By Marketing Brew Staff
less than 3 min read
Definition:
Short for key performance indicators, this is one of marketers’ favorite initialisms. In marketing, KPIs often refer to measuring the performance of a campaign. Some common KPIs include generating product sales, increasing brand awareness, and improving sentiment or public opinion of a company.
One of the most common marketing KPIs is ROI, which stands for return on investment. Put simply, ROI is the measure of how much money a brand spends on a campaign and how much money it makes as a result.
ROAS stands for return on ad spend. It means almost the same thing as ROI, but is specific to the dollars spent on the media buy for a campaign, as opposed to the total cost of the campaign, which can include other expenses, like talent and production.
CAC is the abbreviation for customer acquisition cost, a measure of the money a brand spends to gain new customers. CAC can include expenses outside of marketing, but common costs in marketing include money spent on paid ads, software services, and agency fees. Keeping CAC low can help boost ROI.
Now for the fun stuff: pricing models. Ad buyers and sellers often talk in terms of CPMs and CPCs, two different ways to price online ads. CPM stands for cost per mille, or the price advertisers pay for every 1,000 impressions. It doesn’t guarantee those people seeing the ad will actually click on it, so it’s more commonly associated with brand awareness campaigns than bottom-funnel or purchase-oriented campaigns.
CPC, on the other hand, refers to the cost per click, meaning that the advertiser pays based on the number of people who actually engage with their content, not just those who see it.
