Formula Definitions:

Bounce Rate:

  • Bounce Rate measures the percentage of visitors who leave a website after viewing only one page.
  • (Number of Single Page Visits / Total Visits) x 100

CPA (Cost Per Acquisition):

  • CPA calculates the cost of acquiring a new customer through a specific marketing campaign.
  • Total Cost / Number of Acquisitions

CPC (Cost Per Click):

  • CPC represents the cost of each click in a pay-per-click advertising campaign.
  • Total Cost of Campaign / Total Number of Clicks

CPL (Cost Per Lead):

  • CPL measures the cost of acquiring a new lead through a marketing campaign.
  • Total Cost of Campaign / Number of Leads Acquired

CPS (Cost Per Sale):

  • CPS calculates the cost of acquiring a new sale through a marketing campaign.
  • Total Cost of Campaign / Number of Sales Generated

CPM (Cost Per Mille):

  • CPM is the cost per one thousand impressions in a display advertising campaign.
  • Total Cost of Campaign / (Number of Impressions / 1,000)

CTR (Click-Through Rate):

  • CTR measures the effectiveness of an online advertising campaign by calculating the percentage of users who click on an ad after seeing it.
  • (Number of Clicks / Number of Impressions) x 100

Customer Churn Rate:

  • Churn Rate calculates the percentage of customers who stopped using a product or service during a specified time period.
  • (Number of Customers at the Start of Period - Number of Customers at the End of Period) / Number of Customers at the Start of Period

LTV (Customer Lifetime Value):

  • LTV estimates the long-term value a customer will bring to a business over their entire relationship.
  • Average Purchase Value x Average Purchase Frequency x Average Customer Lifespan

Return on Ad Spend (ROAS):

  • ROAS measures the effectiveness of an advertising campaign by calculating the revenue generated for every dollar spent on advertising.
  • (Revenue from Ad Campaign / Cost of Ad Campaign)

Return on Investment (ROI):

  • ROI measures a marketing campaign's profitability, considering the campaign's cost and the revenue generated.
  • [(Net Profit - Cost of Investment) / Cost of Investment] x 100

General Definitions:

Ad Exchange:

  • Technology platforms are used to buy and sell online ad impressions on an auction basis.

Ad Rank:

  • Ad Rank is a metric used in paid search advertising to determine the position of your ad in the search engine results page. It is calculated based on your bid, ad quality, and ad extensions.

Ad Server:

  • A technology that places ads on websites and provides a variety of specialized services for publishers and advertisers, including tracking the number of impressions and clicks delivered by a campaign, blocking ads from serving on specific sites (blocklist) and selecting the ads that will yield a publisher or advertiser the highest value.

Ad Tag:

  • An ad tag is a snippet of HTML, typically composed of JavaScript or an IFRAME that tells a browser to request some content from an ad server.

Affiliate Marketing:

  • A performance-based marketing strategy where businesses reward affiliates for each visitor or customer brought through the affiliate's marketing efforts.

Attribution Models:

  • Attribution models are methods used to assign value to different touchpoints in the customer journey to understand which marketing channels and interactions contribute to conversions.

Audience Targeting:

  • A method that enables advertisers to show an ad specifically to visitors based on their shared behavioral, demographic, geographic and/or technographic attributes.

Behavioral Targeting:

  • Using previous online user activity (e.g., pages visited, content viewed, searches, clicks, and purchases) often through the use of 3rd party data providers to generate a segment that is used to match advertising creative to users.

Data Management Platform (DMP):

  • A centralized system for gathering first-party data, integrating with 3rd party data, user-level performance data, and applying this data to one's advertising strategy.

Data Providers:

  • Third-party vendors who provide a holistic view of consumers. These rich user attributes are then used for both targeting and campaign analytics.

Dayparting:

  • A method that enables advertisers to show an ad specifically to visitors only on certain days of the week or times of the day.

Demand Side Platform (DSP):

  • Trading or bid execution technology for buyers to manage ad exchanges, networks, and SSPs.

Frequency Capping:

  • Frequency capping is a strategy in advertising that limits the number of times a user is shown a particular ad within a defined time frame to prevent ad fatigue.

Impression:

  • The total number of times an ad has been served.

Impression Share:

  • Impression share measures the percentage of total available ad impressions that your ads received in a given campaign, indicating how well you're reaching your audience.

LTV (Customer Lifetime Value):

  • LTV estimates the long-term value a customer will bring to a business over their entire relationship.

Predictive Analysis:

  • Powerful analytic engine that encompasses various statistical and data mining techniques to make predictions/forecasts about the future.

Private Auction:

  • A by-invitation-only, real-time marketplace comprised of handpicked sites/placements.

Programmatic Advertising:

  • Automated, data-driven ad buying.

Quality Score:

  • A metric used by search engines like Google to assess the quality and relevance of keywords and ads in a PPC campaign, which can impact ad placement and costs.

Real-time Bidding (RTB):

  • An automated process that allows media buyers to evaluate, bid on, and purchase ad inventory in real-time on an impression-by-impression basis.

Remarketing:

  • A tactic that targets those individuals who have already visited a site with ads based on what is already known about them.

Sell Side Platform (SSP):

  • SSPs provide outsourced media selling and ad network management services for publishers.

Segments:

  • A set of users who share one or more similar attributes. Also referred to as a data segment or audience.

Viewability:

  • A metric created by the Internet Advertising Bureau (IAB) used to measure how viewable an ad actually is when it's served.

Frequency Capping:

  • The limit of how many times a given ad will be shown to a unique cookie during a session or within a specified time period.