20 Key Digital Marketing Terms You Should Know
Digital Marketing is a growing field which is filled with terms, acronyms, glossaries, and jargons. If you are new to the digital marketing industry, understanding the complex digital marketing terminology and jargons that rules the industry can be complicated. Here, we've gathered a comprehensive list of digital marketing terms to know in this emerging industry.
1. Churn rate
Churn rate is a measurement used to calculate customer retention and is significant for recurring revenue companies. It helps companies identify how many customers they lose in a given time period.
To calculate churn rate, you divide the number of customers lost during a time period by the number of customers you had at the beginning of the time period.
2. ClickThrough Rate (CTR)
Click-through rate (CTR) is the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement. It is commonly used to measure the success of an online advertising campaign for a particular website as well as the effectiveness of email campaigns.[
A CMS (content management system) is a software that allows marketers to create, design, host, edit, manage and track the performance of all of their website content.
4. Cost per lead (CPL)
Cost per lead refers to the amount spent on acquiring a lead. This cost is factored heavily into CAC. The most common use case for cost per lead can be found in paid advertising where there is a direct correlation between the amount of money you are spending in something like Google Ads, and the number of leads you are generating from that spend.
The main feature associated with CRM software is its ability to hold contact information, such as names, phone numbers, emails and other records related to a given contact. It can associate individual contacts with their companies so salespeople can track their interactions with every stakeholder.
6. Customer acquisition
Customer acquisition refers to all of the steps, processes and resources involved in attracting a first-time customer to your business.
Brand awareness, lead generation, product marketing, nurturing and sales strategies all fall under the umbrella of customer acquisition — but the concept of customer acquisition stops as soon as your prospects officially close as a customer.
7. Customer acquisition cost (CAC)
Customer acquisition cost is exactly what it sounds like — the cost associated with turning a lead into a customer. CAC is typically expressed as the ratio:
8. Customer lifetime value (CLV)
Customer lifetime value (CLV or often CLTV), or life-time value (LTV) is a prognostication of the net profit contributed to the whole future relationship with a customer. Customer lifetime value can also be defined as the monetary value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship. CLV encourages firms to shift their focus from quarterly profits to the long-term health of their customer relationships. It’s also an important metric because it represents an upper limit on spending to acquire new customers. For this reason it is an important element in calculating payback of advertising spent in marketing mix modeling.
9. Engagement Rate
A measurement of likes, shares, comments or other interaction a particular piece of content receives.
A digital marketing funnel describes the steps that users take to move from being a prospect to a customer. While there are multiple marketing funnels, most include stages focused on awareness, consideration, purchase, and retention.
Top of the funnel (ToFu)
Even though the flywheel has arrived, the funnel still represents how you turn prospects into customers. The top of the funnel refers to the first stages of the buying process. During this stage, buyers are becoming aware that they have an issue and are looking for more information. Whether it's subscribing to a blog or watching a video, you want to have helpful content that prompts visitors to take the desired next steps.
Middle of the funnel (MoFu)
The middle of the funnel represents the middle stage of the buying process. Buyers have identified that they have a problem and are continuing to do more research; however, now they are looking at content, such as a case study, that brings your business in as a solution to the problem they are trying to solve.
This is also where responsibility for leads is typically transferred from marketing to sales.
Bottom of the funnel (BoFu)
The bottom of the funnel represents the last stage of the buying process. This is when the buyer has identified a problem, researched possible solutions and is getting ready to buy. At this stage, buyers are typically requesting either a free demo or consultation & beginning a conversation with a sales rep.
11. Growth marketing
Growth Marketing is the process of designing and conducting experiments to optimize and improve the results of a target area. If you have a certain metric you want to increase, growth marketing is a method you can utilize to achieve that.
Growth marketing can be applied across your business to areas referenced within the acronym AAARRR (sometimes referred to as pirate metrics) which stands for Awareness, Acquisition, Activation, Revenue, Retention and Referral. By improving these categories of metrics, you can grow over time.
A keyword phrase, written without spaces, with a # in front of it.
It allows you and your audience to interact and converse about specific topics on social media.
13. Ideal Customer Profile (ICP)
The type of customer who meets all the criteria you’re looking for in a prospect. In other words, your perfect client.
14. Inbound Marketing
Advertising your company via content marketing, podcasts, video, eBooks, email broadcast, SEO, Social Marketing, etc., rather than paid advertising.
15. Key performance indicator (KPI)
Key Performance Indicators are used to track progress towards marketing goals. By setting the right KPIs for your business, you can continuously evaluate performance and make adjustments to optimize your marketing strategy.
Leading performance indicators (LPIs) and tactical performance indicators (TPIs) can help you understand which specific efforts are propelling you toward your goals.
16. Marketing automation
In a nutshell, marketing automation refers to software that is designed to automate your marketing tasks. It's centered around nurturing leads through the buying process by leveraging targeted content that addresses your prospect's needs when they want it. Basically, you're sending them information based on their behavior which is much more powerful than just blasting out emails to everyone.
Overall, marketing automation software allows marketers to streamline various tasks, boost their overall efficiency, draw key insights and drive ROI.
17. Net Promoter Score (NPS)
The Net Promoter Score measures how likely someone would be to recommend your company to others on a 1–10 scale. Using this customer satisfaction metric, you can easily identify how loyal your customers are and divide them into three categories: promoters (9+), passives (7–8), and detractors (0–6).
Checking your NPS regularly allows you to identify ways to improve your product or service. NPS and “Net Promoter Score” are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.
This term can refer to introducing a new customer or client to your services or products, or it’s used to describe assimilating a new employee into your organization.
19. Pay Per Click (PPC)
A method of advertising on the internet where you only pay when someone “clicks” on your ad.
20. Target Marketing Audience
A group of customers toward which a business has decided to aim its marketing efforts and merchandise.
Bonus term #21 - SEO (Special thanks to Yaakov who insisted on including the term in this guide)
Search engine optimization (SEO) is the process of improving the quality and quantity of website traffic to a website or a web page from search engines. SEO targets unpaid traffic (known as "natural" or "organic" results) rather than direct traffic or paid traffic. Unpaid traffic may originate from different kinds of searches, including image search, video search, academic search, news search, and more.