20

Jul

Performance Marketing Acronyms

Posted by: Jeremy Reither

Performance marketing is one of those industries where one of the first things to confuse newcomers is the alphabet soup that is the performance marketing lexicon. Here’s an introduction to some of the most commonly used performance marketing short-hand:

PPC (Pay Per Click) also referred to as CPC (Cost Per Click) (w): likely the most common advertising model used on the internet (due largely to the popularity of Google’s AdWords PPC platform). Advertisers only pay when visitors actually click on their ads. Clicks are generally easy to track by both the advertiser and publisher. Savvy advertisers can determine how many of those clicks ‘convert’ to sales or leads, but additional tracking of website visitors is required. Publishers often prefer this model because the onus is on the advertiser to make the most of the visitors. While they weren’t first to market, Google did revolutionize and revitalize internet advertising with the launch of its AdWords PPC service.

PPA (Pay Per Action), CPA (Cost Per Action) (w): A more advertiser-friendly advertising model, PPA (also called CPA), allows for advertisers to pay publishers only when a pre-defined action (like a product sold or form filled out) occurs. Google has recently added PPC advertising to their offerings, though at the time of this post the beta program is temporarily closed to new participants.

PPL (Pay Per Lead), CPL (Cost Per Lead) (w): Although PPL (also known as CPL) actually falls under PPA, the acronym is used frequently enough that it warrants its own entry here. When using a PPL advertising model advertisers pay for leads generated, often when a ‘lead form’ is submitted.

CPM (Cost Per Thousand Impressions) (w): The “M” in “CPM” stands for 1,000 (the Latin word mille means thousand, and the roman numeral for 1,000 is “M” – take your pick for an explanation). This is basically an “old” marketing term that has been used since before internet advertising, when advertisers paid a given rate for each “impression” their ad would make (for example, on a reader of a magazine). In the case of internet marketing those impressions generally correspond to unique page views. Some unscrupulous publishers get away with pricing their CPM ads on total page views – if you’re an advertiser be aware of this, and make sure your ads are priced accordingly.

CTR (Click Through Rate) (w): The percentage of times a link, banner or other advertisement is clicked. If a banner is displayed 100 times, for example, and clicked twice, then the conversion rate for that banner is 2%.

CR (Conversion Rate) (w): The percentage of visitors who viewers who perform a desired action (a sale, form completion, etc.). If 100 visitors come to a website, and 1 of them purchases a product, then the conversion rate for that website (or product) is 1%. Also see increasing conversion rates.

People continue to use countless other acronyms when talking to customers at internet marketing conferences often because they are trying to distinguish their company’s offerings from the standards above – but if you’re comfortable with the advertising models listed in this post you should be able to get through most high-level performance marketing discussions. As an advertiser if you find yourself drowning in alphabet soup while talking to publishers there’s a real possibility that they’re doing it on purpose in order to confuse you. Don’t be afraid to ask them to clarify. When they do, you may find that they should have just been using one of the acronyms above.

Also See:

• The Internet Advertising Spectrum of Risk

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