Online Marketing Glossary

Not sure about the difference between ROI and LTV? Looking for ways to boost your CTR and lower your CPC while maintaining your KPIs? Demystify the jargon & spoon up a bowlful of online marketing alphabet soup with this handy glossary. New terms added regularly.

Online Marketing Terms, Explained

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There are currently 4 names in this directory beginning with the letter C.
CAC – Customer Acquisition Cost
In the most general terms, the CAC is a measure of how much it costs to successfully acquire a single paying customer.
Example: You run an ad campaign that costs $1 per click. Of the visitors who click-through on your ad, 10% go on to become a monetized customer. The acquisition cost for this ad would then be $10 – you have to pay for 10 clicks in order to get 1 paying customer. If what you're selling costs more than $10, congratulations! If not, it's time to rework your ad campaigns for lower costs per click and/or conversion rates.

Conversion Rate
This is the number of users who take a specific action, divided by the total number of people exposed to the opportunity to take that action. It is expressed as a percentage. A conversion rate requires a stated goal.
Example: On your website, you have a form that encourages people to sign up for your sales emails. The goal is email signups. You get 100,000 visitors in one month. Of those, 14,487 sign up for your emails.
Your conversion rate is 14.49%

CPC - Cost per Click
In a pay-per-click (PPC) campaign, this is the amount you spend each time someone clicks on one of your ads.
Example: You spend $1.74 for 87 clicks. Your CPC is $0.02.

CTR - Click-through Rate
The number of clicks on an ad in your ad campaign, divided by the number of times the ad was viewed. The number is reported as a percentage. Multiple clicks by the same person are generally counted in most advertising platforms.
Example: Your ad is viewed 10,000 times and is clicked on 3847 times. Your CTR is 38.47%.

A high CTR may mean that your ad is very interesting. However, for an ad campaign to be truly successful, it must generate sales and not just clicks.