per mille”, meaning “thousand” in Latin, because they’re paying X amount every time their ads are viewed 1,000 times.
Understanding internet marketing acronyms gives you a common language with which to communicate with clients and other professionals in digital marketing, who use those acronyms often.
- CPC -Cost per click
- CPM -Cost per thousand impressions
- CPA -Cost per acquisition
- CTR -Click through rate
- CPL -Cost per lead
I hope that this has been helpful for you. If you have any questions or comments, please feel free to leave them below!