Every marketing professional should have a marketing dictionary on hand to wade through the plethora of niche terms and acronyms. But print resources won’t do. Marketing terms change and evolve regularly, with new terms being added to keep up with new technologies and strategies.
Below is a comprehensive glossary of key marketing terms (in alphabetical order) you’re sure to hear and use on any given day in this profession. Bookmark this page for easy access.
Experiments that assess the improvement in conversion rate (e.g. signup rate, checkout rate) from making changes to a page (or pages) on your site. Also known as “split testing.”
The changes you make are called variants. (They are the "B" in the term "A/B.") There is no limit on the number of variants.
You test variants against your baseline, which is simply your homepage before changes were introduced. (Your baseline is the "A" in the term "A/B.")
“Above the Fold” and “Below the Fold”
An old term for the upper half of the front page of a newspaper or tabloid. It’s where important news stories or photographs are located.
In the context of websites, it’s the content shown on a visitor’s screen when they first hit the website. The “fold” is the bottom of the visitors’ view screen at that point. And thus, “below the fold” is all content that is below that point that is not visible when the visitor first hits the page.
The location of the “fold” depends on the device used to access your site. A 34” monitor, a laptop, an iPad, or an iPhone X all have very different screen sizes, so the fold would be in completely different places.
The content “above the fold” should tell the majority of visitors what your product is and why it’s useful.
ACV (annual contract value)
The average annualized revenue per customer contract (excluding all one time fees that may exist).
If a customer signs a 4-year contract for $48,000, your ACV is $12,000. If you have 100 customers on a monthly plan at $1,000 per month, your ACV is also $12,000.
ACV is normally used instead of LTV (explained later) when the average customer stays with you for a year or longer.
Annual Contract Value can be useful when comparing it to Customer Acquisition Cost, as it reveals how long it takes to pay back the cost of acquiring a customer.
Ad Rank / Position
The position of a pay-per-click (PPC) ad on a search engine results page (SERP).
Your ad rank depends on your bid and your Quality Score (in Google Ads/AdWords). More on Quality Score below, but it’s a variety of factors including your click-through rate, the relevance of your ad and landing page to the users search query.
Analytics, broadly, uses mathematics, statistics, predictive modeling, and machine learning to find patterns and insight in data.
Businesses use analytics to conduct a wide variety of business tasks, including finding more effective ways to market and deliver their products and services.
Analytics in the digital marketing industry often refers to “website analytics” that report website usage statistics like number of visits, time on site, bounce rates, location of users, device and browser of users, and the actions they perform. The most popular website analytics tools include Google Analytics, Heap, and Mixpanel.
Other website analytics tools, like Hotjar and Fullstory, create heatmaps and user recordings to show website usage.
ARPU (Average Revenue Per User)
Similar to LTV (customer lifetime value) but is the term and formula most often used by sales teams.
However, it is not uncommon to hear sales teams talk about ARPU as being per month: “The Johnson account has an ARPU of $1,000 a month.”
If you calculate ARPU per month, you must multiply that number by the average number of months a customer stays with you to get to LTV.
So, in the example above, if most customers stay with you for 5 months, LTV would be $5,000 (5 * $1,000).
Stands for business-to-business. Means you’re selling to other businesses, not people or governments. These tend to sound "boring”, but they can be anything but.
Products that are B2B:
- Steel Mills
- Accounting software
Stands for business-to-consumer. Means you’re selling to people, not businesses or governments.
Products that are B2C:
- Grocery Stores
Stands for business-to-government. Means you’re selling to governments, not people or businesses.
These are often great businesses to be in due to high contract values and long contract lengths.
There is often overlap with B2B.
Products that are B2G:
- Voting software
- Plumber agencies
- Fertilizer (the government has to water its lawns, too!)
The percentage of people who visit a webpage, then leave without going to a second page.
A high bounce rate can indicate two things; that visitors find what they wanted and have no need to continue further, or they’re turned off by your landing page and decide to “bounce” (leave) to another site.
To calculate a website's bounce rate for a given period, divide the number of bounces by the total number of site visits during the period, then multiply by 100.
For example, if your site gets 1,000 visits in 24 hours, and 300 are bounces, your site's bounce rate is 30%(300 ÷ 1,000 × 100).
CAC (Cost of Acquiring a Customer)
How much you pay — to get someone to pay you.
- You sell furniture. You pay $100 for a classified ad in the newspaper. You sell two couches through it. Your CAC is $50.
More complicated example:
- You pay a salesperson $10,000 a month to send out emails for you. Plus a $1,000 bonus for each customer they bring in. You close 5 deals a month.
