The Marketing Budget Terms You Need to Know

Does your business need help to develop a marketing budget? It’s important for your business to create a strategy to attract customers and set goals. This will help establish an idea of how and where your marketing dollars are being spent.

During this process, having a better understanding of the terms below will make the marketing budget process much simpler:

Top 15 Marketing Budget Terms

1.      Cost Per Click (CPC)

An advertising revenue metric is based on the number of clicks an ad receives which determines the amount advertisers pay for ads online.

2.      Return on investment (ROI)

Return-on-Investment is a profitability metric that evaluates the effectiveness of an investment. ROI is the revenue generated from the business’ marketing campaign.

3.      Cost-per-Lead (CPL)

A metric that measures how much money is required to produce a new customer.

4.      Customer Acquisition Cost (CAC)

Measures the cost of transforming a possible prospect into a customer.

5.      Pay-per-Click (PPC)

A model where advertisers pay a fee every time their ad is clicked. This is cost-effective for the marketing budget because the advertiser only pays when their ad is clicked.

6.      Digital Marketing Metrics

Digital Marketing Metrics are used by marketing teams to measure the performance of the campaign.

7.      E-Commerce

E-Commerce is the process of buying and selling of goods and services online.

8.      Sales Cycle

The process a salesperson takes to close a deal with a new customer. This process includes prospect, connect, research, present, and close.

9.      Revenue

The profit that is generated from the business through the sale of goods or services. About eight percent of the revenue should be distributive to the marketing budget.

10.  Cost Per Conversion

This process is used by advertisers to identify how much it costs to acquire customers.

11.  Cost Per Action

An advertising payment method where it charges the advertiser for only certain actions taken by a potential customer.

12.  Marketing Qualified Leads (MQL)

Marketing Qualified Leads is a potential customer that has been reviewed by the marketing team that satisfies the requirements to be given to the sales team.

13.  Average Order Value (AOV)

A metric that tracks the average dollar spent when a customer purchases an item online.

14.  Pay for Performance (PFP)

A company program that allows employees to get paid based on their performance. This is used by companies to provide standards for behaviors and performance.

15.  Quality Score (QS)

Quality Score is used to determine ad quality based on the Google Ad metric. The quality score is out of 10 and the higher the score, the better your ad will perform.

Understanding the definitions above is the first step to a great marketing budget. These terms will play a great part in your business’ spending and the effectiveness of your marketing reach.

If you need help in creating the best marketing budget for your business, contact Fat Guy Media.


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