- Understanding advertising terms can help you put together a compelling and cost-effective ad campaign for your small business
- Terms like pay-per-click (PPC) and real-time bidding are used to describe the pricing model of an advertising platform
- Measuring click-through rates (CTR) and conversions will help you track your results and optimize your ad campaign
Learning how to advertise your small business can feel daunting, especially when faced with unfamiliar advertising jargon and acronyms. However, understanding advertising terminology is key to creating great ads and getting your money’s worth out of each campaign.
Some terms are unique to online advertising while others apply to traditional advertising campaigns. Many of these advertising terms overlap with marketing terminology, but advertising is just one part of your overall marketing strategy.
Discover 50 must-know advertising terms, organized by category, so you can easily get up to speed on the latest advertising jargon and maximize your next campaign.
Types of advertising
Traditional advertising refers to ad formats such as billboards and newspaper ads while digital advertising refers to ads that appear online. Here are some key advertising terms you’ll need to know to distinguish between different types of ads.
1. Display advertising
Display ads are digital ads that are shown to users as they browse the internet, either on individual web pages or on platforms like social media and search engines. These ads can include image, text, and video content; they appear in specific places on the web page, such as at the top of the page or in the sidebar.
2. Banner ad
Banner ads are a form of display ad that usually has a rectangular format and sits at the top or bottom of a web page (much like a banner). The purpose of a banner ad is to encourage users to click on the ad so that they’re taken to another website or landing page.
3. Pop-up ad
Pop-up ads are display ads that appear in a separate browser window or overlay above the page that a user is currently viewing. Pop-up ads can be designed to pop up after a specific time period or when the user takes an action, such as leaving the web page.
4. Carousel ad
Carousel ads are display ads with multiple panels or images that allow advertisers to fit several advertising messages into a single ad. For example, an e-commerce store might create carousel ads to show off multiple products. Carousel ads get their name because they rotate automatically or allow viewers to swipe through them on mobile devices.
5. Native ad
Native ads are made to resemble content that ordinarily appears on a website, such as a blog post, news article, or social media post. Native ads should be clearly identified as “sponsored content” to comply with advertising regulations.
6. Ad network
An ad network is a third party that facilitates the purchase and placement of ads across multiple websites within its network. This allows advertisers to place an ad on multiple websites at once without buying ad space from individual publishers.
7. Interstitial ad
An interstitial ad is a full-screen advertisement that appears at a transition point in the user experience, such as between the levels of a game. Interstitial ads are commonly used in mobile apps but must comply with app store guidelines to avoid penalties.
8. Programmatic advertising
Programmatic advertising uses automation to determine when and where ads appear to show more timely and relevant ads to consumers. This usually happens in real time through an ad exchange or demand-side platform (DSP). These ads include image and video ads that appear on mobile devices, smart TVs, streaming platforms, and more.
9. Rich media
Rich media refers to ads that feature more engaging audio or video content than static display ads, often with more animations and interactive features. One study by FreakOut involving Nissan and Hyundai ads found that rich media was “50% more successful in generating interest among users to make a purchase” than banner ads.
10. Out-of-home advertising
Out-of-home advertising (OOH) is a traditional advertising method designed to reach potential customers in public spaces outside their homes. In addition to static billboards, this includes digital out-of-home advertising (DOOH), such as electronic displays at shopping centers and bus stops.
How do you know if an ad campaign is working? By measuring it. From pricing models to click-through rates, here are the advertising terms to help you track your ad metrics and get the best return on your investment.
11. Ad impression
Ad impressions are the number of times an ad is shown to a user. It doesn’t mean your ad has actually been viewed or clicked on—it simply means that it has appeared on the web page. Impressions are an important factor in determining your click-through rate since successful ads get more clicks as a percentage of total impressions.
12. Click-through rate (CTR)
An ad’s click-through rate (CTR) is determined by dividing the number of times it was clicked on by the number of impressions. An ad with 1,000 impressions and 10 clicks has a CTR of 0.1% percent. The more compelling your ad is, the higher the CTR.
13. Conversion rate
An ad’s conversion rate is the number of people who have taken a specific action after viewing it. If your ad’s goal is to make a sale or encourage users to sign up for a free trial, then you’d determine your conversion rate by dividing the number of users who took that action by the total number of people who clicked on your ad.
14. Pay-per-click (PPC)
Pay-per-click (PPC) advertising is a pricing model in which advertisers pay for an ad based on the number of clicks it gets rather than a flat fee for each ad. Social media sites, search engines, online business platforms, and display networks typically use pay-per-click advertising as their primary pricing model.
