Marketing glossary: 7 essential terms every business owner should know

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We've written about the importance of alignment between your sales and marketing teams and strong communication between your team and an outside marketing agency.

Well, communication starts with speaking a common language. In that light we offer 10 marketing terms- courtesy of the Common Language Marketing Dictionary-that you might not know but should:

A/B testing.
At its simplest, is randomly showing a respondent one version of a design or page — version A or version B — and tracking the changes in behavior based on which version they saw. Version A is normally your existing design ("control" in statistics lingo); and version B is the "test," with one copy or design element changed. In a "50/50 A/B split test," you are randomly selecting which version of a design to show.

A classic example would be comparing conversions resulting from serving either version (A) or (B), where the versions display different headlines. A/B tests are commonly applied to many forms of copy testing (including digital tests for clicked-on ad copy and landing page copy) to determine which version drives the more desired result.

Illumine8 Note: This applies to testing email subject lines as well for email lists with robust, statistically significant numbers.

Brand Equity.
The purpose of brand equity metrics is to measure the value of a brand. A brand encompasses the name, logo, image, and perceptions that identify a product, service, or provider in the minds of customers. It takes shape in advertising, packaging, and other marketing communications, and becomes a focus of the relationship with consumers.

In time, a brand comes to embody a promise about the goods it identifies—a promise about quality, performance, or other dimensions of value, which can influence consumers' choices among competing products.

When consumers trust a brand and find it relevant, they may select the offerings associated with that brand over those of competitors, even at a premium price. When a brand's promise extends beyond a particular product, its owner may leverage it to enter new markets. For all these reasons, a brand can hold tremendous value, which is known as brand equity.

Cost per click or CPC.
An internet advertising metric which can be defined simply as “the amount spent to get an advertisement clicked."[1] Cost per click is used as a billing mechanism in the pay per click advertising model.

Cost per click, along with cost per impression and cost per order, are used to assess the cost effectiveness of internet marketing. Cost per click has a big advantage over cost per impression in that it tells us something about how effective the advertising was.

Clicks are a way to measure attention and interest. Inexpensive ads that few people click on will have a low cost per impression and a high cost per click. If the main purpose of an ad is to generate a click, then cost per click is the preferred metric. Once a certain number of web impressions are achieved, the quality and placement of the advertisement will affect clickthrough rates and the resulting cost per click.

Brand differentiation is when the key messaging:

  • Serves to differentiate the brand from the competition in a way that is demonstrated or proven
  • Makes a claim that only the advertised brand can make (that is, the message expresses a "point-of-difference" for the brand)
  • Is unique in that it emphasizes some new aspect of the product.

Geo targeting involves the delivery of digital ads specific to the geographic location of the searcher. Geo-targeting allows the advertiser to specify where ads will or won't be shown based on the searcher's location, enabling more localized and personalized results.

Long Tail Keywords are search terms that are very specific, long phrases that include one or more modifiers, such as "cheapest helicopter skiing near Banff BC." These longer, more specific terms are called "tail terms" based on a bell-curve distribution of keyword usage that displays the low numbers of little-used terms at the "tail" end of the bell curve graph.

Although long, specific, and lesser-used tail terms have low CTRs, they are less competitive (and therefore cheaper) and often catch buyers at the end of the purchase decision process. This means that, even with low click-through numbers, tail terms can have good conversion rates.

Micro segmentation is an approach to market segmentation in which a business' customers are grouped into segments based on their geography, demographics, lifestyle, and behavior. This allows the marketer to target each group (or even individuals) based on their specific wants and needs. For more information, see Wikipedia entry on microsegment.

We hope these terms help you better align your marketing and sales teams and build rapport between your internal teams and your partner marketing agency.

If you're looking for a marketing partner, we'd love to hear from you and learn more about your challenges. Contact us.

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