Understanding Key E-Business Terms

By David Bell
Posted Saturday, November 6, 2004

Whether you're operating your own online business, wanting to start one, running affiliate programs, or wanting to advertise in e-zines - or sell advertising in your own e-zine or on your web site, it's important to know and understand the relevant terms used in e-business today.

Hits:

You see this term everywhere, and often, it is misunderstood and misused. Each hit to a web site doesn't necessarily represent one visitor. Generally, hits refer to not only the web page itself, but all files requested, including all graphics. Therefore, if a page has 25 graphics, each visitor to that page represents 26 hits - one hit for the page and 25 for the graphics. As you can see, hits can be very misleading when representing web site traffic.

Page View - Also known as Impressions:

As the term indicates, this refers to the number of times each page on your site is viewed by a visitor. If your site has 20 pages, and a visitor goes to all pages, that visitor generated 20 page views. Keep in mind, every time that same visitor returns to your site, they will again generate more page views, regardless of the time between visits. Please note that some affiliate programs use the term page views or impressions synonymously with unique visitors.

Unique Visitors:

This, by far, is the best and most reliable measure of traffic. A unique visitor is one visitor to a web site, regardless of how many pages he or she visits or how many pages or files/graphics the site contains. Unique visitors are counted only once for a specific period of time - depending upon how the site statistics are configured. Generally, a visitor is only counted once in a thirty day period, no matter how many times they may have returned during that time. Keep in mind, this time period varies wildly in the industry, so when talking about unique visitors, make sure you know how long it takes for a visitor to be counted again.

CTR - Click Through Ratio:

Used primarily in affiliate programs and advertising, this is the ratio between the total impressions of a banner or link and the number of times a site visitor actually clicks on (or executes), the banner or link. For example, if a banner/link had 10,000 impressions in a month, but the advertiser's banner/link was only actually clicked 2,000 times during that same period, the CTR would be 20%.

CPC - Cost Per Click:

This represents the amount of money (or other consideration), an advertiser would pay to the site owner each time their banner or link was clicked by a site visitor.

CPI - Cost Per Impression:

This represents the amount of money (or other consideration), an advertiser would pay to the site owner each time their banner or link was viewed by a site visitor.

CPM - Cost Per Thousand:

This is the amount an advertiser would pay a site owner for every thousand units. I'm using the term UNITS to represent whatever the site owner and advertiser agreed to base payments on - per click, per impression, per subscriber (in e-zine advertising), etc. For example, if you were being paid $.20 cents for each click through, and in a month your site generated 10,000 click throughs for a specific advertiser, you would be paid $2,000.

There are many more terms you should become familiar with, but these are the most commonly used terms with regard to web site traffic, affiliate programs, and web site and/or e-zine advertising.
I hope this helps in your future marketing decisions.

About the Author
David Bell is Manager, Online Marketing, at (http://www.wspromotion.com/), a leading Search Engine Optimization services firm and Advertising Agency.