15. Cost-per-click (CPC)
Cost-per-click (CPC) is a method used for calculating the cost of a PPC ad on a specific advertising platform. Ads in certain industries or geographic locations, or for in-demand keywords, have a higher cost per click than ads with less competition. Display ads can cost anywhere from a few pennies to several dollars per click.
16. Cost-per-mille (CPM)
Cost-per-mille (CPM) means cost per thousand impressions and is another method for calculating the cost of a PPC ad. Instead of only paying when someone clicks on your ad, you’ll pay a predetermined rate for every 1,000 times your ad is shown to users.
17. Real-time bidding (RTB)
Real-time bidding (RTB) is a method used to calculate the cost of ad impressions for certain programmatic ad campaigns. Advertisers “bid” on ad space in a real-time ad auction to determine which ads will be shown to users.
18. Ad spend
Ad spend is the total amount of money you spend on an ad campaign. Most ad platforms allow you to set a daily ad spend so you can predict the maximum amount you’ll spend each day. For example, with Yelp Ads, your daily ad spend can be as low as $5 per day on average and you can adjust your ad spend at any time.
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19. Cost-per-acquisition (CPA)
Your cost-per-acquisition (CPA) refers to the percentage of your ad spend to acquire each new customer. If your total ad spend is $1,000 over the course of an ad campaign and you get 100 new customers, then your CPA is $10 per customer.
20. Return on investment (ROI)
Return on investment (ROI) is a way of determining the effectiveness of a marketing campaign by comparing the ratio of revenue to expenses. A campaign that costs $1,000 and generates $2,000 has an ROI of 2:1. ROI usually refers to your overall marketing efforts while return on ad spend (ROAS) refers to a specific ad campaign.
21. Key performance indicator (KPI)
Key performance indicators (KPIs) are used in various settings, from sales to HR. In the case of digital marketing or advertising, your KPIs are the specific metrics you’ll be using to measure the success of your ad campaign.
22. Lifetime value (LTV)
Lifetime value (LTV) refers to the total profit you can expect to generate from each customer relationship over time. Understanding your LTV will help you determine whether to spend more on customer acquisition or customer retention.
Digital advertising terms for design and optimization
Before you launch your first ad campaign, get familiar with advertising jargon related to design and optimization. This will ensure your digital ad looks professional, has a compelling call-to-action, and reaches the right target audience.
23. Ad placement
Ad placement is where an ad appears on an advertising channel and can significantly impact engagement. For example, “above the fold” ads appear at the top of a web page and don’t require readers to scroll down the page. The phrase comes from newspaper advertising, in which ad spaces are distinguished by a literal fold.
24. Ad copy
This is the text of an ad, including the headline, tagline, and call-to-action. When writing ad copy, keep it short and concise to avoid overwhelming the viewer with too much information or exceeding any character limitations on your ad platform.
25. Call-to-action (CTA)
The call-to-action (CTA) is a specific request or invitation to the viewer. “Sign up now,” “Get your free gift,” or “Learn more,” are all common examples of a call to action. In most cases, the CTA comes at the end of the ad in the form of a clickable link.
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26. Landing page
A landing page is a page on your website that the ad link directs to. Linking to a landing page helps keep the customer focused on your CTA and moves them closer to a sale. For example, if your ad is for a particular product, you can link to the sales page for that specific product rather than to your website homepage.
27. A/B testing
A/B testing is the process of trying out multiple versions of an ad to see which one is most effective. For instance, you can test which image, headline, or CTA gets the highest click-through rate. To ensure accurate results, only change one ad element at a time.
Keywords are the terms that potential customers are looking for on search engines or social media—and they’re used to determine where your ad is placed. Popular keywords have a higher cost-per-click so create a keyword strategy to make use of long-tail keywords and less competitive search terms.
29. Target audience
Your target audience, also known as a target market, is the specific category of customers that you intend to market to. Perform market research to develop buyer personas and identify likely customers.
Demographics include characteristics like age, gender, educational level, and income. Some ad platforms allow you to market to specific groups via demographic targeting.
Retargeting is the practice of delivering ads to potential customers who have already interacted with your business in some way—usually with the help of third-party tracking pixels.
Remarketing is similar to retargeting, but it relies on first-party data instead, such as following up about items in an abandoned shopping cart.
Geotargeting delivers ads to users in a specific location, usually based on their IP address or GPS location. For example, with Yelp Ads, you can use location targeting to advertise your local business within a specific area.
34. Ad blocker
This is a piece of software, such as a browser plug-in, that prevents pop-ups and other ads from appearing on a user’s device. It works by identifying the ad server that ads are coming from and preventing the ad from being downloaded.
Digital marketing terms
Advertising is just one element of your overall marketing strategy so it’s worth brushing up on some additional terms related to digital marketing. Understanding these terms will help you build brand awareness, generate leads, and grow your online reputation.
