Pay Per Click Advertising Definitions

by John Eberhard

One of the difficulties you can run into when trying to set up or manage a pay per click advertising account on Google AdWords, Yahoo Search Marketing or MSN Ad Center, is the definitions of words. If you don’t understand the words it will be hard making sense of what the report is telling you.

Here are some definitions for terms you will run into when trying to set up or manage a pay per click advertising campaign with Google.

  1. Search: On a Google AdWords report, this refers to the search network. This is basically the main Google page where people enter search terms, plus some other search engine sites that Google has partnered with. See also “Content” below.
  1. Content: On a Google AdWords report, this refers to the content network. This is where Google will put your pay per click text ads up on other sites. You see this sometimes on web sites where it says “Sponsored ads from Google” and there is a small strip of these ads. They put your ad up on a site that has elected to have Google ads displayed, and they put it up only on sites where the subject matter of your ad matches the subject matter of the site. The Content Network greatly increases the reach of your ads, but fewer people will click on your ads than with the search network. And generally the Content Network gets a lower percentage of conversions than the search network.
  1. Clicks: This is the number of people who clicked on one of your ads. Also called clickthroughs.
  1. Impressions: This is the number of times that your ad appeared, either when someone typed in one of your keywords on the search network, or on the content network when your ad matched the subject matter of another site.
  1. CTR: Stands for Click Through Rate. This is the percentage of time that someone clicked on one of your ads (Clicks) compared to the number of times the ad appeared (Impressions). A higher clickthrough rate means your ad is more effective, so you want this to be as high as possible.
  1. CPC: Cost Per Click. This is the average cost you incur each time someone clicks on one of your text ads. This is affected by how much you are bidding for the various keywords.
  1. Cost: In this column we see the total amount of money spent.
  1. Avg Pos: Stands for Average Position. This means how high up your ad is appearing. As there are almost always multiple advertisers, they are shown in an order, and being nearer to the top or at the top is desirable. So if you see an average position of 1.5, that shows that your ads were appearing some of the time in the #1 position and some of the time in the #2 position.
  1. Conversion: In a lead generation campaign, a conversion is someone who filled out a form and became a lead. In an online sales campaign, a conversion is someone who bought the product. There is special code which you put on one of your web pages, that will then communicate back to the Google interface and tell it when a conversion has occurred. This is vital to do, and not everybody knows about this feature.
  1. Conversion Rate: This is the percentage of people who clicked on your ad and came to the site, that then filled out the form and either became a lead or bought something.
  1. Cost/Conv: This is the cost per conversion. For example, if you got 10 conversions (leads) in one week, and spent $1,000 on your clickthroughs, then your cost per lead would be $100.00 each. You want the cost per conversion to be as low as possible.

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One Response to “Pay Per Click Advertising Definitions”

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  1. Another bit on Content sites: Look through them pretty sharply. What you really want coming to your site are qualified buyers (either of your product or your information).
    If your website is all about writing professional policies and procedures, an ad on is more than likely a waste of your PPC money.
    Ensure your Google Analytics is linked to your adwords account. You can then see that while you’ve had 10 click-throughs, there’s also a 100% bounce rate. Waste of money

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