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; payment based entirely on actions that are considered ‘qualifying.’ Any action that results in fulfilling conversion rates can be considered a CPA action; 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 payper-click, this is the cost the advertiser incurs for every time her or his advertisement is clicked on to their destination site. Neither arrival at the site nor any purchases or other actions on that site is calculated in this cost.
cost per thousand (CPM)
The base price for every 1000 impressions of an ad banner that is seen or downloaded by a visitor. (M is the Roman numeral for 1000.) For example, if the CPM is $10 and the request is for 500,000 impressions, the final ad will price at 10 × (500,000/1000) = 10 × 500 = $5000.
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 debated.
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. However, graphics can also be requested. Because a hit is merely the activity of requesting a file from the Web server, and every request is a hit, a single page view can represent several hits.
hybrid model
Any combination of online models for marketing payment, for example CPC and CPA or any other combination.
impression
A single instance of online advertisement displayed. The single act of displaying once 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 generate a sale. If they do not generate a sale, 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 serve an impression more easily is given priority rather than the destination site itself.
pay-per-lead (PPL)
A receiving model for generating some kind of lead to potential clients. Any system that remunerates for contact information, such as name, address, email, or any information to 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 direct visitor referrals. 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 much time people spend visiting a site and how often they return. 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 a set time frame, usually thirty days. Unique visitors may be visiting for the first time or returning after repeated visits before the set time frame, but the usual method is counting the number of different IP addresses visiting per month.
website 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 site’s success or failure, but now true success is usually defined through conversion results. Thus website traffic and conversion together equal results.
This discipline 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 exactly what we do as search engine marketers.
Aaron Pratt
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; payment based entirely on actions that are considered ‘qualifying.’ Any action that results in fulfilling conversion rates can be considered a CPA action; 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 payper-click, this is the cost the advertiser incurs for every time her or his advertisement is clicked on to their destination site. Neither arrival at the site nor any purchases or other actions on that site is calculated in this cost.
cost per thousand (CPM)
The base price for every 1000 impressions of an ad banner that is seen or downloaded by a visitor. (M is the Roman numeral for 1000.) For example, if the CPM is $10 and the request is for 500,000 impressions, the final ad will price at 10 × (500,000/1000) = 10 × 500 = $5000.
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 debated.
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. However, graphics can also be requested. Because a hit is merely the activity of requesting a file from the Web server, and every request is a hit, a single page view can represent several hits.
hybrid model
Any combination of online models for marketing payment, for example CPC and CPA or any other combination.
impression
A single instance of online advertisement displayed. The single act of displaying once 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 generate a sale. If they do not generate a sale, 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 serve an impression more easily is given priority rather than the destination site itself.
pay-per-lead (PPL)
A receiving model for generating some kind of lead to potential clients. Any system that remunerates for contact information, such as name, address, email, or any information to 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 direct visitor referrals. 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 much time people spend visiting a site and how often they return. 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 a set time frame, usually thirty days. Unique visitors may be visiting for the first time or returning after repeated visits before the set time frame, but the usual method is counting the number of different IP addresses visiting per month.
website 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 site’s success or failure, but now true success is usually defined through conversion results. Thus website traffic and conversion together equal results.
This discipline 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 exactly what we do as search engine marketers.
Aaron Pratt
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