Running a small business, you find yourself spinning many plates and wearing many different hats.
Whether you handle your Digital Marketing in house or outsource to a Digital Marketing Specialist, understanding the Digital Marketing Terms and Jargon of the industry will ensure you can make informed decisions when needed, quickly.
The last place you want to be is wasting valuable time scratching your head trying to figure out what the marketing term ROAS means.
In this post, we’ll break down some of the most commonly used Digital Marketing Terminology which you may find on a report or brought up in a meeting.
Why Use Advertising Metrics?
Digital Marketing Terms give you a good understanding of what is and isn’t working by helping you to;
- Create better ads
- Aid in goal setting
- Improve your ROI
As many a business owner knows – No one knows about your product or service!
Online Advertising is one of many (albeit a fantastic one of many) ways to grow your business – namely because of the data behind it all.
Let’s touch on each of these points in slightly more detail.
Utilising Digital Marketing Terms and Metrics To Create Better Ads
Digital Marketing Terminology and metrics give you a quick understanding of which Ads are working well and which ones aren’t. You can use this data to amend any online ads with the best (data driven) practices in order to ensure you’re getting maximum view, clicks or interaction.
Using Advertising Metrics To Aid In Goal Setting
Setting Goals is of great importance for any business.
As we’re all aware, goals should be SMART
Specific
Measurable
Achievable
Relevant
Time-bound
To get to where you want to be, you need to know where you are. Understanding your Digital marketing terms help you get specific aswell as measure the success of your marketing campaigns
Improving your Return On Investment (ROI)
By understanding what works and what doesn’t you’re able to do more of what’s working and less of what isn’t.
Advertising metrics help to ensure that you’re investing, not only your money wisely, but your time also.
12 Digital Marketing Terms You’ll Likely Come Across
Now that we understand the purpose behind these advertising metrics and the Digital marketing terminology that comes with them, let’s break them down in as little digital marketing jargon as possible.
Landing Page
Landing pages are any page where a visitor “lands” on your website – from a Digital Marketing viewpoint it goes a little deeper. Landing pages are often customised to a specific campaign or offer and are usually created for specific ads.
The more a landing page is tailored to the audience the better
Conversion Rate % (CVR) -Landing Page
This conversion rate is in relation to how well your website or landing page converts relevant traffic into a lead or enquiry.
To give you an idea of how this works, if we know that for every 100 visitors we send to a landing page we get 1 conversion or “new enquiry” for your sales team to handle, then the conversion rate is 1%
Note: this should be monitored and improved constantly via ongoing conversion rate optimisation.
Cost Per Acquisition (CPA)
Cost Per Acquisition is a metric used for online lead generation projects. This allows us to understand exactly how much it costs us to acquire every new conversion be it a lead or a sale of a product.
A really handy metric as it goes hand in hand with calculating the ROI of any particular campaign.
Conversion Rate % (CVR) – Lead to Sale
Understanding how well your sales team can convert inbound leads is fundamental when it comes to working out your budget.
We’re trying to gauge an understanding of how many inbound leads will turn into paying customers.
If you have any past data, be sure to utilise it – don’t just go off of a “gut feeling”. If you have no previous data, then best be conservative, if you believe you will convert 1 in every 3 inbound enquiries, budget for converting 1 in 6 to be safe.
Note: again, this conversion rate is a metric which you should strive to improve. There are numerous sales resources out there – so be sure to stay current.
CPC (Cost Per Click)
PPC advertising, as it suggests in the name, is a bidding system in which you Pay-Per-Click. The more you are willing to bid for a certain keyword, the higher up on the results page you’ll be.
Each keyword will have a Cost Per Click depending on how competitive it is. Knowing the cost per click will help when calculating the budget. You can use Google’s Keyword Planner to aid in this.
Average Order Value (AOV)
An important metric we need to understand is the Average Order Value. Knowing this gives us a better idea of how many customers we need in order to hit our financial forecast.
Note: If running a new campaign, this should be as specific to the service or product on the landing page as can be.
Return on Investment (ROI)
ROI is the amount of profit (the return) which is seen from a specific investment – in our case this could be Google Ads, Search Engine Optimisation or an investment into your Social Media or Website.
If you spent £100.00 on an Ad which saw a return of £1000.00 then your ROI is 900%. If you are running multiple ads, some with less of an ROI, it may be worth investing more in the more profitable option and closing off some of the less profitable ads.
Return on Ad Spend (ROAS)
ROAS tells us how much revenue has been generated based on the amount of money invested.
The key difference between ROI and ROAS is that ROAS measures Revenue whereas ROI measures profitability.
ROAS is used more often when, for example, you are running Ads via an Agency and need to factor in management fees into the campaign.
Call To Action (CTA)
A Call To Action is something on your website or Ad which prompts your visitor to do something.
This can be anything from;
- Clicking a button
- Filling out a contact form
- Entering their email address
- Making a purchase
Having CTAs on your website/Landing page is key to ensuring your visitor knows where to go next and keeping the Bounce Rate low.
Bounce Rate
Bounce Rate is the percentage of visitors who leave your website/webpage without having done anything ie: clicked on a link, filled out a form, or having bought a product.
Bounce rate is an important factor as it helps you gauge how interesting your content is. If visitors are landing on your website and “bouncing” this could be for a number of reasons from page speed, boring content or not having a Call To Action.
The takeaway here is that the bounce rate is something which you should always aim to improve – the lower, the better.
Open Rate
Coming onto a Marketing Channel such as Email Marketing, we have Open Rate. This Metric helps us in understanding how many prospects have opened your email.
Improving on your Open Rate is something which should always be worked towards, a few things which can affect the Open Rate are;
Subject Line
Time the email was sent
How often you send emails (are you bombarding them)
Click Through Rate (CTR)
Click Through Rate is a metric used to measure the number of clicks an Ad or Organic listing had in relation to the amount of impressions (the amount of people who saw it) it received.
Click Through Rate gives you a good understanding whether or not your listing is performing well. Again, the CTR is something which you should constantly look to improve.
If you find your CTR being low, consider changing the Copy or images in a way which is more enticing for the person reading it.
Final Thoughts
By now, you should have a better understanding of some of the Digital Marketing Jargon which you may encounter.
Every campaign is different with different numbers to be expected. A key takeaway being that these numbers should consistently be monitored and aimed to be improved to ensure you’re getting the best “Bang for your buck”.
If you’ve come across other Digital Marketing Terms which you’d like some context added to then post them in the comments below – we’re happy to shine some light on this.
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