Bitrate reduction for the same quality. So a file of identical quality - in some metric - will be 20% smaller (e.g. 8 MB instead of 10 MB for a video).
How quality is measured? I never saw any quality estimations in software, e.g. when I'm exporting JPEG image, I'd like to have some kind of result quality estimation, it might be hard to judge it yourself.
Some function of the difference in pixels between the original and decoded compressed version. This is a complicated subject, because a good error function should account for human perception and weight unimportant differences less.