What do ROI, CPA, CPC, and OCPM mean in SEM promotion?

In every industry, there are unique professional terms, either abbreviations or English names. For example, in SEO we often use PV, UV, etc., and in SEM, there are still many professional terms. Some professional terms that are often encountered in SEM promotion will help novice friends understand some simple concepts in SEM.

Since SEM is an instant advertising promotion, it requires accurate calculation of the relationship between the advertising costs and the benefits, and also needs to know where the advantages of advertising are more obvious, and use massive data analysis to change some SEM promotion strategies. These data analyses include the content represented by the professional terms we are talking about today.

【CPA】

The CPA (Cost Per Action) pricing method refers to charging based on the actual effect of advertising, that is, based on the number of valid questionnaires or orders responded to, without limiting the amount of advertising delivered. CPA advertising is the most common form of advertising on the Internet. When a user clicks on a CPA ad on a website and completes the download or registration, the individual/webmaster earns revenue.

【OCPA】

What is Optimized CPA (oCPA for short)? Optimized CPA (oCPA for short) provides advertisers with automatic optimization of effects based on delivery goals and bids, continuously improving the efficiency and input-output ratio of advertisers' ads. When advertisers select specific optimization goals during the advertising delivery process.

【CPM】

The corresponding English name is Cost Per Mille, which means the promotion fee that customers have to pay for obtaining one thousand display opportunities, or the cost per thousand displays. This type of advertising may not be effective, but it can bring a lot of traffic to the webmaster.

The basic calculation method is: CPM = (consumption amount/impression volume)*1000.

【CPC】

The corresponding English is Cost Per Click or Cost Per Thousand Click-Through, which means the cost per click. Baidu bidding advertising promotion basically follows this charging model. The specific calculation method is:

CPC = (next bid * next quality) / keyword quality + 0.01

【OCPC】

Corresponding to the English Optimized Cost per Click, the target conversion price is the target price to be paid for each conversion.

【CPS】

Corresponding to the English "Cost Per Sale", commission is paid based on sales orders. This model is generally more common in the tourism industry, and is also used in shopping, shopping guide and website navigation websites. That is, it can bring in a large amount of traffic, and the fee will be paid only after the order is placed. Common ones include Yiqifa, Dangdang.com, etc.

【ACP】

Corresponding to the English Average Click Price, it means the average click price, and the calculation formula is ACP = total consumption/total clicks.

【CTR】

Corresponding to the English Click-Through-Rate, this is a percentage value, which refers to the ratio of the number of times a certain content on a website page is clicked to the number of times it is displayed. It is generally used to measure the degree of attention paid to the content on the web page, and is also a criterion for measuring whether an advertisement is attractive.

The corresponding calculation formula is CTR = clicks/impressions.

【CPT】

Corresponding to the English Cost Per Time, it refers to advertising calculated by time. For example, many websites charge a certain amount of money per month for advertising. This advertising model is relatively crude and does not provide much protection for the interests of customers. But at the same time, CPT advertising is very convenient and can bring stable income to websites and blogs. Common CPT payments include monthly subscriptions for portal websites, weekly advertising billing for Alibaba Mama, etc.

【CPV】

The corresponding English term is Cost Per Views, which is called rich media advertising. It is mainly paid by display. The advertising fee is calculated based on the number of times the advertising website is displayed. The fee is calculated once the website is opened and is charged per thousand IPs. For example, for a native video ad, there is no charge for display clicks, but it is charged if the viewing time is greater than or equal to 10 seconds.

【CPR】

Corresponding to the English "Cost Per Response", it means that charges are based on each response from the viewer. This type of charging is timely, direct and accurate. However, this is only an auxiliary advertising model, and its display is much smaller than that of the CPC model.

【ROI】

It refers to the rate of return on investment, that is, the ratio of total investment to the total industrial added value produced during the operating cycle. The specific calculation formula is ROI = order amount/consumption amount.

【ARPO】

Refers to the average order amount, and the calculation formula is ARPO = order amount / conversion volume

【CVR (or TVR)】

The corresponding English Conversions Rates (Take Rates) is what we often call conversion rate. Specifically, it refers to the ratio of completed conversion behaviors to the total number of promotional information clicks within a statistical period. This conversion rate is very important. The specific calculation formula is CVR = conversion volume/click volume.

【ECPM】

It refers to the exposure probability. The specific calculation formula is ECPM = CTR * CPC * 1000, which is the product of click-through rate and click price multiplied by 1000. The higher the product of CTR and CPC, the higher the exposure probability.

【CRI】

Refers to the comprehensive ranking index, which is calculated as CRI = quality * bid

【Arrival rate】 = number of visits/click rate.

[Churn rate] = [(Number of entries to this step - Number of entries to the next step) / Number of entries to this step] × 100%.