Agency jargon confusing? With so many terms floating around, how are you supposed to know which ones to pay attention to? Let’s look at exactly what these things mean.
Impressions - 1 impression is when 1 ad is shown.
Frequency - The number of times and how often the ad is shown.
Reach - Reach is similar to impressions except if 1 person sees an ad 3 times, this still qualifies as 1 in reach, where in impressions, if 1 person sees an ad 3 times, this will qualify as 3 in impressions. Reach refers to the number of people, whereas impressions are the number of times an ad appeared online.
CPA/CPC - Cost Per Acquisition / Cost Per Conversion - This is one of our most important metrics. We focus on this metric because this is what matters to you. This is the cost to reach the main goal for 1 person. If it is a purchase, then it’s what you pay per purchase. How to calculate: (Number of Conversions/Amount Spent
ATC - Add to Cart - When a customer ads anything to their cart.
CPATC - Cost Per Add To Cart - This is what it costs you to get one person to add an item to their shopping cart. This is a key optimization and performance indicator for our first-touch tactics. This group of users who add items to their carts but don’t purchase became the core audience for our second-touch tactics. How to calculate: (Total Add to Carts/Amount Spent)
AOV - Average Order Value - This is the average purchase value of all of your online orders. Expected AOV typically moves in correlation with CPA, so when looking to increase the return on your ad spend, we find ways to increase your AOV. This is where upsell and cross-sell products at the point of sale can have a huge impact to the bottom line. How to calculate: (Total Purchase Value/Total Number of Purchases)
Conversion Rate - The average number of conversions per ad click, shown as a percentage. How to Calculate: (Number of Conversions/Total Number of Ad Clicks)
CPC - Cost Per Click - How much you pay per click, and a method of measuring how much you pay for an ad. How to Calculate: (Total Spend/Total Number of Clicks)
CTR - Click Through Rate - The rate at which your ads are clicked on. It is a percentage. Out of every person that sees your ad, only a small percentage will click through to your website. We aim to get a click through rate of 1% or higher. How to Calculate: (Number of Clicks/Number of Impressions)
CPM - Cost Per 1000 Impressions - This is a fairly antiquated metric that is used primarily for general overviews, and it tells you how much you paid for 1,000 impressions. How to Calculate: (Total Spend/Total Number of ImpressionsX1000)
Average Relevance Score - This is based on a 1-10 score in the Facebook platform. If you have a low number, like a 1-2, it means that your ad barely relates to the audience that you’re targeting and in order for Facebook to continue to show it, you're going to have to pay a premium. Conversely, a high relevance score—somewhere in the 8, 9, or 10 range—increases the likelihood of your ad being served. Relevancy score impacts CPCs, so as relevancy gets better CPCs decrease and as relevancy gets worse CPCs increase.
Please reach out if you have any questions about other terms you’ve come across in the digital world! We’re happy to answer them.