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Digital Marketing Terms

We’re guilty of using marketing lingo every now and then. This inspired us to create a glossary of digital marketing terms that every business owner needs to know. 

  • Ad Spend
  • AOV
  • BoFu
  • CAC
  • Conversion Rate
  • CPA
  • CPM
  • CRO
  • CTA
  • CTR
  • DPA - dynamic product ad
  • Key performance indicators
  • Landing Page
  • Lead Generation
  • LTV
  • MoFu
  • PPC
  • ROAS
  • SEO
  • Social Proof
  • ToFu
  • MER

Ad Spend

The amount of money spent on advertising for a product or activity.


Average order value (AOV) tracks the average dollar amount spent each time a customer places an order on a website or mobile app. To calculate your company’s average order value, simply divide total revenue by the number of orders


Bottom of funnel (BoFu) is the “purchase” stage of the online buying process.


Customer acquisition cost (CAC) is the total cost of money spent on marketing and sales efforts to win a customer.

Conversion Rate

A conversion rate, put simply, is the percentage of your audience that completes a desired action out of your total audience. For example, if you want your audience to make a purchase on your website after they click your Facebook ad, the percentage of users who make purchases is your conversion rate.


CPA stands for cost per action. Known on other digital marketing channels as cost per conversion, this is the price you pay for each action a user takes on your website because of your paid ad


Cost per “mille” (thousand impressions) refers to advertising bought on the basis of impression. This is in contrast to the various types of pay-for-performance advertising, whereby payment is only triggered by a mutually agreed upon activity (i.e. click-through, lead, sale).

The total price paid in a CPM deal is calculated by multiplying the CPM rate by the number of CPM units. For example, one million impressions at $10 CPM equals a $10,000 total price.

1,000,000 / 1,000 impressions = 1,000 units

1,000 units X $10 CPM = $10,000 total price


Conversion rate optimization (CRO) refers to the process of enhancing your website and content to boost conversions of website visitors into customers.


Call to action (CTA) is a word or phrase, often alongside a button or other form, used to encourage a customer to take a certain action, such as submitting contact information.


Click-through rate (CTR) is a metric that measures the ratio of clicks (how often someone clicked on your ad) to impressions (how many times your ad was viewed on the platform) for individual ads.

DPA - dynamic product ad

Dynamic product ads (DPA) look similar to other ads on Facebook, Instagram, Messenger and the Audience Network. However, instead of individually creating an ad for each of your products, you create an ad template that automatically uses images and details from your data feed for things you'd like to advertise.

Key performance indicators

A key performance indicator is a type of performance measurement. You determine what your KPIs are so that you can evaluate the success of your campaign. For example, maybe the KPI is ROAS, Cost per ATC (Add to cart), etc.

Landing Page

In digital marketing, a landing page is a standalone web page, created specifically for a marketing or advertising campaign. Unlike web pages, which typically have many goals and encourage exploration, landing pages are designed with a single focus or goal, known as a call to action (or CTA, for short).

Lead Generation

The process of generating consumer interest for a product or service with the goal of turning that interest into a sale. Facebook has lead generation campaigns. You can also collect leads on your landing page and use a standard event.


Lifetime Value (LTV) is an estimate of the average revenue that your customers will generate throughout their lifespan as a customer.


Middle of funnel (MoFu) content refers to assets that reach leads who are already in your database, engaging with your brand. Marketers publish and distribute content at this stage to align a buyer's needs to relevant products or features, gauge a prospect's readiness to buy, and move the right people closer to purchase.


Pay per click (PPC) is an advertising model that drives traffic to a website through paid ads, typically used on search engines.


Return on ad spend (ROAS) helps a business track effectiveness of ad spend by measuring revenue against dollars spent on advertising.


Search engine optimization (SEO) targets unpaid traffic from search engines by optimizing the quality and quantity of content on a website or a web page.

Social Proof

Evidence that a product or service is popular with a large number of people. Social proof on an ad can consist of comments, likes, ratings, reviews or testimonials.


Top of the funnel (ToFu) marketing refers to the first stage of the buyer's journey. It is the part of the process where marketers will spread brand awareness about their products and services to generate leads that will hopefully, eventually, become customers.


Marketing Efficiency Ratio (MER) is total revenue/total paid ad spend from all channels. This is a more holistic way of viewing paid advertising’s impact on revenue rather than channel-by-channel profitability.

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