Online Advertising Terminology

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Click-Throughs

When viewers click on an ad with their mouse and go to the site advertised, it is called a “click-through.” Sometimes advertising prices are determined by the number of click-throughs. You don’t pay every time your ad is displayed; you pay only when someone actually clicks on your ad and is delivered to the appropriate page on your Web site.

Hits

Hits to your site are the number of times that another computer has accessed your site (or a file on a site). This does not mean that if a page on your site has 1,000 hits, 1,000 people have visited it. If your home page has a number of graphic files on it, this number could be misleading. A hit is counted when the home page main file is accessed, but a hit is also counted for every other file that loads along with the home page. Each one of your pages will have a number of files on it—you have a file for each graphic, a file for each ad you display, and often a different file for each navigation button on the page. So if a person visits 10 pages on a site and each page has 15 files included on it, then at least 150 hits would be generated.

Impressions or Page Views

When an ad is viewed, it is called an impression. Advertising prices often are calculated by impressions. If a person visits a page where your ad is displayed six times, this generates six impressions.

CPM

Cost per thousand, or CPM, is a standard advertising term. CPM often is used to calculate the cost of advertising if a site sells advertising based on impressions. If the CPM of advertising your computer software on another site is US$40 (that is, $40 per thousand impressions) and the number of impressions your ad generates is 2,000, then you, the advertiser, would have to pay US$80 for displaying the ad.

CPA

Cost per action, or cost per acquisition, is an ad payment model in which advertisers pay only when their ad leads to a complete conversion—sale, registration, download, or booking. Almost all affiliate advertising is based on the CPA model. This type of advertising model is best suited to high-volume sites as a large number of ad displays are needed to generate actual sales.