Marketing vocabulary is complex. But it’s important to know to understand how well your marketing dollars perform. Web design agency, Huemor, lists and explains 5 key marketing terms you should get familiar with.
- Conversion Rate: The number of orders divided by the number of people who visit your website. Conversion Rate is a ballpark percentage you can use to estimate expected sales. That said, conversion rate can be a messy metric because it doesn’t account for the revenue you make per sale. If you’re fulfilling fewer orders but at higher order values, your conversion rate will decrease, but you might be making more money. Don’t fall into the trap of mistaking your conversion rates for more than what they are.
- Average Order Value (AOV): Revenue divided by the number of orders. AOV helps you quantify your conversion rate, but it doesn’t tell you much about your individual products. Instead, AOV tells you about how much an average customer spends each time they visit your store.
- Cost-per-Click (CPC): Your total ad spending for an ad divided by the number of clicks on that ad. A high CPC can either mean your add performs poorly (that people don’t click on it) or that there’s a lot of competition for your target audience. A low CPC means the inverse: your ad either performs well or there’s very little competition for your target audience.
- Impression: Impressions are the number of views a piece of media (usually an ad) receives. Marketers use impressions to calculate the click-through rate (CTR) of an ad. The higher your CTR, the better your advertisement…generally.
- Funnel: A process every buyer goes through before they make a purchase. Funnels help track your marketing process. You can calculate each stage’s conversion rate to measure its effectiveness.
Getting familiar with these terms will help you better measure your marketing performance for a more successful online business.