top of page
  • Katherine McCahill

Digital Marketing Jargon - A Handy Guide

Marketing jargon doesn't need to be intimidating. It's a crucial part of defining success and figuring out what you want to measure for your business and your campaigns.

If you don't set a goal or create KPIs early on you can end up chasing vanity metrics or optimizing for the wrong thing. Determining clear goals at the outset is also a great way to keep clients and team members focused. Digital marketing means that you can measure just about anything. In my years of marketing experience, I've found that understanding these metrics can be the difference between a fine campaign and a really successful one.

KPI - Key Performance Indicator

These are determined based on your campaign goals. KPIs can include page views, clicks, email sign up, likes, shares, or add to cart. The most important thing to note is that they are driven by the business. Where does a business need to see growth? It could be something like driving web traffic so that they can move all bookings online rather than a call desk. Or maybe they need to see people redeem coupon codes. Whatever the KPI, this should drive the strategy.

LTV - Lifetime Value

This is calculated by finding the average revenue a customer will generate over their lifespan. For a subscription or membership business this means understanding how many months someone will stay with you. On the flip side, an ecommerce business needs to figure out how many purchases the average customer and how large an average purchase is. Once you understand this you get a clearer picture of how to bring in revenue each month and how frequently your marketing needs to hit.

CPA - Cost Per Acquisition

Specifically, this is how much does it cost to acquire a customer. For example, membership programs can be two to three times the cost of the first month. When you are pricing your programs you'll want to keep this in mind.

ROI - Return on Investment

This is the ratio between net profit and investment. This can be applied to building a website, experiential marketing, professional services, and other marketing activities. It's the biggest indicator of profitability.

A/B Test or Split Test

This is one of my favorite tactics in digital marketing. This is the act of splitting an audience to test a specific aspect of your marketing. You can test subject lines, timing of sends, or new product interfaces. This is best used when there is only a single variable in the test. Don't try and compare different sets of product or multiple variables. It becomes unclear what REALLY drove the results in those cases.

One of the biggest mistakes I see in digital marketing is the temptation to measure EVERYTHING and capture data for the sake of data. Too much data can paralyze decision making because it's impossible to know which way the wind is blowing. Understand and focus your goals and the rest will come.

38 views0 comments


bottom of page