Advertising has grown in last 10 years and so the terminologies or dictionary in advertising. Let’s know the important or basic ones to start talking advertising.

1. Impressions

This used to be a term more appreciated, which means how many times a user saw your ad or banner or any online advertisement. Each time your ad has been viewed counts as an impression.

2. CTR (Click Through Rate)

How many users that saw your ad have clicked on it too and visited your website or landing page.
The Click Through Rate is calculated as Clicks / Impressions.
Example: Let’s say your ad reached 100 impressions, and 10 users also clicked on the ad, it means your CTR is 10%.

3. Conversion

Once a user saw your ad, clicked on it and visited your website or any landing page and does any action like buying of any product or registers or downloads depending upon the which action has been considered as a conversion for that campaign, a conversion is calculated.

4. Call for Action

It’s the most important for the user to take any action. Call for Action is what drives the users to interact with your campaign. Depending on the goals that the advertiser set for the campaign, the Call for Action may be: Request a quote, download a brochure, sign up for a newsletter, and of course- buy a product or book a room online.

5. CPL ( Cost per Lead) / CPA (Cost per Acquisition)

It’s the cost of spending on clicks/conversion.
Example: Let’s say your ad drew 100 clicks at 100$, and you achieved 10 Conversions, then you CPL / CPA is 10$.

The lower the CPL/CPA value means good is the conversion rate.

6. ROI (Return on Investment)

The best example to understand ROI is :
Let’s say you are promoting your restaurant and the Call for Action is booking an online reservation for dinner. You already know that your profit from every guest is 10$. In that case, if the CPA is 8$, which means you spent 8$ advertising money to get a reservation, then your ROI is positive because you have 2$ profit on every reservation.

7. CPM (Cost per mille)

Commonly used measurement in advertising !!
CPM is also called as CPT i.e cost per thousand, which means we need to pay the cost on every 1000 impressions.
Example: If CPM is $ 5, it means the cost of 1000 impression is $ 5.

8. CPC (Cost per click)

Just like CPM, CPC is also a measurement used in online advertising, the only difference is this cost is based on clicks and not impressions. If any user is shown the Ad but he doesn’t click on it their won’t be any cost effect as the cost is based on clicks only.
Example: If CPC is $ 5, it means every click costs $5 so 20 clicks then it will cost us $100.

* Also, consider a campaign where payment is based on impressions, not clicks. Impressions are sold for $10 CPM with a click-through rate (CTR) of 2%.

1000 impressions x 2% CTR = 20 click-throughs
$10 CPM / 20 click-throughs = $.50 per click.

9. CPA (Cost per acquisition)

It’s another word for cost per action and is used interchangeably with this term. CPA measures the advertiser’s per conversion cost from start to finish, from the inclusion to the search engine results to creating interesting landing pages that grab the attention of the visitor. This means cost per acquisition measures how much it costs in advertising to convert one person from a visitor to a client for the company.

Action can be different for different campaigns, like for some registration is set as a conversion and for some the buying of any product i.e when a user reaches the ‘Thank you page’ or maybe downloading anything from the client’s page.

10. CPE (Cost per Engagement)

A new measure of performance in online advertising. After CPM, CPC, and CPA we have this CPE which has no relation with impression but only with the engagement i.e when any user engages with the brand content.
This measure actually differentiates between quantity and quality.
Engagement can be defined as a user interacting with an ad in any number of ways, including viewing, sharing, voting, commenting, reviewing, playing a game, etc.

CPE campaigns are mainly video campaigns as it initiates used to engage with the creative.

11. CPL (Cost per Lead)

A lead is an initiative in an action.
It is usually a free registration or filling of the form on the creative like mobile number, email Id or name, etc.
Once the user fills the detail, a lead is counted!

12. Ad Dimension

The size of a creative measured in pixels. e.g. 728×90 ; 300×250 ; 160×600 etc.

13. Ad Space

The space on a Web page reserved to display advertising.

14. Banner

An online advertisement in the form of a graphic image that typically runs across the top or bottom of a Web page, in the margin, or other space reserved for ads. i.e the Ad Space on the respective web pages.

15. Pop-Under

A window that launches automatically behind the current browser window. It is a type of advertisement like expandable, video Ads are also the type of advertisement.

16. Pop-Up

A window that launches automatically in front of the current browser window.

17. Affiliates

A type of advertising system based on the CPA payment method whereby websites run advertiser’s banners for free but get paid on any sales or registrations that result from visitors that click on the banner.

18. Agency

An organization that provides a variety of ad services for advertisers, including helping them design creative and locate the best place to run their advertising campaign. Today there is the number of agencies in the market, e.g Dentsu, WPP Group, Havas, IPG Group, etc.

