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Glossary of Advertising Terms

13th July 2017

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You could say that there are two types of advertising; those that work and those that don’t. However, whilst this saying may be true, the problem most companies face is how to make them work. And work well.
The advertising team at Design Inc was set up to help companies to cut through the options, risks and jargon associated with advertising. And to work with these companies to build a successful media & advertising plan.

Knowing where to invest your advertising budget should not be a gamble. It needs to be a strategic decision based upon a number of factors, including:

the target audience
the available budget
the message
the duration of the message
the desired goals

Design Inc are able to help companies with all forms of advertising, from traditional print adverts, digital banners, OOH, radio, TV, through to online & search advertising such as PPC/AdWords, Facebook ads, etc.

To help cut through the jargon, we have introduced a simple glossary of advertising terms:


AdWords

This is an advertising service by Google for businesses wanting to display ads on Google and its advertising network. The AdWords program enables businesses to set a budget for advertising and only pay when people click the ads. The ad service is largely focused on keywords. See PPC

Audience
The intended target market for an advert, usually defined in terms of specific demographics (age, gender) and psychographics (interests, behaviours).

Average Persons
This is the number of people that, on average, will be exposed to each Spot. Average Persons is calculated by multiplying  Population by Rating then dividing by 100.

Banner advert
This is a form of online advertising, and entails embedding an advertisement into a web page.

CPC
This stands for ‘Cost per Click’. This is the price paid by an advertiser to a publisher for a single click on the ad that brings the consumer to its intended destination.

CPM
This stands for ‘cost per thousand impressions’ and is another measure of cost efficiency which enables you to compare the cost of this ad to other advertisements. CPM is calculated as the Media Cost divided by Impressions divided by 1,000.

Cross-Channel
This relates to technology or media that applies across multiple formats and across multiple devices. This is different from “cross-device”, which implies only multi-device application rather than multiple formats within devices.

CTR
This stands for ‘click through rate’ and is a metric that measures the number of clicks your ad (s) receive per number of impressions.

DOOH
This stands for ‘Digital Out-Of-Home’ advertising,  that is, digital ads that are marketed to consumers when they are “on the go”, such as in transit, in commercial locations, or in waiting areas.

Display Advertising
This is a form of online advertising where an advertiser‘s message is shown on a web page, generally set off in a box at the top or bottom or to one side of the content of the page.

Frequency
This is the average number of times the advertisement will be presented to the audience. One way to calculate frequency is to divide the number of Impressions by the Reach. Another way is to divide GRPs by Reach Percentage.

Geotargeting
Showing ads to people based on their mobile device’s location, postal code information they submit when registering a site/service or GPS coordinates collected by site/service.

GRP
This stands for ‘gross rating point’ and is a measure of the size of an advertising campaign by a specific medium or schedule. GRP is calculated by multiplying the number of Spots by Rating.

Impressions
These are the total number of exposures to your advertisement.  One person can receive multiple exposures over time.  If one person was exposed to an advertisement five times, this would count as five impressions. Impressions are calculated by multiplying the number of Spots by Average Persons.

Insertion
This is the actual placement of an advertisement – digital or otherwise – as recorded by the ad server.

KPI
The ‘Key Performance Indicator’ is a measurable value that demonstrates how effectively a company is achieving key business objectives.

Media Cost 
This is the price you pay to present your advertisement. There are many different ways to price media including points, impressions, clicks, leads, actions, days, weeks, months, etc. However, it ultimately boils down to the amount you pay to present your advertisement, which is Media Cost. Media Cost excludes the cost to create the advertisement and other costs.

Media Market or Market 
This describes the set of people that could potentially be exposed to your advertisement. The media market is often described using Designated Market Areas or DMAs, (which are trademarked by Nielsen). However, Media Market can be any market you define.

Message Recall
A measurement used to evaluate an ad’s effectiveness at driving a viewer’s ability to remember a brand or the message it intended to communicate. Typically measured using a control/exposed survey methodology.

OOH
This stands for Out-Of-Home advertising, referring to any advertisement viewed in commercial, public locations.

Opt In
Refers to an individual giving a company permission to use data collected from or about the individual for a particular reason, such as to market the company’s products and services.

Population 
This is the total number of people in your Media Market.

PPC
Standing for ‘pay per click’, this is a type of internet marketing in which advertisers pay a fee each time one of their ads is clicked. Essentially, it’s a way of buying visits to your site, rather than attempting to “earn” those visits organically. Search engine advertising is one of the most popular forms of PPC.

Rating 
This is the percentage (0 to 100) of the market that will likely be exposed to your advertisement. Rating is an estimate based on past performance often sourced from surveys.

Reach 
This is the number of people (or percentage) in the market that will likely be exposed to one Spot of advertising.

Skyscraper
A tall, thin online advert (often one of two sizes: 120×600 and 160×600).

Spot
This is a single broadcast of an advertisement. Typically, an advertising placement includes multiple spots.

Yield
The percentage of clicks vs. impressions on an ad within a specific page. Also called “ad click rate.”

 

Should you wish to discuss your advertising goals with our team, please contact Frank Norman on 01784 410380 or by email.