MEDIA BUYING GLOSSARY — 28 metrics & payout models | PPC Rebels
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Media Buying Glossary: 28 Metrics and Payout Models with Formulas (CPA, ROI, EPC, LTV)

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Traffic arbitrage runs on numbers: buyers who do not count burn their budget. This part of the PPC Rebels glossary covers 28 metrics and payout models a media buyer meets every day. Each definition is written in plain English and comes with a formula or a practical note.

Contents

CPA — Cost Per Action

A model where the advertiser pays only for a target action: a lead, a sign-up or a sale. For a media buyer CPA is also a metric: spend ÷ number of actions. As long as your actual CPA stays below the offer payout, the funnel is profitable.

CPC — Cost Per Click

The price of one click: spend ÷ clicks. In Google Ads, CPC is set by the auction — your bid, Quality Score and competition. A low CPC means nothing on its own: cheap clicks that never convert cost more than expensive ones that do.

CPL — Cost Per Lead

Spend ÷ number of leads. A lead is a contact, not a sale, so CPL is always compared with the payout per approved lead multiplied by the approval rate.

CPI — Cost Per Install

Spend ÷ app installs. The base model for mobile campaigns, including Google App campaigns. Always read CPI together with retention — an install that is never opened earns nothing.

CPE — Cost Per Engagement

Payment for a meaningful in-app or in-ad action: finishing a tutorial, watching a video to the end, reaching a level. Costs more than CPI, but the traffic quality is higher.

PPC — Pay Per Click

The umbrella term for click-priced advertising: Google Ads search campaigns, Microsoft Ads and similar platforms. You pay only for the visit, and the auction decides where the ad appears.

PPL — Pay Per Lead

An affiliate payout model with a fixed fee for every accepted lead. The difference from CPL is the point of view: PPL is what you get paid, CPL is what you spend.

RevShare — Revenue Share

The affiliate earns a percentage of the revenue a referred customer generates for as long as that customer stays active. Less money upfront than CPA, but income compounds over months.

Hybrid — hybrid deal

A fixed payout per action plus a revenue share. The fixed part covers traffic costs today, the share builds a long tail of profit.

CR — Conversion Rate

Conversions ÷ clicks × 100%. It is measured at every funnel step — click to lead, lead to sale — and shows exactly where the funnel loses people.

CTR — Click-Through Rate

Clicks ÷ impressions × 100%. In Google Search a higher CTR lifts Quality Score and lowers CPC, which makes headline testing the cheapest way to save budget.

EPC — Earnings Per Click

Revenue ÷ clicks. The core comparison in traffic arbitrage is EPC versus CPC: if a click earns more than it costs, the campaign can be scaled.

EPL — Earnings Per Lead

Revenue ÷ all leads, rejected ones included. Useful when the payout depends on approval: EPL shows the real value of a lead at a glance.

ROI — Return On Investment

(Revenue − cost) ÷ cost × 100%. 0% means break-even, 100% means you doubled the budget. Honest cost includes accounts, tools and proxies, not just ad spend.

ROMI — Return On Marketing Investment

Same idea as ROI, but only marketing costs are counted and revenue is often replaced with margin. Affiliates tend to use both words interchangeably — check which one your partner means.

ACoS — Advertising Cost of Sales

Ad spend ÷ revenue × 100% — the mirror image of ROI. An ACoS of 50% means half of the revenue went to traffic. Common in e-commerce and marketplace advertising.

LTV — Lifetime Value

Total profit a customer brings over the whole relationship. The higher the LTV, the more an advertiser can pay for acquisition — which is why subscription products pay better.

ARPU — Average Revenue Per User

Revenue ÷ active users for a period. Unlike LTV, it is tied to a specific month or quarter.

AOV — Average Order Value

Revenue ÷ number of orders. Raising AOV with upsells lets you afford a more expensive click without touching conversion rate.

Bounce rate

The share of visits with no engagement. In GA4 these are sessions shorter than 10 seconds, with no key event and no second page view. A high bounce rate usually means the ad promises one thing and the landing page shows another.

Retention rate

The share of users who come back N days after the first visit. Day 1, day 7 and day 30 retention is the standard set for judging mobile traffic quality.

KPI — Key Performance Indicators

The numbers an advertiser uses to judge your traffic: approved-lead share, repeat purchases, return on spend. Missed KPIs are a common reason for rejected leads — read them before launch.

Spend

The amount spent on ads over a period. Spend is how buyers and accounts are sized: ad accounts have daily limits that grow with payment history.

Profit

Revenue minus every cost — traffic, accounts, tools, fees. Profit is measured in money, ROI in percent; look at both.

Approval rate — approve

The share of leads the advertiser confirmed: approved ÷ all leads × 100%. It depends on both traffic quality and the advertiser’s call centre.

Hold

The period an affiliate program freezes your earnings while it checks traffic quality. The longer the hold, the more working capital a buyer needs.

Cap

The maximum number of conversions an advertiser accepts per day or month. Anything above the cap may go unpaid — agree on volume with your manager first.

Unit economics

Profit per single unit — a customer or an order. It compares LTV with acquisition cost. If one unit loses money, scaling only multiplies the loss.

Worked example: every formula on one campaign

You spent $500 and got 1,000 clicks and 40 leads. The advertiser approved half of them at $30 per approved lead.

  • CPC = 500 ÷ 1,000 = $0.50
  • CR = 40 ÷ 1,000 = 4%
  • CPL = 500 ÷ 40 = $12.50
  • Approval rate = 20 ÷ 40 = 50%
  • Revenue = 20 × 30 = $600, EPC = $0.60, EPL = $15
  • Profit = $100, ROI = 20%, ACoS ≈ 83%

EPC beats CPC by ten cents, so the campaign is profitable — but the margin is thin: an approval rate of 40% would push it into the red.

FAQ

What is the most important metric in traffic arbitrage?

ROI, because it shows what you earned on every dollar spent. But never decide on ROI alone — keep profit in money, EPC and approval rate next to it.

What is the difference between CPA and CPL?

CPL is a special case of CPA where the action is a lead. CPA is broader: the action can be a purchase, an install, a sign-up or a first payment.

How do I quickly tell that a campaign is losing money?

Compare EPC and CPC on at least a few hundred clicks. If a click consistently earns less than it costs and optimisation does not change that, pause the campaign.

This is part one of the glossary. More sections live in the Glossary category, hands-on guides are in the traffic arbitrage blog, and the events calendar shows where to meet the industry in person.

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