Online Advertising Explained
In order to advance from Floggerdom to full blown ProFlogger, you need to earn some money, but maybe you are still struggling to wade through all the terms used to describe the various ways of making money online from advertising. Here, I’ll explain the things you need to know to get you on your way. Note this only relates to online terms.
Common Online Advertising Terms
You have probably seen these terms and TLA’s mentioned all over the place, but you may not know what they mean. What can make it even more confusing is that some of the terms in the list are used interchangeably. I’ll list them in alphabetical oder and give a simple explanation to clarify them for you.
- Affiliate and affiliate marketing- An affiliate essentially enters into a contract with a supplier to promote a product or service. Links on your site (the affiliate) direct users to a sales promotion or product page of the company. Affiliates earn money either by click-throughs, leads, or sales generated by their promotional efforts.
- Click through - Clicking an advertisement to reach an advertiser’s web site.
- Conversion rate - This is the percentage of actions per number of visitors to a web site. Actions can include sales, registrations, subscriptions or downloads.
- CPA - Cost per action. Payment is based solely on qualifying actions. This means that you only get paid when a specified action is completed, such as a sale, registration, etc.
- CPC - Cost per click through. The measurement of cost on a per click basis.
- CPM - Cost per thousand impressions. So if you charge a CPM rate of $10 for advertising on your site, that means for every 1,000 impressions your site receives, you earn $10. If your site gets 10,000 impressions, you earn $100.
- CTR - Click through rate. This is the average number of click throughs per hundred impressions.
- Impressions - The number of times an ad is seen by your vistors.
- PPC - Pay per click. Similar to CPC, the advertiser pays the publisher for qualifying clicks.
- PPI - Pay per impression. Similar to CPM, you earn money based on the number of times the ad appears on your site.
- PPL - Pay per lead. You earn money based upon the number of leads generated from ads on your site.
- PPS - Pay per sale. As it suggests, you get paid for sales generated by ads on your site.
These terms are relatively easy to understand once they are laid out for you like this. The question is, which one works the best?
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[…] you are unsure of the different advertising terms, see my post on Online Advertising Explained; CPC advertising is basically what the majority of sites use, with Google Adsense being the perfect […]