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Essential Terms of Performance Marketing that You Should Know!

Imagine a co-worker asking you which verticals you prefer - CPI or CPC. If you don’t know the terminology, it will all be Greek to you. It is natural to be unaware of the terms if you are new to Performance Marketing. So first, we understand the concept; then, we know the terms.

Performance Marketing refers to any online marketing using an internet-connected device or digital/online tool. Understanding the terminologies before diving into performance marketing practices helps understand goals and use tools that drive all efforts towards that goal.



(Source: Tenor)


Here are a few terms to assist you in navigating the world of performance marketing -

  • A/B testing - Or split testing compares two versions of an email, web page, or application to determine which achieves a specific goal better.


  • Click Through Rate (CTR) - This metric allows you to understand your customers better and fine tune your target audience. It measures the percentage of users who click on links in emails, ads, websites, etc.


  • Cost per Acquisition/Action (CPA) - It is a pricing model that charges only when leads, sales, or conversions are generated. It is a financial metric that measures the cost of acquiring a paying customer; it helps marketers determine how much to charge for leads.

  • Cost per Click (CPC) - It charges marketers depending on how frequently users click on display ads placed on their websites to generate traffic to websites.


  • Cost per Engagement (CPE) - It is a payment model that pays commissions to users who engage with content, products, or apps. An example would be when a user downloads a mobile app and uses it for the first time.


  • Cost per Thousand (CPM) - It is an online ad pricing model that measures cost per thousand impressions - an ‘impression’ is any time an ad appears on a web page - which is ideal for delivering a direct message to high-traffic sites.


  • Go-to-Market strategy (GTM) - Specifies how to reach customers with a product's unique value proposition. It ensures product-market fit before launching a product.

  • Hyper-personalisation marketing - Identifies goals and requirements, investigates each behavior, and builds customised interactions using AI, data, analytics, automation, and machine learning.


  • Pay-per-click (PPC) - The advertising technique pays the publisher when an ad is clicked, thereby driving traffic to the publisher's website.

  • Search engine optimisation (SEO) - It boosts and modifies your website to appear more frequently when users search for certain terms. For instance, information about goods or services you sell or on subjects you have deep expertise in.

  • Website visitor tracking - Gathering information on website users' activity, including clicks, page views, and other interactions.


  • Engagement rate - The overall number of interactions a piece of content receives compared to the total number of followers on a social media outlet.


  • Key performance indicators (KPIs) - These are the metrics you may use to track the success of your campaigns.


  • Opt-in rate - It denotes the overall percentage of site visitors interested in joining your email list.


  • Return on Investment - It is a performance metric that assesses a brand’s profitability and compares other investments' efficiency.


  • View-through - It's the acquisition of visitors by marketers after seeing their advertisement.


While knowing performance marketing keywords is useful, understanding their "why" is more important. When using A/B testing, for example, you compare two or more versions of a web page to see which converts better. Similarly, ROI, CPC, and PPC can help you calculate profitability. Therefore, business and marketing must use consistent and up-to-date terminology since it enhances communication, improves productivity, and ensures that the goals are met.


Feel like you could do with some more information about Performance Marketing? Click here to fulfill that wish!

And to get a team of experts to help you with your own PM strategies, contact us here.




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