Concepts in Online Ads Industry
1,392 words in 9 minutes
I’ve been in Yahoo for almost one and a half year and dedicated myself in the Ads Targeting team. During my time here, I found that there are many domain specific concepts and abbreviations that everybody talks about and presume everyone else already knows. Of course, every time I will ask about those terms later. Otherwise I never know when they will show up later and make me confused again. But instead of ask each of them every time, I decide to do a “batch job” today and learn the common terms together. Here is my note.
Delivering ads to a pre-selected audience based on various attributes, such as geography, demographics, psychographics, web browsing behavior and past purchases.
Targeted advertising has proven to be beneficial for the advertiser as it is cost efficient because it is focused on certain traits. The consumers who are likely to have a strong preference will receive the message instead of those who have no interest and whose preferences do not match a product’s attribute. This eliminates some wastage.
Serving ads to people who have previously visited your website.
Retargeting is where advertising use behavioral targeting to produce ads that follow you after you have looked or purchased are particular item.
Examples of this is store catalogs, where after purchase they subscribe you to their email system hoping that they draw your attention to items for continuous purchases.
Retargeting is a very effective process, by analyzing consumers activities with the brand they can address their consumers behaviour appropriately.
The total number of people that have been exposed to or could possibly be exposed to an ad during any specific time period.
The total number of people who see your message. One person who is served your ad five times and clicks on it once yields a reach of 1, 5 impressions, and a clickthrough rate of 20%.
The number of times an ad has been served, regardless of whether the user has actually seen or interacted with the ad in any way.
The action taken when a user interacts with an ad by either clicking on it with their mouse or by pressing enter on their keyboard.
When launching a campaign, advertisers select a specific action or set of actions they want audiences to take. Each time a member of the audience takes this action, it is counted as a conversion. For example, the user download the APP or buy the product after served with the ad.
Clickthrough rate, expressed as a percentage of total impressions, shows how often people who are served an ad end up clicking on it.
An ad’s CTR is calculated by dividing the number of clicks an ad received by the number of times it’s been served, then converting that into a percentage. For example, if an ad received 5 clicks and was shown 1000 times, the CTR is 0.5%. The higher the CTR on an ad, the better it’s performing.
Call to Action (CTA): A phrase included within an ad, or a graphic element such as a button, which invites the audience to take a certain action.
Examples include phrases such as “Click to Read More”, “Download Your Free eBook Now”, or “Click Here”.
A 1×1 image pixel placed on a web page (such as a thank-you page) which is triggered whenever a conversion occurs. Usually transparent.
Conversion/Action rate, expressed as a percentage, a conversion rate can be calculated in two ways:
The first is by the taking the number of users who completed the conversion and dividing it by the total number of impressions served. The second, more common way, is by taking the number of users who completed the conversion and dividing it by the total number of users who clicked on the ad.
Used to measure a consumer’s behavior after they’ve been served an ad. If the “view through” window is set to 90 days, the consumer’s relevant actions within that time period can be attributed to the ad.
Return on investment is “the bottom line” on how successful an ad or campaign was in terms of what the returns (generally sales revenue) were for the money invested.
Cost per Acquisition: The cost of acquiring one customer. Typically calculated by dividing the total amount spent on an advertising campaign by the number of customers acquired through that campaign.
Cost per Click: How much an advertiser pays, on average, for each ad click. CPC is calculated by dividing the total amount spent on a campaign by the number of clicks generated.
Cost per Lead: How much an advertiser pays, on average, for each ad click that results in a lead conversion. CPL is calculated by dividing the total amount spent on a campaign by the number of leads generated.
Cost per Thousand: Metric that shows how much it costs to serve 1,000 ad impressions. Also used as a standard measure for buying display ads, as inventory is generally sold on a CPM basis.
Pay per Click: Pricing model where advertisers pay vendors or publishers based on the number of clicks received in a campaign.
Pay-per-lead: In pay-per-lead advertising, the advertiser pays for each sales lead generated. For example, an advertiser might pay for every visitor that clicked on a site and then filled out a form.
Pay-per-sale: Pay-per-sale is not customarily used for ad buys. It is, however, the customary way to pay Web sites that participate in affiliate programs , such as those of Amazon.com and Beyond.com.
Pay-per-view: Since this is the prevalent type of ad buying arrangement at larger Web sites, this term tends to be used only when comparing this most prevalent method with pay-per-click and other methods.
The delivery of an ad from a web server to the end user’s device, where the ads are displayed on a browser or an application.
This “batch learning” is actually very efficient and interesting. I actually learned more terms then I had expected. Hopefully next time these terms won’t be of that much trouble to me. I will also keep this post updated whenever there are new terms emerge.