35. Search engine optimization (SEO)
Search engine optimization (SEO) refers to using keywords and phrases that people are searching for throughout your website so it’s more likely to appear higher up on search engine results pages (SERPs).
36. Search engine marketing (SEM)
Search engine marketing (SEM) refers to paying for ads that appear on the same page as organic (free) search results. These are usually pay-per-click ads that can cost anywhere from a few cents to several dollars per click, depending on the keyword.
37. Email marketing
Email marketing is contacting existing or potential customers from your email list. This type of marketing usually takes the form of a drip campaign, newsletter, or announcement of sales or special offers. By using an HTML email builder, such as Mailchimp, you can ensure your emails show up properly on a wide range of devices.
Spam refers to unsolicited emails that the recipient hasn’t agreed to receive. These are often delivered in bulk and run afoul of the CAN-SPAM Act and other applicable laws.
Opt-in and opt-out are ways that internet users can agree to receive emails and other marketing materials or withdraw their consent. A user may opt-in by providing their email address to receive a newsletter subscription and opt-out by clicking on the “unsubscribe” link at the bottom of the email.
40. Lead magnet
A lead magnet refers to any free piece of content (sometimes called a “freebie”) that users get in exchange for sharing their email address or other contact information. Lead magnets include e-books, checklists, infographics, coupons, and other useful resources.
41. List segmentation
Segmenting your email list based on demographics or user behavior is called list segmentation. For example, you might send a different newsletter to customers who have already purchased a product or service versus those who haven’t. Other ways to segment a list are by age, gender, or geographic location.
42. Inbound marketing
Inbound lead generation is a marketing method that aims to bring customers to you, either by providing useful information or building brand awareness. Creating an email newsletter, hosting a webinar, and maintaining a Yelp Business Page are all ways to inform customers about your business. More than 80 million people visit Yelp each month looking for businesses of all types—and are ready to make a purchase.
43. Outbound marketing
Outbound marketing, including outbound lead generation, refers to most types of online advertising and other forms of outreach, such as cold calling and direct mail. Although you have more control over outbound marketing, it can take more time and effort to convert potential customers since they aren’t as far along on the customer journey.
44. B2B marketing
Business-to-business (B2B) marketing involves promoting your products or services to other companies instead of consumers. Because B2B customers are on a different buyer’s journey than individuals, follow these B2B marketing strategies for the business-to-business market.
45. Lead nurturing
Lead nurturing is nudging a potential customer toward a sale over time. Customers new to your brand may not be ready to buy and need time to get familiar with your brand or learn more about your company. Lead nurturing can take the form of an email drip campaign, retargeting, or even a sales call.
46. Evergreen content
Evergreen content refers to marketing materials that remain relevant over time. A free e-book about local concerts in 2023 will quickly become out-of-date, but a blog post about the history of your city or region will stay relevant for years. It can also boost your SEO or give customers a reason to return to your site.
Influencers are social media users with a large online following who partner with businesses to promote their products or services. You don’t need to work with the most high-profile folks to have an impact: Micro-influencers with 1,000–10,000 followers can be just as effective and help your business reach a niche market.
48. Brand assets
Brand assets include your slogan, logo, and other marketing materials that identify your brand and help you stand out. By developing brand elements and putting them together into a neat package, you can roll out ad campaigns more quickly since you won’t have to start from scratch each time.
49. Style guide
A style guide is a written resource to ensure you maintain a consistent brand identity across all your advertising campaigns. It includes your color palette, typography, and even the tone of voice that you use in your ad copy. A style guide contains these instructions so your copywriter, graphic designer, and other contractors are on the same page.
50. Ad proof
A proof is a mock-up of an advertisement that you can run by all of your stakeholders for final approval. You can use online tools to comment and request changes before the ad goes live. Take the opportunity to proofread and fact-check your ad, and ensure it has all appropriate citations and attributions.
Learn the language of advertising and launch your next ad campaign
Advertising jargon can be complex, but you don’t have to be an advertising professional or have an entire marketing team to launch your own advertising campaign. As a small business owner, you can use self-service advertising to create and run your own PPC ad campaigns.
Once you understand the latest advertising terminology, you can track your ad campaigns, measure their ROI, and communicate with third-party professionals like copywriters, graphic designers, and social media managers.
To reach even more customers, try these 10 marketing ideas for a new business that can generate brand awareness on any budget.
The information above is provided for educational and informational purposes only. It is not intended to be a substitute for professional advice and may not be suitable for your circumstances. Unless stated otherwise, references to third-party links, services, or products do not constitute endorsement by Yelp.