Clicks, Impressions, and Conversions, Oh My! Digital Marketing Terms You Need to Know (Updated for 2018)
Follow the yellow brick road with me to the land of digital marketing. In this day and age, digital marketing is as common as sliced bread. In fact, comScore did a study that showed, for the first time ever in 2014, mobile web usage surpassed desktop usage. Today, the margin between the two continues to grow. That fact alone should be reason enough, but there are many other reasons you should invest in digital marketing. With more and more people using their smart phones to access the web, you’re going to encounter more and more proposals to get your company in front of those users.
I want to arm you with some knowledge so you can ask better questions and be more informed about the terms you’ll encounter and what they mean.
Here are the 10 most important digital marketing terms to know in 2018:
An impression is simply a view of your ad. It could be a banner ad, video ad, or text-ad. One view = one impression. If the same person sees your ad multiple times, they’ll count as multiple impressions.
Unique impressions are the number of unique people who saw your ad, regardless of how many times they viewed it.
Note: If the same person sees your ad on multiple devices (desktop, phone, tablet) they’ll count as a unique impression for each device.
1b. Viewable Impressions
Also known as "viewability." A viewable impression is one that's visible to the user when a page loads. So anything that appears in above-the-fold content will be a viewable impression - for the most part.
When looking at an impression report from an agency or media partner, ask how many of the reported impressions were viewable. That will give you a better idea how your digital ads are performing.
A click is just that. A click. Once a user sees your ad (logs an impression), they can click on it to take them to your landing page.
A conversion must happen after a click, and is always more valuable than a click. A conversion can be any sort of action you want the user to take:
- Filling out a form
- Downloading an eBook or case study
- Signing up for your eNewsletter
- Making an online purchase
4. Cost per Thousand (CPM)
Not only is this a pricing model for digital advertising, it is also a reporting metric. The Cost per Thousand refers to impressions. Many digital advertising company’s rates are based on a CPM. For example, you could buy 10,000 impressions at a $5.00 CPM and it would cost $50.00.
I’ve seen some companies ask for outrageous CPM amounts. If you’re entertaining a proposal that includes CPM rate, here are some guidelines for what is fair for each ad type:
- Video Pre-Roll: $25 - $45/CPM – Based on length of ad and whether it can be skipped.
- Display Ads: $5 - $25/CPM – Based on size of the ad and position on the website. Small ads at the bottom of a site are not worth as much as a large ad at the top of the site.
- Mobile Specific Ads: $10 - $30/CPM – Based on ad size and position on the site. Also based on targeting options (discussed below).
There are many more ad types out there, but those are the most common and should give you a good basis to work with.
5. Cost per Click (CPC)
This is more of a pricing model, but can also be used as a metric. Google AdWords is the best known company when it comes to charging per click. It’s a pretty cool model. It forces the advertiser to craft excellent ads that are worthy to be clicked on. It benefits both the advertiser and the platform.
You could get a million impressions, and not pay a dime. But, you won’t receive any clicks.
On the other hand, if you create an amazing ad, you could blow through your budget in just a few days after only a few hundred impressions. That’s why you need to find the right balance between impressions and clicks.
6. Cost per Action (CPA)
This is more of a metric, but can also be used as a pricing model for businesses with tons of conversions. Before you can figure this out, you need to assign a value to a conversion (action) the user takes on your website. With e-commerce, that value can be dynamically passed onto the conversion formula with their order total.
If you’re not an e-commerce store, you can still track conversions. Having a value assigned helps, but isn’t necessary. A conversion just lets you know that someone took action on your site after they clicked an ad. There is value in knowing that – even if you don’t have an exact dollar amount.
As a business owner, you have a general idea of what an action on your site is worth.
If you know you had 10,000 impressions, 100 clicks, and 10 conversions, you can use that information to decide if you want to continue your campaign, or alter the budget moving forward.
7. Click-Through Rate (CTR)
This is the percentage of people who clicked your ad from the total impressions. For example, if you had 10,000 impressions and 100 clicks, your CTR is 1%. For display ads, a 0.6% CTR is average. For Google or Bing Ads, 2% or so is pretty good.
Your CTR depends on many factors, but most of them you can control. One factor that can have a big effect on click-through rate is the ad creative, i.e. what your ad looks like will play a big part of whether or not users decide to click.
With the advent of smart phones, your targeting options have skyrocketed. It used to be that you could only choose websites, banner sizes, and physical location to target your ads. That’s no longer the case.
You can target your ads toward pretty much anything. For example, you could create three versions of your ad and target three types of users: Desktop, Android, and iPhone, each with a unique message meant for that type of user.
9. Landing Pages
This is probably the most overlooked part of digital marketing. The landing page is where the user goes after they click your ad. If you’re sending clicks right to your homepage, you’re probably missing out on a big opportunity.
The landing page should be related to the ad that clicks to it. For example, if your ad talks about different types of shoes you sell, the landing page should display different types of shoes.
Or, if your ad prompts the user to sign up for your newsletter, it should click through to your newsletter signup page, with the sign up form front and center.
The simple act of making your landing page relate to your ad copy can increase your digital marketing success greatly.
10. Mobile Gateway
These are a lot like video pre-rolls. The difference is they act as a “gateway” to your entire website, or a certain section of your website. They can be display ads, or video ads. They take up the entire screen, and the user needs to wait for a few seconds before they can continue on to the site.
While these are very effective, they can also be a distraction to site visitors. This can reflect poorly on your brand if your business is the one who shows up as the mobile gateway for that particular site.
The mobile gateways we use on our sites close automatically after 15 seconds, and also have an option for the user to manually close on their own should they so choose.
Digital Marketing Terms Recap
I wish I could simply click the heels of my ruby red slippers to make all of your digital marketing dreams come true. But, I can’t. So, my hope is that after reading this list, you’ll be better equipped to ask informed questions when presented with a plan to advertise your business on the web.
As always, we’re here to help. Reach out to us with any digital marketing questions you may have.