When interacting on our Geek/Talk Webmaster Forum, or when reading articles about online advertising and revenue generation, you’ll often encounter industry terms and acronyms that can, at first, seem confusing. To help guide you through the process and to make these key terms more familiar, below you’ll find detailed definitions of many of the most common terms related to online advertising, web publishing and affiliate marketing. We hope this helps.
- Ad Impressions (Imps): This refers to the count of how many times an advertisement is displayed on a webpage or app, regardless of whether it’s clicked or not. For example, if a banner ad appears on a webpage 100 times, it counts as 100 ad impressions.
- Click-Through Rate (CTR): This is the ratio of users who click on a specific link to the number of total users who view an advertisement, email, or page. It is used to gauge how well your keywords and ads are performing. CTR is the number of clicks that your ad receives divided by the number of times your ad is shown (clicks ÷ impressions = CTR). For example, if you had 5 clicks and 1000 impressions, your CTR would be 0.5%.
- Cost Per Click (CPC): This metric reflects the cost of an individual click on an advertisement. In a CPC pricing model, advertisers pay each time a user clicks on their ad. For instance, if an advertiser pays $2.00 per click and receives 100 clicks, the total cost would be $200.
- Cost Per Mille (CPM): This is the cost an advertiser pays for one thousand views or impressions of their advertisement. For example, if a website publisher charges $5 CPM, the advertiser pays $5 for every 1,000 impressions of its ad.
- Cost Per Action (CPA): In this pricing model, the advertiser pays for a specified action from a prospective customer. This action could be a sale, a click, or a form submission (e.g., contact request, newsletter sign-up, registration, etc.). For example, if a company advertises a product and only pays when a purchase is made, this is a CPA model.
- Retargeting/Remarketing: This is a form of online advertising that involves showing ads to users who have previously visited the advertiser’s website. For example, if a user visits a website but doesn’t make a purchase, the website can use retargeting to show ads for the same products when the user visits other websites.
- Ad Exchange: This is a digital marketplace that enables advertisers and publishers to buy and sell advertising space, often through real-time bidding. Ad exchanges allow advertisers to buy ad impressions across a range of sites, focusing on the audiences they most want to reach.
- Programmatic Advertising: This is the automated buying and selling of online advertising. This process uses artificial intelligence technologies and real-time bidding for inventory across mobile, display, video, and social channels. Programmatic media buying enables brands to tailor their messaging and creative to the right audience, at the right time, in the right context.
- Content Management System (CMS): This is a software application or set of related programs used to create and manage digital content. CMSs are typically used for enterprise content management (ECM) and web content management (WCM). An ECM facilitates collaboration in the workplace by integrating document management, digital asset management, and records retention functionalities, and providing end-users with role-based access to the organization’s digital assets. A WCM facilitates collaborative authoring for websites. Examples include WordPress, Joomla, and Drupal.
- Search Engine Optimization (SEO): This is the practice of increasing the quantity and quality of traffic to your website through organic search engine results. It involves adjusting or designing your website to improve its ranking on search engines. The goal is to get a website to rank in the number one spot or at least on the first page of Google. SEO tactics include using relevant keywords in titles, meta descriptions, and headings (H1), using descriptive URLs with keywords rather than strings of numbers, and schema markup to specify your site’s content.
- Responsive Design: This web design approach ensures that web pages render well on a variety of devices and window or screen sizes, from desktop computers to mobile phones. This is achieved through the use of flexible layouts, flexible images, and cascading style sheet media queries. The goal of responsive design is to build web pages that detect the visitor’s screen size and orientation and change the layout accordingly.
- Web Analytics: This is the process of analyzing the behavior of visitors to a website. This involves tracking, collecting, measuring, reporting, and analyzing web data to understand and optimize web usage. Web analytics is not just a tool for measuring web traffic but can be used as a tool for business and market research, and to assess and improve the effectiveness of a website.
- Affiliate: This is a person or organization that promotes the products or services of a company in exchange for receiving a commission for the sales or leads they drive. Affiliates can be individuals or companies that use various methods to promote products, including content marketing, email marketing, pay-per-click advertising, and display advertising.
- Affiliate Network: This is a platform where merchants and affiliates can connect. The network acts as an intermediary between the two, providing technology to track sales and manage the relationship. Examples of affiliate networks include Commission Junction, ShareASale, and ClickBank.
- Commission: This is the payment an affiliate receives for performing the desired action. Commissions are often a percentage of the sale price, but can also be a fixed amount per conversion. For example, an affiliate might receive a 30% commission for each sale of a $100 product, which would be $30.
- Cookie Duration: This term refers to the length of time a cookie stays on the potential customer’s system. Cookie duration is critical in affiliate marketing because it determines how long the affiliate has to earn a commission after a user clicks their affiliate link. For example, if the cookie duration is 30 days, the affiliate will be credited with the sale if the user purchases any time within those 30 days.
- Conversion Rate: This is the percentage of visitors to a website or landing page that complete a desired goal (a conversion) out of the total number of visitors. A high conversion rate indicates successful marketing and web design. For example, if an affiliate’s landing page receives 200 visitors in a month and has 50 sales, the conversion rate would be 25%.
- Merchant: Also known as a retailer or brand, a merchant is a company that sells goods or services and offers an affiliate program. The merchant provides affiliates with tracking codes for marketing its products, and pays commissions for sales or leads generated.
- Two-Tier Affiliate Program: This is a type of affiliate program structure where affiliates earn commissions on their conversions (first tier) and also on conversions of other affiliates they refer to the program (second tier). For example, if you sign up as an affiliate for a product and then recruit another affiliate, you would earn a commission on your sales and a smaller commission on the sales made by the affiliate you recruited.
We hope that this glossary provides a more in-depth understanding of the terms and practices frequently used in online advertising, web publishing, and affiliate marketing.
Last modified: December 29, 2023