Advertising Glossary: 73 Terms Explained Simply

What is in this advertising glossary?

This advertising glossary explains the words you meet when you buy or sell ads online, in one or two plain sentences each. Terms are grouped by job rather than alphabetically: pricing, performance, targeting, creative, tracking, app monetization, and offerwalls. Where a term has its own full guide, the term links to it.

Pricing terms

• CPM (cost per mille): the price of 1,000 ad impressions, whether or not anyone clicks.
• eCPM (effective CPM): earnings or cost per 1,000 impressions, worked out from whatever the actual pricing model was, so different deals can be compared. eCPM vs RPM explains how it differs from page RPM.
• RPM (revenue per mille): a publisher’s earnings per 1,000 page views or impressions. Page RPM counts page views, so a page with several ads has a higher RPM than eCPM.
• CPC (cost per click): the price of one click on your ad. The pricing model is often called PPC, pay per click.
• CPA (cost per action): the price of one completed action, such as a sign-up or a purchase. Also read as cost per acquisition, and used both as a metric and as a pricing model.
• CPI (cost per install): a CPA where the action is an app install.
• CPL (cost per lead): a CPA where the action is a lead, such as a form with contact details.
• CPE (cost per engagement): the price of one active interaction, such as a like or share on social media, an expanded display ad, or a user reaching a goal inside an app.
• CPS (cost per sale): a CPA where the action is a purchase, common in affiliate marketing.
• CPV (cost per view): the price of one video view, usually counted after a few seconds of watching.
• Pay-per-result: any model where you are charged only when the agreed result happens. CPA, CPI, CPL, and CPS are all pay-per-result.
• Revenue share (revshare): a payout model where the partner receives a percentage of the revenue a referred customer generates, for a set time or for life, instead of a fixed price per action.
• CPA network: a company that connects advertisers who pay per action with publishers who send users, and tracks, checks, and pays for each approved action. Also called an affiliate or performance network.
• Bid: the most you are willing to pay for one impression, click, or result. In auctions it is a ceiling, and the price you actually pay is often lower.
• Daily budget and lifetime budget: the most a campaign may spend in one day, or in total.

To compare the three main models on one scale, read CPM vs CPC vs CPA.

Performance terms

• Impression: one time an ad was shown.
• Reach: the number of different people who saw an ad.
• Frequency: how many times, on average, each person saw it.
• CTR (click-through rate): clicks divided by impressions.
• Conversion: a completed action you care about, such as a sign-up, install, or sale.
• Conversion rate (CR or CVR): conversions divided by clicks or visits.
• EPC (earnings per click): what one click earned on average, used mostly by publishers and affiliates. See eCPM and EPC explained.
• ROAS (return on ad spend): revenue from ads divided by the cost of those ads. A ROAS of 4 means $4 back for every $1 spent.
• ROI (return on investment): profit after all costs, divided by those costs.
• Break-even: the point where revenue from a campaign equals its cost. Break-even ROAS is 1 divided by your profit margin.
• CAC (customer acquisition cost): the total cost of winning one new customer, including more than ad spend. See CAC vs CPA vs LTV.
• LTV (lifetime value): the revenue one customer brings over the whole relationship.
• ARPU (average revenue per user): total revenue divided by the number of users in the same period.
• ARPDAU (average revenue per daily active user): revenue in one day divided by the users active that day, the daily version of ARPU common in mobile games.
• Retention: the share of users who come back after a day, a week, or a month. See app retention benchmarks.
• Churn: the share of customers who stop using or paying for a product in a period.
• KPI (key performance indicator): the number you decided to judge a campaign by.