19. Cookies

Cookies are small files that are sent from a web server to the local user’s computer to store information unique to that user. Often used by advertisers to keep track of the number and frequency of advertisements that have been shown to a visitor or by sites to help them determine the number of unique visitors. Cookies can also be used to target  advertising, such as targeting advertising based on an individual’s user profile on a site.

20. Frequency Capping

A term used to describe the number of times the same advertisement is shown to the same visitor during a particular session or time frame. Frequency Capping is a popular method for ensuring that a single user does not see the same ad too often.

21. Geo targeting

Geo targeting is the practice of  targeting ads to web users based on their physical location , e.g. If i want to show to Ad only to US citizen i can target the Geo only to the US so no other user at a different location can see the Ad .

22. Interstitial

An particular type of advertisement that loads between web pages, requiring a user to look at it before getting to the page they meant to go to. It is one of the closest things on the Internet to television commercials.

23. Post Click TrackingPCT

This is used to track if a user performs an action after clicking on a banner, such as completing a registration page or purchasing an item. It is done with the use of a cookie placed in the browser that is read by a tracking pixel on a page (such as an order confirmation page or a “thank you for signing up” page).

24. RON

Run of network (RON) means a banner will run on all the network i.e it has the potential  to appear on any page of any site that is part of an ad network. This type of buy is not targeted to any specific choice, it tends to be the least expensive type of advertisement that can be purchased. Custom targeting is quite costly than RON.

25. Leaderboard

Leaderboard is a standard size of an online banner ( advertisement ) of size (w) 729 x (h) 90 (in pixels).

26. MPU ( Mid page Unit )

MPU (Mid Page Unit) or medium rectangle is a banner (advertisement) size of (w) 300 x (h) 250 (in pixels).

27. Skyscraper

Ad Dimension 120×600. Commonly used on the side of pages.

28. ATF – “Above the fold” of a web page.

29. BTF – “Below the fold” of a web page.

30. Insertion Order

It’s a formal contract binding between both the buyer and seller of inventory.

31. Ad Tags

HTML code produced by your ad server that displays the corresponding creatives.

32. Pacing

Pacing is how fast the purchased impressions are delivered , like if the pacing is AGGRESSIVE , it means the impressions are to be delivered in a fast pace while if the pacing is GOVERNED , it means the impressions are to be delivered in some pattern and also in slow mode.

33. Out-clause

Out-clause is the amount of time you have to cancel an insertion order.

23 thoughts on “Basic Terms in Advertising”

      1. Hi Avinash,

        Yes I have already checked that as well. Thanks !
        Do you have this same info in a printable version or a pdf ?
        Cause I require a hard copy of the same.
        If so could you mail the same to me.

        Thanks for your help in advance.



  2. Hi Avinash,

    I would like to know the differences between PreRoll and interstitial .
    Are they of same kind or different? please explain.


    1. Hi Naveen,
      Interstitial ad is a full page ad which may be a video message or a banner which displays for sometime and disappears or gives you the option to skip.

      Whereas , PreRoll is never a full page ad , usually a video message that pops up in the mid screen , plays for few seconds before you get the desired data.

      Interstitial can be prestitial ad which is a a welcome message that appears before the homepage.

      PreRoll may be MidRoll or Post Roll.

      1. Thank you pavitra for giving the difference between PreRoll and Interstitial!

        But about your comment about PreRoll is Quite Unclear because PreRoll by it’s name it is an ad which plays prior ,can it also be served in the mid (or) in the post? or did you mean PreRoll kind of creatives can be served as Pre/Mid/Post ?

  3. Hi Nishant,

    Thank you for the question, and Pavitra thanks for your quick response.

    Answer to the question – Certainly preroll is different from interstitial though Preroll and interstitial banners are the ones played prior to the actual page that you are going to visit but there is big difference between the concept of creative and way of rendering. Prerolls are generally the ones played above the video(actual) while interstitials are full page banners that shows to the user before he is redirected to the actual landing page. At times you see some skip ad page before you reach to the page you requested, that skip ad page is a kind of interstitial ad. To define interstitial : while pre roll can be defined as

    Pre roll, mid roll and Post roll are three different concept of ads that are displayed above the video.

    Please let me know if you need some more clarification on it.

    Thanks and Regards,

  4. Hi avinash,

    I need to know the html5 creatives and tag generating steps in Google DCM.

    could you please guide to me? Or any links are availed for that??.


  5. Thanks for clearing my doubts. I have clearly understood the basic terms in advertising after reading your article.
    Thank you so much

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