Digital Business Glossary

Asymmetries

 business situation has one party with more information, advantages, or control over another, leading to an uneven playing field.

A/B Testing

A method where a company creates two or more variations of a product feature to test which design is preferred by customers.

Business Model

A strategic plan detailing how a company will create value, including product offerings, target market, promotion strategies, and expected revenue streams.

Complementary Resources

Two or more resources that can substitute for one another and augment value when used together.

Competitive Advantage

Unique factors allowing a company to outperform its competitors in the marketplace, such as resources, capabilities, and branding.

Consumer/Customer Journey

The complete experience a customer has with a brand, from initial awareness to post-purchase behavior.

Cost of Goods Sold (COGS)

The direct costs of producing goods that are sold, calculated by adding purchases during a period to beginning inventory and subtracting ending inventory.

Cost per Thousand (CPM)

The average cost a company pays for 1,000 advertisement impressions, used as a pricing model in digital marketing.

Customer Acquisition Cost (CAC)

The total expense incurred by a business to acquire a new client, including discounts and other costs.

Cash Flow

The net balance of cash moving into and out of a business at a specific point in time.

Customer Experience (CX)

The management of a customer’s journey and needs through brand, product, price, and service.

Differentiation

A strategy to make a business unique and distinct from competitors to increase competitive advantage.

Digital Streaming Platform (DSP)

Online services that allow users to access and view multimedia content over the Internet.

Earned Media

Public exposure through word of mouth, reviews, or social media mentions resulting from the quality and relevance of content.

Economies of Scale

Cost advantages realized by companies when production becomes more efficient, lowering per-unit production costs.

First-mover Advantage

Benefits of being the first business to enter a new market, including preemption of customer relationships and key patents.

Fixed Pricing

A pricing model where the price of a product or service remains constant regardless of production costs.

Gross Margin

The percentage of revenue remaining after subtracting COGS from total revenue.

Intellectual Property (IP)

Creations of the mind protected by law, including inventions, literary works, and trademarks.

Influencer Marketing

A collaboration between popular social media users and brands to promote products or services.

Key Performance Indicators (KPI)

Quantifiable measurements used to gauge a company's performance against its objectives. They can be financial metrics like revenue growth or non-financial metrics like customer satisfaction ratings. Effective KPIs are closely aligned with a company’s goals, provide actionable insights, and help in decision-making processes to drive performance improvements.

Last-mover Advantage

Benefits gained from entering a market after others, allowing learning from their mistakes.

Leverage

Utilizing a firm’s resources to efficiently achieve business objectives.

Market

Any place where two or more parties engage in an economic transaction.

Marketspace

An online environment for buyers and sellers to conduct transactions.

Marketing Funnel

A visual representation of a customer’s journey from awareness to purchase and loyalty.

Monopoly

A market structure with a single seller that dominates an industry.

Monopsony

A market condition where there is only one buyer dominating the market.

MVP (Minimum Viable Product)

A product with enough features to attract early adopters and validate a product idea.

Network Effects

When the value of a product increases as more users participate.

Over the Top (OTT)

Technology services providing on-demand video, music, or messaging over the Internet.

Operations

Activities and processes executed to deliver value to customers and align with strategic goals.

Owned Media

Digital channels fully owned and controlled by a company, such as websites and blogs.

Omnichannel

An approach that provides a seamless customer experience across multiple channels.

PMN (Platform-Mediated Network)

A platform service enabling user interaction, connecting consumers with providers.

Paid Media

Purchased ad inventory to promote brand messages and reach target audiences.

Perfect Markets

A market structure with multiple sellers and no barriers, ensuring competition.

Profit

The benefit gained when revenue exceeds expenses.

Profit Margin

A measure of a company’s earnings relative to its revenue.

Penetration Pricing

A strategy where a new product is introduced at a low price to attract customers.

Revenue Model

Outlines how a business generates income through pricing strategies and revenue sources.

Search Engine Optimization (SEO)

Techniques to improve website visibility and traffic through search engines.

Software as a Service (SaaS)

Cloud-based software solutions accessed via the Internet, purchased on a subscription basis.

Skimming Strategy

A pricing strategy that starts with a high price that decreases over time.

Stakeholder

Any individual or group affected by or with an interest in a business decision.

Switching Costs

The costs incurred by a customer when changing from one product or service to another.

Total Cost of Ownership

An estimate covering all costs associated with an asset throughout its lifecycle.

Value Chain

A series of steps in product creation that adds value from design to delivery.

Variable Pricing

A strategy adjusting prices based on supply and demand levels.

Virality

Achieving a large number of views quickly through sharing.

Willingness To Pay (WTP)

The maximum price a customer is willing to pay for a product.

Word of Mouth (WOM)

Organic marketing through customer discussions about a brand or product.