Targeting and delivery

• Targeting: choosing who can see an ad, for example by country, device, or age.
• Geo-targeting: targeting by location. Worldwide campaigns often set a different price per country.
• Tier 1, 2 and 3 countries: an informal grouping of countries by how much a user there is typically worth to advertisers, from the highest prices in tier 1 to the lowest in tier 3.
• Retargeting: showing ads to people who already visited you.
• Lookalike audience: people who resemble your existing customers, found by a platform’s algorithm.
• Placement: where an ad appears, such as a feed, a search result, a website, or an app.
• Budget cap: a limit on total, daily, or hourly spend.
• Frequency cap: a limit on how often the same person sees an ad or repeats a task.
• Brand safety: keeping ads away from content that could harm your reputation.
• Viewability: whether an ad actually had a chance to be seen. The common standard for display ads is at least 50% of the ad on screen for at least one second.
• Ad fraud: fake impressions, clicks, installs, or sign-ups created by bots or dishonest sources. See Ad fraud and bot traffic.

Creative and landing pages

• Creative: the ad itself, such as an image, a video, or a piece of text.
• Landing page: the page people reach after clicking. It often decides whether a click becomes a result.
• Call to action (CTA): the instruction that tells people what to do next, such as “Sign up free”.
• A/B test: showing two versions to similar audiences and keeping the one that performs better.
• Bounce rate: the share of visitors who leave after seeing only one page.
• Creative fatigue: the drop in results when the same audience has seen an ad too often.

Tracking and measurement

• Pixel: a small script or image on a web page that reports visits and conversions from the user’s browser.
• Postback: a call from one server to another that reports a conversion or a change in its status. The postback URL is the address on the receiving server.
• S2S (server-to-server) tracking: recording conversions through postbacks matched by a click ID, instead of through a pixel and a cookie in the browser.
• Click ID: a unique value the platform creates for each click and passes in the link, so the conversion reported later can be matched to that click.
• Sub ID: a label the traffic sender adds to a link, such as sub1 for the page or campaign, which comes back in reports and postbacks.
• Transaction ID: an ID for one tracked transaction. Many affiliate networks use the name for the click ID. In offerwall postbacks it identifies one conversion and stays the same for every status update, so you store its last status to avoid counting it twice.
• Pending: a conversion that was reported but is still being checked. It is not credited yet and can still be approved or rejected.
• Postback secret (signature hash): a secret key shared between a platform and your server. The platform signs each postback with it, usually with HMAC-SHA256, and your server recalculates the hash to prove the call is genuine.
• Attribution: deciding which ad or channel gets the credit for a conversion.
• Conversion window: how long after a click or view a conversion still counts for that ad. Also called an attribution or lookback window.
• MMP (mobile measurement partner): an independent company that tells app marketers which ad network or campaign brought each install and in-app event.
• GAID and IDFA: resettable device IDs used only for advertising, GAID on Android through Google Play services and IDFA on iPhone and iPad. On iOS 14.5 and later, the IDFA is all zeros unless the user allows tracking.
• UTM parameters: tags added to a link so your own analytics tool can tell which campaign a visit came from.

App and website monetization

• SDK (software development kit): a ready-made package of code you add to your app to get a feature, such as ads, analytics, or payments.
• Ad mediation: software that lets several ad networks compete for each ad request in your app and decides which one serves it.
• Waterfall: a mediation setup that calls ad networks one at a time, in order of their average eCPM, until one returns an ad.
• In-app bidding: a mediation setup where all participating networks bid at the same time in one real-time auction, and the highest bid wins.
• Price floor: the lowest price a publisher will accept for an impression. Higher floors raise prices but lower fill.
• Fill rate: the share of ad requests that were answered with an ad.

Offerwall terms

• Offerwall: a page inside a website, game, or app that lists tasks and offers users can complete for a reward in that site’s own currency.
• Incentivized traffic: users who complete an action because they earn a reward for it.
• Chargeback: in offerwall and affiliate reporting, a conversion that is taken back after it was credited, for example because of fraud. In card payments, the same word means a payment the bank reverses.
• Reversal: another word for an offerwall chargeback. The platform sends a second postback for the same transaction so the publisher can take the reward back.
• Approval window: the time an advertiser has to approve or reject a completion before it is approved automatically.

Frequently asked questions