Important Concepts Quick Reference Guide

Important Concepts Quick Reference Guide

This guide includes commonly used professional terms and important concepts in advertising systems to help you quickly understand and reference.

Core Concepts

CTR (Click-Through Rate)

• Definition: The number of times an ad is clicked divided by the number of times it is displayed
• Formula: CTR = (Clicks / Impressions) × 100%
• Purpose: Measure ad appeal and relevance

CPC (Cost Per Click)

• Definition: The amount an advertiser pays for each click
• Formula: CPC = Total Cost / Number of Clicks
• Purpose: Evaluate ad placement costs

CPM (Cost Per Mille)

• Definition: The amount an advertiser pays for every 1,000 impressions
• Formula: CPM = (Total Cost / Impressions) × 1,000
• Purpose: Evaluate ad display costs

ROI (Return on Investment)

• Definition: The ratio of returns to costs from advertising investment
• Formula: ROI = (Revenue - Cost) / Cost × 100%
• Purpose: Evaluate ad placement effectiveness

Ad Types

Display Ads

• Ads displayed in image, text, or video format
• Typically appear on websites, apps, and other media platforms

Search Ads

• Ads displayed on search results pages
• Usually related to user search keywords

Native Ads

• Ads that match the format of media content
• Blend into user experience and are less recognizable as ads

Placement Strategies

Targeting

• Precisely deliver ads based on user characteristics, interests, behaviors, etc.
• Improve ad relevance and conversion rates

Bidding Strategy

• Advertisers set bidding methods to obtain ad display opportunities
• Common strategies: CPC, CPM, CPA, etc.

More Concepts

This guide will be continuously updated with more important concepts and terms in advertising systems.