- Total cost: $10,000 + $1,000*5 = $15,000
- Number of deals: 5
- Cost divided by deals: $3,000
- Your CAC is $3,000.
The higher the CAC you can afford, the more options you have for growth.
The more viral your product is — meaning, the more people tell other people about it — the cheaper your CAC gets.
Let’s take Dropbox as an example. Ordinarily, let’s say Dropbox has a CAC of $500 through ads; they have to spend $500 to get a new customer. But, on average, a new Dropbox user refers 10 friends (at almost no extra cost to Dropbox).
Dropbox’s actual CAC would be $45, because they get 11 (1+10) customers for $500.
Click-through / View-through
Click-through conversions represent customers who clicked your ad and directly converted on your website. Your goal is for your ads to have a click-through conversion rate that is at or below your target CAC.
View-through conversions represent those customers who saw your ad, did not click it directly, but navigated back to your site via another channel and converted. With view-through conversions you can argue that the ad impression(s) inspired the conversion (particularly if the conversion occurred within minutes of seeing the ad). But it’s not as clear-cut an ad-to-conversation link as it is with click-through conversions.
When a prospect performs a desired action based on a specific call-to-action (see CTA).
Examples of conversions include:
- Opening an email
- Clicking a link in that email
- Filling out a form on a landing page (ex: signup form)
- Buying a product/service
Conversions can be fast (downloads of your iOS app) or slow (B2B sales). For longer conversions, your goal is to have the prospect complete several small conversions (open email, download white paper, etc.) on their way to completing the main conversion (buy your product/service).
The process of tracking conversions using analytics tools and ad channel pixels.
Tracking conversions lets you make informed decisions about your marketing efforts. For example, tracking conversions helps with:
- Optimizing ads by showing which ones are leading to conversions and which aren’t
- Showing you at where people are dropping off in your funnel
- Determining if your paid efforts are profitable or not
- Identifying where you should focus your attention and money to be most efficient
Copy / Creative
Two key elements of making an ad that gets cost-effective clicks from your ideal audience.
“Copy” is a fancy word for text. Copy differs from everyday text because copy is deliberately crafted for a specific and trackable outcome (such as getting someone to click on your CTA — aka call-to-action, aka button).
"Creative" is another way of saying multimedia, such as images and videos.
On most social networks, ads are made up of copy and creative. Oftentimes the creative is the first element of your ad that audiences will notice. However, the copy helps funnel your audience toward conversion.
CPA (Cost Per Acquisition)
CPA is similar to CAC. CAC is the cost to acquire a paying customer, CPA is the cost to acquire something that is not a paying customer. For example, you would calculate a CPA for:
- Starting free trials
- Sales leads
- Newsletter subscriptions
- App installs
In other words, CPA is a broad term for the cost for each of some meaningful conversion that is not a purchase, whereas CAC is the cost for a purchase conversion.
CPC (Cost Per Click)
The amount you pay every time someone clicks on one of your ads.
It’s also used in the context of how you pay for ads, in this case, you pay per click. Ad channels like Google Ads (AdWords) generally charge per click.
Paying per click is more results-based than CPM or CPV which charge based on views. Every click is a chance for conversion. A view of your ad doesn’t mean anything if the prospect doesn’t actually look at it.
For channels that charge on a CPM basis, you calculate an eCPC (effective cost per click). More on this below.
CPM (Cost Per Thousand Views)
Cost per thousand views (also called cost per mille). Used to mark the price of 1,000 advertisement impressions.
For example, if a CPM is $2 then you as the advertiser must pay $2 for every 1,000 impressions of your ad. CPM is the most common method for pricing digital ads.
Ad channels such as Facebook charge on a CPM basis.
CPV (Cost Per View)
The price you pay when your video ad is viewed. Typically your ad doesn’t have to be watched fully to trigger a pay out—but many channels require that it be played and on screen for at least two seconds.
For example if your CPV is $0.25 and your video ad receives 1,000 views then you pay $250 ($0.25 * 1,000).
CRO (Conversion Rate Optimization)
The use of analytics and user feedback to improve the performance of your website for conversions. CRO is typically associated with acquiring new customers, registrations, and downloads, but it can be used to improve any metric important to your business.
Example: You change the audience you target with your landing page to try to increase your number of free-trial users.
CRO is far reaching and includes everything from A/B testing, user surveys, checkout flow changes, to minor tweaks in copy and creatives.
When you sell related or complementary products to an existing customer. Cross-selling can be one of the most effective methods of increasing sales as you’re targeting an already proven audience — your customers.
