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Some Most Important Terms in Digital Advertising

Advertisers

An advertiser, also known as a merchant or retailer, is a Web site or company that sells a product or service online, accepts payments and fulfills orders. Advertisers work with publishers to promote products and services in exchange for a commission on leads or sales through a variety of methods.

An advertiser is the owner of an offer/product. They pay affiliates for every conversion. When an ad network speaks about “Advertisers”, they refer to people who buy traffic there.

Publishers

A publisher, also known as an affiliate or re-seller is an independent party that promotes products and services of an advertiser in exchange for a commission on leads or sales. A publisher displays ads, text links, or product links on its Web site, in e-mail campaigns, or in search listings and is paid a commission by the respective advertiser when a visitor takes a specific action such as filling out a form, making a purchase or subscribing to a service.

Demand-Side Platforms (DSP)

DSP, or demand-side platform, allows advertisers to buy impressions from a wide range of publisher sites that are targeted to specific users based on things like location and previous browsing behaviors. A DSP ‘plugs in’ to an ad exchange (covered below), where publishers make their inventory available. DSPs analyze the impressions SSPs put out and purchase on behalf of advertisers. They might pay more for impressions in a certain location or to reach a consumer who might find that ad relevant

Supply-Side Platforms (SSP)

An SSP, or Supply-side platform, is used by online publishers to automate the selling of their advertising space, or inventory. It’s basically the same as a DSP but from the other side. While a DSP used by marketers to buy ad impressions from exchanges as cheaply as efficiently as possible, SSPs designed for publishers to maximize prices they sell impressions at. They’re both powered by similar kinds of technology.

RTB: Real-time bidding

It’s a method where bids are made for each and every impression in real-time auctions that occur while a web page is loading (unlike static bidding, where the bid is produced in groups of up to several thousand impressions).

Ad Network

A company that connects advertisers to publishers (owners of websites). Media Buyers can purchase its inventory. There are several pricing models available, and you bid for impressions, clicks or views. Why use ad networks? To reach a lot of websites while at the same time being able to optimize your traffic.

Frequency Capping

The number of times (impressions) a single user will see each ad within a defined period of time.

CPM

CPM stands for cost per thousand Impressions (the M is the Roman numeral abbreviation for 1,000.) CPM is one of the most common ways of buying digital media. You essentially pay for every time your ad loads on a page or in an app. It’s a simple way to buy, but is coming under increasing scrutiny because the client is charged for the impression whether or not a consumer actually sees it. If, for example, the ad appears below the browser window and the user never scrolls down, the advertiser still pays

CPC

CPC stands for cost per click advertising. Here the advertiser pays when a click is made on an ad. Some advertisers prefer to buy CPC versus CPM because they believe they only pay when someone is interested enough in the message to want more info. Some CPC programs are very effective, but there is a potential for fraud if a company deliberately uses bots or some other technique to drive clicks not initiated by a real person.

CPL

CPL is short for cost per lead, meaning that the advertiser pays when a lead form is completed and submitted. CPL is common in B2B marketing, where it is unlikely that someone will make a purchase immediately. It can be a very effective way to buy, though there is some risk of fraud if bots are programmed to fill in leads automatically.

CPA or CPS

Cost per acquisition or cost per sale. Here the advertiser pays only if a purchase is made. This is relatively low-risk way to buy media because the advertiser only pays when revenue is driven. But many media companies won’t sell media this way because they must assume all of the risk in the ad buy. If no one buys, they make no money.

CPI

In mobile app marketing, CPI refers to media programs where the advertiser pays for every installed app. Lots of app marketing is purchased CPI, because it is a fast way to drive installs. But the quality of installs driven varies by media vendor. Some CPI vendors are extremely reputable, and work hard to find users that will likely use an app. Others use incentives like giving a user free “gold” for a game in exchange for their downloading an app. These “incentive installs” tend to be of low quality. In addition, there are also very disreputable companies that drive installs with bots.

PPC

Pay-per-Click. A payment model where an advertiser pays only when the ad’s actually clicked on.

EPC – Earnings per Click

EPC shows you the revenue you get for each 100 clicks. It’s the average amount of cash you can earn per every 100 clicks on your affiliate link. How to calculate the EPC? Take the amount generated in revenue from an affiliate link, divide it by the total number of clicks on that link, and multiply the value by 100.

Click-Through Rate

The Click-Through Rate measures the percentage of clicks compared to the impressions. If you’re using banners, it’s very important to check your CTR performance since it’s one of the most important indicators, allowing you to make decisions. Normally, a high CTR means that more people are clicking your banners.

Conversion

When a website’s visitor makes a purchase. The action of getting a sale, lead or subscription is referred to as a conversion.

Conversion Rate

This is a metric used to showcase the number of times an affiliate link has registered a conversion in comparison with the number of times the link/banner has been viewed (it’s a percentage). How to find out what the conversion rate of your ad is? Just take the amount of sales a banner has generated and then divide it by the number of impressions received. Afterwards, multiply that result by 100 in order to get your CR percentage.

Return on Investment (ROI)

Amount derived by actually subtracting your net revenue from the total amount of costs. This is a calculation used to ascertain the profitability of a PPC campaign.

Profit

The amount of money you actually earn from your sales after having paid all your expenses.

Tracking Method

The method used by affiliate programs to track sales, clicks or leads.

Tracking Platform

This type of platforms allows you to track your activity in a simple and reliable way. Normally, you’ve got different filters available to analyze your data.

Tracking URL

The URL of a website with a specific code attached to it. All visitors that arrive at the website will be tracked through this code.

Traffic

Number of visits and visitors a site gets.

301 redirect

An eternal redirect from a URL to another. These redirects will send website visitors and also search engines to a whole different URL than the one that was originally typed on their browser or picked from one of the results from the SERP.

302 redirect

A temporary redirect from a URL to another. Search engines will decide whether or not to keep the old page or simply replace it with the one they find on the new location. In case the wrong kind of redirect has been set up, search engines can become confused which means there’ll be traffic loss.