Marketing Abbreviations Are Easy! Learn 5 New Ones Now
Each industry has its own characteristic professional language that is easy to understand for people working in it every day. When it comes to sharing work with companies outside of your field, things may get particularly complicated. Marketing abbreviations and terms are no exception.
One of the basic problems that can appear at the beginning of cooperation between businesses is lack of understanding of common terms used in the field. Let’s take a look at some of the most problematic expressions and try to explain them in the easiest possible way.
Marketing abbreviations: RFM, RFE or RFwhat?
The beginnings of understanding a new topic can be difficult. The common use of a long list of acronyms can be a huge source of confusion. Here are some of the most common ones:
RFM represents one of the methods that allows you to determine how segments are created based on the value of particular customer. In particular, it refers to:
- Recency (when did the customer last make a purchase?)
- Frequency (how often do they buy?)
- Monetary Value (How much money do they spend?)
In a nutshell, RFM is the segmentation of customers based on their shopping habits. The transaction analysis and segmentation go beyond the purchase value itself and take into account two additional dimensions: the frequency and the time elapsed since the last purchase.
RFE, another proven segmentation model, includes Recency, Frequency and Engagement. There is a difference in the way recency and frequency in RFE are defined: the last time a customer visited the company website and how often he or she visits the online store. Engagement is understood as, for example, time spent on the page or the number of visits to subpages.
How do you buy advertising space in real time?
Try to imagine the following situation. You enter a web portal and the first thing that gets your attention is that the advertising space is filled with things you’ve been searching for recently. For weeks you have been browsing the internet in order to find the earrings of your dreams and here they are – the perfect ones. How did this happen?
One of the explanations of this puzzle could be RTB, which stands for real-time bidding. It is a mechanism that automates buying advertising space in real time in an auction model. When a user visits a website that participates in the auction, the ad exchange receives a request to start a competitive sale. Advertisers then make their bids.
As a result, the advertisement provided by the winner of the auction is shown on the webpage. Of course, this is not just any sort of advertisement, but the one chosen for the needs of the user and shared by the advertiser who paid the most for the space. It presents one of the most important aspects of today’s online marketing— a dynamic approach that allows marketers to react to the customer behavior right away.
NPS – an indicator worth promoting?
Another abbreviation often found in the field of marketing automation is NPS (net promoter score). This tool allows you to assess the loyalty of a company’s clients. It is an alternative assessment method for traditional customer satisfaction surveys, usually correlated with revenue growth.
The strength of this indicator is based on an analysis of one key question:
How likely would you be to recommend our product to a friend or colleague? Please answer on a scale of 0-10, where 0 means would not recommend and 10 would recommend with full confidence.
Many NPS variations quickly appeared in the area of marketing research. The context of the question, the scale of the answer, and even the method of index calculation were modified, but the main advantages of NPS, such as simplicity and versatility, remained the same.
I click, therefore I am
Have you ever wondered what would happen if you sent 1000 emails in a campaign and 500 recipients clicked the links inside? This means you have written an excellent email that appeals to your subscribers (congratulations!), which translates into a high click through rate (CTR) of 50%.
CTR is a term used in online advertising to represent the relationship between the number of clicks and ad impressions, measured as a percentage. It allows you to evaluate the success of your campaign. The better targeted the advertisement is, the better CTR result.
DMP: a perfect place for working with data
With millions of people buying and selling products online, the amount of data collected for marketing purposes is getting increasingly harder to analyze. But is there any place where we can find all this information, shape it with professional tools and leverage it to drive our businesses?
The solution may be DMP (data management platform). This is the backbone of modern marketing, which not only gathers all needed input but also gives advice on how to use it to improve business results. Stored aggregation delivers a practical impact—it’s important for content customization and targeted advertising.
Benefits of perfect communication and ideal word choice
Of course, there will always be some marketing abbreviations, acronyms or expressions you might have to learn. The market (and marketing) is still growing fast, with many new tools and indicators created almost every day. But the knowledge of some basic terminology will give you an opportunity to express your company’s needs in a clear way. Thanks to this, you’ll communicate in a smoother and more effective way.