Example: A supplement company cross-sells a protein powder to customers who recently purchased energy bars.
CTA / Call-to-Action
Some element designed to get people to take action. It can be a piece of text, a button, or a piece of creative.
There are many different types of actions you could have your visitor, lead, or customer take. Some common ones include signing up for a free trial, downloading an ebook, getting a coupon, or attending a seminar/webinar. CTAs can be found virtually in any digital space or asset, including your website, blog posts, emails, ads, and videos (to name a few).
The copy of your CTA should be succinct (2-3 words ideally) and needs to make clear to the reader what will happen if they click on that button or link. Examples include:
- Add to cart →
- Download guide →
- Start free trial →
CTR (Click-Through Rate)
The number of clicks to something divided by the number of times it was shown, expressed as a percentage.
For example, if an ad is clicked on 100 times after 6,000 impressions, the ad’s click-through rate is 1.67%: [(100 / 6,000) x 100 = 1.67%)].
CTR is a good indicator of how well an ad captures an audience’s interest (the higher the click rate, the more successful the ad is at generating interest). Google Ads/AdWords uses CTR as a primary indicator in calculating Quality Score.
“Typical” CTR’s vary drastically based on medium. For example, SEM campaigns can have CTR’s in the 10-40% for branded and high-intent keywords. Social ad channels and banner ads may see an average 0.2% or less, or roughly two users for every 1,000 views.
Drip marketing goes by many names (drip messaging/campaigns, automated emails, autoresponders, etc.). The premise of drip marketing is a set of messages that are sent out automatically on a schedule to audiences.
These sets of messages can be emails, in-app messages, texts, all of the above, and so on. It’s common to see an initial message triggered after a conversion (buy a product, start a free trial). Then other messages are triggered on a schedule (such as a second email 3 days later). But triggers can be more specific than that. For example, your drip campaign might look like this:
- Initial welcome email 5 minutes after someone starts a free trial
- An email when the free trail user performs a certain action (such as uploading a profile photo)
- An in-app message the second time the user logs into their dashboard
- And so on
Drip marketing is complex. There are many layers and potential outcomes available. Your goal with drip marketing is to:
- Turn free trial/new users into power users or
- Turn new customers into recurring customers and
- Encourage those power users/customers to recommend you to others
Articles about drip emails:
For our purposes as marketers, eCommerce is best defined as the practice of selling physical things online—whether it’s a business or an individual selling them.
Examples of eCommerce:
- Selling your used guitar on eBay
- Casper mattresses
- Buying a book on Amazon
- Netflix (not a physical thing)
- Going to the grocery store
- A premium LinkedIn subscription
- A lawyer
eCPC (Effective Cost Per Click)
Very similar to CPC in that it’s the price you pay for every click on your ad. However, eCPC, is a metric that tells you what your cost per click would have been if you were charged for some other metric, like views.
You calculate eCPC by dividing the amount you paid by the number of clicks you received. For example, if you paid $5.30 to have your Facebook ad seen 1,000 times, and you received 20 clicks, your eCPC would be $0.26 ($5.30 / 20).
Measures the percentage of people who leave your website on a page after visiting multiple pages. This differs from Bounce Rate, which measures the percentage of people who leave on the first page.
A high exit rate on a certain page (like an order page) can indicate a flaw in that page (such as design, copy, or functionality).
Tracks every stage people go through on their way to a major conversion (such as buying your product).
The funnel consists of six stages. Starting with people who are unaware of your product or brand, the funnel looks like this:
Awareness → Consideration → Preference → Action → Loyalty → Advocacy
The marketing funnel helps you know exactly where your prospects start losing interest and what you can do to improve your conversions.
As a marketer, you’ll use different strategies and assets to help people move from one stage to the next. For example, those in the awareness stage may not even know there’s a solution to their problem. You need to educate them.
Joe is a 31-year-old entrepreneur who wants to eat healthy but doesn’t have time to cook. He doesn’t know that your company delivers ready-to-heat gourmet meals. You need to make him aware of your brand (through content and ads, for example).
Pam, on the other hand, is a loyal customer of yours. Your goal now is to turn her into an ambassador of your product. How? Offer her incentives to recommend your brand to 5 of her friends.
It’s important to note that the funnel is not linear. Prospects often enter the funnel at different stages, move backwards, and skip stages (some people will recommend your product having never purchased it themselves!).
Often used to show a user’s behavior on specific webpages. For example, a heatmap tool like Hotjar can show you where users clicked on your homepage, how far they scrolled down, or which areas of your page capture the most interest/attention.
