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What Are the Most Important Online Advertising Terms?

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  • Written By: Jeremy Laukkonen
  • Edited By: Andrew Jones
  • Last Modified Date: 01 September 2016
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Online advertising is a field that is constantly evolving to keep up with technological advances, so new terms and buzzwords are created on an almost daily basis. Some of these online advertising terms are more important than others, and there are a few basic terms that any online advertiser absolutely must be familiar with. The most important online advertising terms deal with the way ads are paid for, such as cost per click (CPC), cost per mille (CPM), and cost per action (CPA). Other terms deal with the way ads are laid out on the internet, such as the phrase "above the fold" referring to the area of a website that is viewable without any vertical scrolling. Another very important online advertising term is reach, since it deals with the actual number of people likely to be exposed to an advertisement.

There are a number of basic industry related terms that are necessary in order to understand anything else. One of these basic terms is "unique user," which refers to a computer that has been identified by an Internet protocol (IP) address, cookie, or other means, so that repeated visits from the same person are not counted multiple times. Each time a unique user visits a site and views an ad, that is typically referred to as an impression. When a graphical ad is used, and the ad links to an external website, that is usually called a banner.

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Many of the most important online advertising terms deal with the way that ads are paid for. In most cases, the least expensive type of online advertising is CPM. This type of advertising involves paying a fee based on how many unique users view a banner ad, which is similar to most types of offline advertising. The term CPC refers to a type of advertising where payments are made based on how many times an ad is actually clicked, and CPA usually requires unique users to fill out a form that provides the advertiser with a lead.

Other important online advertising terms deal how many people are likely to view an ad. Traffic is one of the most important terms to understand in this context, since it indicates how many unique users visit a site in a given period of time. Reach is a term that is based on traffic, since it refers to how many people are likely to view an ad. If an ad is likely to have a great deal of reach, it will be viewed by a lot of people, and may be quite expensive.

Two online advertising terms that deal with the way ads are displayed are rotation and exclusivity. Banner rotation is a term that indicates an advertising banner will be switched with other banners, so that each unique user of a site will have a slightly different advertising experience. Exclusivity indicates that a site will only run banners from one advertiser, though that is typically more expensive. A related term is threading, which is a technique sites can use to ensure that each unique user is presented with a unified advertising experience based on his own activity as he navigates the site.

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