Basic terms to help you understand the complex world of digital advertising
By Greg McCoy
Digital advertising is an ever-evolving world of technology, regulation and terminology. It has also become an essential method for connecting with potential customers. As a business owner, you don’t need to understand the intricacies of how certain ads appear in your social media feed and Google searches, but you should understand a few key terms that help measure the success of your digital advertising dollars.
Reach is all about the people. This is simply the total amount of people who saw your ad, which isn’t analogous to how successful your ad was at converting customers or creating conversation around your product. Three classifications of reach are organic, paid, and viral. Organic reach is when a person sees your content directly on your business page or website. Paid reach is when an ad you spent money to promote shows up in a person’s feed or Google search. Lastly, viral reach is when friends of people that engaged with your ad by liking, sharing, or commenting see it in their feed as well.
Impressions measure how many times your ad was seen. The number of impressions your ad receives will almost always be higher than your reach as one person can experience your ad multiple times. Impression measurements are also subdivided into organic, paid, and viral categories.
This is likely the term you’re most familiar with already. Engagement is any interaction between a customer and your ad. Typically, the most important forms of engagement (in order of importance) are likes, comments, and shares. However, when it comes to your digital ad spend, you can almost disregard engagement entirely in favor of CTR.
CTR stands for click-through-rate. CTR is calculated by dividing the total number of impressions by the total number of clicks. This is one of the most important metrics when it comes to digital advertising. It doesn’t matter if your ad has zero likes, comments and/or shares if your CTR is high. Just FYI, Facebook’s global average for CTR is .9%, so let that be your benchmark for a successful ad.
PIXEL / TAG
Pixels, aka Tags, are trackers embedded within an ad’s link that help you follow a person’s journey from your ad to your website. It’s the fancy stuff that really lets you know how customers experience the journey from your ad’s first impression to conversion.
CPC stands for cost-per-click. CPC is calculated by the total amount spent promoting your ad by the number of clicks it received.
Conversion is the goal of every ad dollar spent. Conversion metrics track how many people completed the action you desired, such as signing up for a newsletter or purchasing a product. Conversion = #winning.
Nope, that doesn’t mean Certified Public Accountants this time (though they definitely deserve a shoutout for being our patron saints of tax season)! CPA in digital advertising stands for cost-per-acquisition and is determined by the cost of your total ad spend divided by the number of conversions. This should be the major focus of anyone looking to track the success of their advertising dollars.
If you’d like to talk to our digital advertising experts here at Social Kapture, send an email to email@example.com telling us a little bit about yourself and the properties you currently manage. We’ll get back to you in no time!