That information can be incredibly useful in knowing what to test, or change, about your landing pages.
Landing Page (LP)
The first page users see when they hit your site (often from an ad).
Your homepage is a very common landing page. Most people will hit that page first from Google, referral links, or direct visits.
The difference between a landing page and a homepage is that landing pages can be tailored to very specific audiences, ads, or products. Whereas your homepage has to be a lot more broad and wide-reaching.
For example, if you’re running an ad in Milwaukee, Wisconsin, you might use photos from Milwaukee on the landing page the ad points to. But your homepage would have images from around the world.
First introduced by Facebook, lookalike audiences allow you to target ads to a group of people who share similar interests and behaviors with existing customers.
For example, you can create a lookalike audience based on your existing Facebook followers, or upload a list of your customers. This allows you to widen your reach with audiences most likely to be interested in your brand.
Lookalike audiences often perform better than any other types of targeting (interest-based targeting, for example) on channels like Facebook,
LTV (Lifetime Value)
How much you expect your customers to pay you throughout their relationship with your company, averaged across all users or segments of users.
- If someone pays you $100 per month and the average users stays with you for 2 years, your LTV is $2,400 (24 months * $100 per month).
- If people generally only buy once and pay $200, your LTV is $200.
- If customers pay $500 up front, then $100 every year, and customers stay with you for 6 years on average, your LTV is $1,100.
- If the average customer purchases multiple times at various prices that total to $250, your LTV is $250.
Early companies won’t always have a good idea of what their LTV is, because they don’t know how long customers stay with them.
In general, keep this number conservative (low).
Alternative: LTV based on margins
It’s sometimes useful to say your LTV is the lifetime profit you make from a customer, not just how much they pay you.
For example, if you’re a hamburger joint and customers pay you $10 per hamburger, but you pay $3 per hamburger, you might want to treat $7 as your LTV — since you know you have to pay for a hamburger, no matter what.
This is usually the case for eCommerce companies shipping physical goods they have to pay for themselves.
Software businesses (such as SaaS businesses) generally don’t have to pay for anything when they get a new customer. So they can base their LTV on revenue — not margins.
Similar to A/B testing in that you’re testing variations of your website, email copy, ad creative, whatever, to find the best performing version. Except that instead of creating distinct variations with multiple changes (variants A, B, C, etc.) you instead set variations on specific pieces of your design and then create numerous variations that are combinations of those specific pieces.
For example, say you have a hero image, hero title, and hero CTA. You have two variations of your image, three variations of your title, and two variations of your CTA. Multivariate testing platforms would create 12 (2 * 3 * 2) variations of your page with different combinations of the different elements.
The total number of variations in a multivariate test will always be:
[# of Variations on Element A] X [# of Variations on Element B] … = [Total # of Variations]
Because the changes are minor and you’re testing so many of them, you need an immense amount of traffic to make multivariate testing worthwhile—along the lines of Google, Facebook, and Netflix. For anyone else it’s a waste of time.
An internet advertising model where advertisers pay a publisher (like Google) every time an ad is clicked.
Search engine marketing (SEM) is one of the most popular forms of PPC. You can bid for ad placement on a search engine like Google Ads (aka AdWords), based on related keywords.
PR (Public Relations)
The practice of managing the spread of information between companies and the public. The goal of your public relations efforts is to foster a positive reputation with the public through unpaid or earned communications.
For example, good PR would be getting a national publication to use your CEO as a resource for an article highlighting your company’s niche. Or getting a publication like Techcrunch to write about your latest product release.
Public relations is also necessary during times of crisis where a company’s credibility is at stake.
Articles about PR:
The action of searching for new potential customers or buyers (known as prospects), typically those with little or no awareness of your company.
Effective methods of prospecting include paid advertising, public relations, cold emailing/calling, and networking.
Prospecting is best when combined with retargeting—the process of (re)-engaging old leads.
A metric used by search engines like Google and Bing to determine your ad’s page ranking and how much you pay per click.
Your Quality Score measures the relevance of your ad and the landing page your ad funnels to. More relevant ads have higher clickthrough rates (CTRs), which raises your Quality Score.
Higher Quality Scores (Google, for example, uses a scale of 1-10 with 10 being the best) often lead to lower costs-per-click (CPC), which translate into lower costs per conversion.
Articles about Quality Score:
Reach / Impressions
Reach is the number of unique people who see your content.
Impressions are the number of times your content is shown.
For example, a Facebook post could show up in your News Feed both from the original publisher and when a friend of yours shares it.
If you saw both forms, that counts as one reach and two impressions.
The action of (re)-engaging old leads or customers that prospecting efforts brought in.
