WHY TARGETING SMART
DIGITAL AD TERMINOLOGY
Here are a few digital advertising terms that you should know.
"You Can Only Expect What You Inspect"
Digital advertising is a powerful tool when used properly. Before we start to discuss what digital advertising is, we should define some commonly used terms by digital advertising agencies and marketers:
- Reach – The total number of consumers in the target audience
- Impression – When a digital ad is shown to a consumer.
- Frequency – The number of digital ads shown to each consumer.
- Click – When the consumer clicks the digital ad and enters the conversion funnel.
- Action – When the consumer completes the desired action of the digital ad (sale, opt-in for email, register, download, etc.)
- Conversion Rate – The percentage of consumers who go through the conversion funnel and complete an action.
- Cost-per-mille (CPM) – The cost of having a digital ad shown to a consumer.
- Click-thru-rate (CTR) – The percentage of consumers who clicked on a digital ad and reached an online property.
- Cost-per-click (CPC) – The amount of money spent to get a click on an ad.
- Cost-per-action (CPA) – The amount of money which is required to make a conversion from a digital advertisement.
What do reach, frequency and impressions mean?
Here’s a simplified breakdown:
- Reach: how many unique people see your ad
- Frequency: how many times those people see your ad
- Impressions: total views on your ad or piece of content
For example, if your reach is 100, and your impressions are 200, you can assume everyone saw it twice (for a frequency of two).