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8 Paid Advertising Terms to Know

Because digital marketing jargon can be overwhelming, we shared 8 email marketing terms to know several weeks ago. But the vernacular of paid advertising can be confusing too. 

We’re back this Monday with a list of 8 terms you should know if you’re thinking about paid ads for your business.

1. Impressions

The phrase “making an impression” might come to mind. After all, you want to make an impression when you advertise, right? In paid advertising, “impressions” are used to quantify the number of views or engagements your ad receives. 

Some platforms charge for paid ads based on the number of impressions your ad is guaranteed while others charge for the number of clicks your ad receives. Make sure you know if you’re paying for impressions or clicks before investing your money in paid advertising on a specific platform or website.

2. PPC Marketing

Speaking of clicks, “PPC” is a common paid marketing term and stands for “pay-per-click” marketing. The acronym is self-explanatory: you pay per click, which means you pay the advertising company for every click your ad receives.

PPC marketing can garner a huge return on investment if done well. If you pay $2 for a click but sell a $200 product, the profit certainly outweighs the cost of PPC advertising.

3. Campaign

The next two terms in this list appeared in our email marketing terms to know, but they’re handy when talking about paid ads too. 

In paid advertising, an ad campaign is a series of ads created to promote a message or achieve a goal such as brand awareness, web traffic, lead generation, or conversions.

To strategically plan and create an ad campaign, start with this question: “What action do I want customers and prospects to take after seeing my campaign?” This is the “call to action” (CTA). Once your CTA is established, you’ll have a clearer idea of the purpose driving your campaign.

4. Conversion Rate

In paid advertising, the conversion rate is the number of people who performed the call to action divided by the number of people who viewed your ad. 

The conversion rate is expressed as a percentage. The higher the conversion rate, the more effective the ad was in reaching people!

5. Click-Through Rate

In the world of paid advertising, the click-through rate is another percentage that reflects the number of viewers who clicked your ad divided by the number of impressions. It’s easy to confuse the click-through rate and conversion rate, but there’s an important difference.

The click-through rate measures clicks, while the conversion rate measures follow-through on the call to action.  

Click-through rates are especially helpful in determining whether PPC marketing is costing you more money than it’s making.

6. A/B Testing

Want to know which ads have higher conversion rates? You can perform an “A/B test.” A/B testing is a method used to determine which ads are most effective in reaching your audience. 

When running an A/B test (also known as a “split test”), you should only change one element at a time. Try a different font, color scheme, graphic, call to action, or time of day to run the ad. Then compare conversion rates between ads A and B. You can repeat A/B tests as many times as you like to ensure you get the most return on investment in paid ads.

7. Acquisitions Funnel

“Acquisition” in digital marketing occurs when you bring in or “acquire” new customers. A funnel refers to the marketing strategy you use along the customer journey from the moment they’re introduced to your brand until they become loyal customers. So the goal of an “acquisitions funnel” in paid advertising is to win over new customers! 

You’ll eventually have multiple acquisitions funnels based on different products or prospects you’re trying to reach, which is why acquisitions funnels are crucial to strategic, successful digital marketing.

When you know your acquisitions funnels inside-out, you’ll know the platforms or content to invest in most. If you want to learn more about acquisitions funnels, check out this blog

8. Scaling

Scaling is an exciting benchmark in digital marketing because it means you’re ready to grow your advertising efforts! You’re ready to scale when you’ve put in the work and your paid ads are now working for you

What are some signs it’s time to grow your advertising campaigns online? Increased click-through rates and conversion rates or refined A/B testing are a couple of ways to measure scalability, and you can find other metrics here.

We get it: the landscape and language of paid advertising is changing every day, and it’s hard to keep up. Familiarizing yourself with these paid advertising terms will get you moving in the right direction. We recommend this list if you want to learn more. Our team at Sigl Creative also loves to help people like you share your passion with the world through paid ads. Schedule a call today, and we’ll determine the best paid advertising strategy for your business and even create the content to make it happen!

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