Retargeting is often used to reach out to past visitors to your website who did not convert. By tracking actions users take on your site you can create ads personalized to their actions to funnel them back toward conversion.
Retargeting lets you offer discount codes to people who didn’t purchase after a free trial, or remind people that they didn’t check out after adding to cart. It’s a powerful way to increase revenue and conversion rates.
Articles about retargeting:
Return on Advertising Spend. Measuring your ROAS helps you identify the effectiveness and profitability of your campaigns.
The formula for calculating the ROA of your campaign is:
Revenue / Cost of Campaign * 100% = ROAS
For example, a company spends $1,000 on an online advertising campaign in one month. In that month the campaign earns $5,000 in revenue.
$5,000/$1,000 * 100% = 500% ROAS
Seen another way, for every dollar spent, the campaign earns $5 in revenue (meaning it has a ROAS of 500%).
Return on Investment. Used to measure the level of return on an investment, relative to that investment’s cost.
The return on investment formula:
ROI = (Gain from Investment - Cost of Investment) / Cost of Investment
You invest $1,000 in Facebook ads. Those ads generate $1,200 in sales. To calculate your return on investment, divide your profits ($1,200 - $1,000 = $200) by the investment cost ($1,000), for a ROI of $200/$1,000, or 20%.
Stands for “Software as a Service”. When you pay monthly (or quarterly, yearly, etc.) to use a website or app.
In the past, companies used to sell you software (like Photoshop or Microsoft Word) once. Then you could use it forever—until the next big release in which you’d have to buy it again.
Now, companies charge you monthly to use the same software but it gets updated over time. That’s SaaS.
- Netflix is SaaS.
- Office 365 is SaaS.
- Adobe Creative Cloud is SaaS.
- Uber (no monthly fee; you pay per ride)
- The latest version of the Madden NFL video game series. (You pay per game)
- Food trucks (pay per meal)
Search engine marketing — Using paid advertising to increase a website’s visibility on search engine results pages (like Google). Advertisers pay to have their ad show amongst the top search results—often to overcome poor organic search results.
The biggest channels for SEM are Google Ads (formerly known as AdWords) and Bing.
Search engine optimization — Increasing the quantity and quality of traffic to your website through organic search engine results.
SEO is done by changing the content and structure of your webpages to make it more likely that Google and other search engines display your pages higher in search results. This can be through changing page content to include target keywords, or to improve the quality of articles so they rank better for the keywords it covers.
It’s one of the major ways to get free traffic to your website, but can take months and a lot of content writing to get anywhere.
Businesses that provide services rather than products. Generally, the major costs are salaries and office space — not physical materials, shipping, or manufacturing costs.
- A law firm. Major expenses are lawyers, paralegals, and unwitting law school interns.
- A plumbing company. Major expenses are plumber salaries, not the tools.
- A high school. Major expenses are teacher salaries.
- A barbershop. Major expenses are barber salaries.
Not service-based businesses:
- A towel company. Major expenses are unfinished cotton and dyes.
- Facebook. It doesn’t need a ton of employees to serve ads to over a billion people. Major expenses, if any, are computer servers.
- Allbirds. Major expenses are shoe materials.
The practice of using herd psychology to increase conversions. The idea is that since other people trust or use your brand, it must be worth it.
Social proof comes in many forms, including testimonials, logos of big-name companies, ratings, and badges (such as a Better Business Bureau logo).
A strategy to encourage customers to purchase, upgrade, or add-on other items in an effort to increase sales.
Upselling is often employed during the checkout process. For example, when ordering business cards from Vistaprint.com, users will be introduced to other products (like personalized pens). But it can also be done after a purchase, reminding you to re-fill your order (after you’ve potentially used all your business cards).
Value Props (Value Propositions)
Positioning statements that explain the benefit you provide to specific audiences, and how you make that benefit happen. For example, one of Uber’s value propositions may be:
- With a tap on your phone a car is sent directly to you.
- Your driver already knows where you want to go.
- And your payment is handled for you — no need to carry cash.
With the overarching value prop being convenience.
How likely a piece of content will go viral through word of mouth, whether it’s through social media sites like Twitter and Facebook, or in direct messages, texts, or conversations. In short, when people are spreading the word about your content/product for you.
There is no secret formula to going viral. It’s generally unique or interesting content that strikes a chord at the right time. Often the biggest explosions come completely unexpected.
One of the more reliable ways to create viral content is to take note of current viral content and build off their formula. You can check out the trending section on YouTube, the search/popular page on Instagram and your Stories page on Snapchat for ideas.