We have all been in a position where we’ve received a media or marketing proposal, and it’s normally packed full of acronyms. You sit there scratching your head, wondering what the heck it all means.
So then the tiring and time-consuming process of popping each acronym into Google begins. You spend hours down the acronym rabbit hole wondering who on earth bothered to create all of these and, by the end of it, you don’t want to look at another proposal again.
As a business owner, all you need to know is how the company’s product or service is going to help you achieve your business goals. You don’t need to spend hours deciphering what they’ve put into your proposal.
Media and marketing professionals often forget that their day-to-day speak is gibberish to everyone else. I should know—I was one of those media professionals who put acronyms into my proposals assuming everyone understood what I was going on about. And, boy, was I wrong!
To make things easier, I have put together this acronym cheat sheet, which explains the most common ones in a way any business owner will understand.
Let’s get started
Also known as the average order value, this helps a business determine on average how much they are making per order/sale. To work this out, a business owner would look at how much they have made per day, week or month, and divide this by the number of customers.
For example, if a business made $3,000 for one day and they had 26 customers, then they would divide $3,000 by 26 to get an AOV of $115.38.
Of course, as a business owner, you understand that each order is not exactly $115.38. However, you now know on average how much each order is worth to you.
Also known as client lifetime value. This refers to the lifetime value of a client or how much you expect a client to spend on your product or service during their lifetime.
Let’s look at a psychology practice for example: They may know that, on average, they retain a client for 12 visits at a value of $150 per visit. This would mean the lifetime value per client for them would be $1,800 (12 x $150).
Also known as cost per acquisition. This refers to the average cost to acquire a paying client for a campaign.
For example if a dentist spent $2,000 on Adwords and $1,000 on social media advertising for one month, and they secured 37 paying clients, then their CPA would be $3,000 divided by 37 = $81.08. This is how much on average it costs that dental practice to acquire a new paying client.
Also known as cost per click. This is the cost you pay each time someone clicks on your ad in a marketing campaign. This is typically linked to a Google campaign.
Let’s say you run a mobile mechanic business and you wanted to run ads on Google. You might invest $1,000 for this campaign, but rather than paying each time your ad is seen (this refers to CPM, which will be discussed shortly), you only pay each time your ad is clicked. So let’s say your ad was clicked on 500 times and you invested $1,000. Then your CPC would be $1,000 / 500 = $2.
Also known as cost per lead. This is where your marketing campaign is focused on lead generation. For example you may pay an advertiser for every person who signs up for a free demo or requests a call. You are paying for a lead for your business.
Also known as cost per thousand. This is the amount you will pay per thousand views of an ad.
For example, if you were to run an advertising campaign with a newspaper website and they were to pop a display ad on their homepage, you would pay a set price per thousand. For this example, let’s say you pay $50 per thousand. If the newspaper homepage was to generate 100,000 views per day, your campaign might cost you 100 x $50 per day to run.
Also known as cost per view. This is the cost you would pay per view of a video. In most cases, your video does not need to be viewed in its entirety. It might be that you pay when the viewer exceeds 30 seconds of a 60-second video. If, however, a viewer clicks out at say 20 seconds, then you wouldn’t pay for the view.
Also known as call-to-action. This is usually the action you want someone to take when they view your ad.
For example, a marketing ad might say click here for 40% off. This message entices someone to view your website and make a purchase. A call-to-action usually has a direct link to sales. If, for instance, you are not an ecommerce business, you may then have a CTA that is something along the lines of register for a demo or download your scholarship application here. These messages still get the viewer to take a desired action.
Also known as click-through rate. This refers to the total number of people who may have clicked on your ad when they see it.
For example, you may be running a branding campaign on a radio website. If 1,000 people see your ad and 100 people click on it, then your CTR would be 1,000 / 100 = 10%. CTR isn’t only used to calculate clicks on a display campaign. It can also be used to calculate the number of clicks to a website in an email campaign for example.
Also known as lifetime value. This is calculated to understand how much a customer is worth to your business. It would usually indicate the amount they will spend with your business over their lifetime.
For example, you run a psychology business and you know each new patient would stay for an average of 10 visits. If each visit would cost the patient $150, then you know on average your LTV of a new client is 10 x $150 = $1,500.
Also known as page view. This is the number of times a web page is viewed. In marketing terms, this may also be called impressions.
Also known as return on investment. This is used to calculate the amount of money your business makes for a marketing campaign.
For example, if you run a marketing campaign on Facebook and invest $1,000 over 4 weeks, and you can attribute $10,000 to your Facebook campaign, this might be perceived as a high ROI. You received a 10x return on the amount you invested. So for every $1 you put into your marketing campaign, you made $10 in net profit.
Also known as run-of-network. This is a term used when running a display campaign. Rather than choosing to run your ad on a single page on a website, you may choose to run your campaign across a publisher’s entire network targeting specific viewers.
For example, if you were to run a baking class, you may choose to display your ad to viewers across a network who are interested in food and recipes. This would allow you to purchase a RON display campaign, targeting specific interests.
Also known as run-of-site. Similar to the above however, the run-of-site display campaigns refer to your ad being displayed on any page of a website. So rather than choosing to run your ad on the entertainment page of a newspaper site, you may opt to run your ad across the entire website. This generally allows you to tap into a larger audience who may only visit the food or sports section of a website.
Also known as search engine marketing. This is where you would increase your site’s visibility on a search engine such as Google or Bing. You would pay to promote your site in the top positions for particular search terms.
Also known as search engine optimization. This is where you would invest in increasing your site’s visibility in organic search results on a search engine such as Google or Bing. This can be done through on- and off-page SEO campaigns.
Also known as social media marketing. This is where you would promote your business across social networks such as Facebook, Instagram, and YouTube. Some of your SMM campaigns may be based around promoting content posted to your social media pages or through paid ads. SMM campaigns are a great way to reach a broader audience and generate cost-effective brand exposure.
Also known as share of voice. This relates to your piece of the pie. For example, you may be running a ROS (run-of-site) display campaign with a media outlet and they tell you your SOV for this campaign is 20%. This means 20% of all display ads across their site during your campaign will be of your ad.
Also known as unique visitor. This refers to a person who visits your site. This figure is usually significantly lower than a site’s impressions.
For example, a site may have 300,000 impressions but, on average, each person who visits their site is viewing 3 pages. Therefore, their UV is actually 100,000. UV counts each individual who visits a site rather than impressions, which count the number of pages viewed.
Also known as word-of-mouth marketing or word-of-mouth advertising. This usually refers to a person who is referred to your business by a friend or relative. If someone is out and actively talking about a positive experience they have had with your business, they may influence others’ purchasing decisions and drive them toward your business. This is a form of WOMM.
Also remember that your current customers are your best advocates and by providing them with an exceptional customer experience, you are potentially gaining more customers at no cost to your business except that great experience. On the other hand, this also works in the opposite way. If a customer has a terrible experience with your business, they may influence other customers away from your business.
By creating this list above, I am hoping you will have a better understanding of your marketing proposals and how to calculate or understand business acronyms.
We all know marketing professionals love their jargon, so be sure to ask them to explain these to you in a way that relates to your business and you will understand.
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