Your Digital Advertising Acronyms Cheat Sheet
Become an Expert With These 10 Digital Advertising Acronyms
When I entered the digital advertising world a little over a year and a half ago without any prior experience or educational background in the field, I never expected that one of the largest challenges I would face would be getting the hang of the digital advertising acronyms. DSP, DMP, CPM, CPA, CTR... what do they all mean? Understanding these acronyms will help you communicate better with digital vendors and allow you to ask the right questions. Luckily, we’re here to help. Below is a list of digital advertising acronyms we see most often to help set you on the right path to becoming a digital advertising expert.
DSP: Demand-side platform. A demand-side platform is software that allows the purchase of digital advertising inventory across multiple exchanges using real-time bidding (RTB). This helps automate the buying process so you don’t have to go through the traditional method of contacting different publishers. It also places the focus on targeting the right people, wherever they are online.
DMP: Data management platform. A data management platform is exactly as it sounds—a tool to manage data used in digital advertising. A DMP will store your data and sort it in a way that is useful for your targeting needs. A DMP can work with a DSP to use your data to target your buying.
DMA: Designated market area. Traditionally, a designated market area refers to the TV media market in a specific geographic area. These are designated and annually updated by the Nielsen Company. Though originally created for TV advertising, DMAs are also used for digital advertising. So if you would like to run a campaign citywide in, let’s say, Detroit, and you see a proposal from your digital advertising firm that says your ads will be targeted to the Detroit DMA, you can rest assured your ads will be going to the right place.
ROAS: Return on advertising spend. Return on advertising spend helps you measure the overall success of your campaign in a financial sense. For many political and advocacy campaigns, this will not be a digital advertising acronym you hear very often, because the goal is generally not to generate revenue. However, you may still run into this acronym in the digital advertising world, so it’s helpful to know what it means. ROAS is calculated by dividing the revenue generated from a digital campaign by the amount spent on the campaign.
KPI: Key performance indicator. A key performance indicator refers to the key metrics that will be used to measure the success of a digital campaign. Before you launch any digital campaign, it is best practice to define which KPI you will be focusing on and what your goal is for that KPI so that you can accurately measure your campaign’s performance once it’s live. The digital advertising acronyms that we list out next—CPM, CPA, CTR, VCR—are all examples of KPIs.
CPM: Cost per mille (cost per thousand impressions). CPM refers to the pricing structure many vendors use to sell digital media. Under this pricing structure, advertisers pay each time an ad is displayed (which each instance known as an impression). Since many ad campaigns can include multi-million impressions, the pricing used is calculated by the thousand-impression increment to simplify it.
CPA: Cost per acquisition. Cost per acquisition is another pricing structure where you pay per name acquired. Usually this is used in an email acquisition campaign when you are looking to increase the number of supporters on your list. Using a CPA pricing structure can be extremely beneficial down the line because you can use it to see what the ROI (return on investment) has been for your supporters.
CTR: Click-through rate. Click-through rate is a metric used to show how many clicks your digital ads garnered. When it comes to digital advertising acronyms, this is one that you will likely see in reports and hear talked about very often as a measure of success of a political digital campaign. CTR is calculated by taking the number of clicks and dividing them by the number of impressions. This shows the rate at which people who were served ads were clicking on them. Depending on the goals of your campaign, this metric can be extremely useful or just a good piece of information to have.
CPC: Cost per click. Cost per click is a metric to show how much you are paying for each click your ads receive. CPC is another way to measure success through clicks. It is calculated by dividing the amount of money you have spent on a digital campaign by the number of clicks you have received.
VCR: Video completion rate. Video completion rate is a metric that is used to show how many times your video ad has been played to completion. It is calculated by taking the number of times the video has been played to completion and dividing this by the number of impressions served. VCR shows the rate at which people who were served your ads were actually seeing them through. By nature, video completion rate varies significantly depending on the length of the video. For example, 6-second videos, of course, will have much higher VCRs than 30-second videos. For this reason, it’s important to use different benchmarks for each video length.
TL;DR: Too long; didn’t read. In case you made it this far, here’s a bonus acronym for you!
Have more questions about what your political campaign should be doing digitally? Are there other digital advertising acronyms you use or would like to know more about? Comment or click the button below to email us!