Digital Marketing Terms Series - PPC (Pay Per Click) Marketing Terms

This is the third post in a series of Internet marketing term blog posts that we’ve been posting throughout the summer to help clients understand the marketing terms that are used for each aspect of digital marketing. Today, we’re focusing on PPC (Pay Per Click) terms.

PPC Terms

A/B testing/Split Testing – a marketing research tactic where variables in a control scenario/experiment for an ad or landing page are changed and the 2 or more resulting alternate ads/landing pages are tested in order to see which of them performs best, improving the effectiveness of the final ad or landing page marketing strategy.

Ad Campaign – A set of ad groups or series of advertising messages with a shared theme, budget, location targeting (and other settings) that promote a product or service. These ad campaigns can be run through sites like Google, Bing, and other search and display network advertising sites, as well as social media (i.e. Twitter, Instagram), email, or other Internet platforms.

Ad Group – A group of ads sharing the same set of keywords; A set of keywords, ads, and bids that is a crucial component in how an ad account is organized. Each campaign is comprised of one or more ad groups, while each ad group usually includes about 5-10 keywords.

Ad Network/Advertising Network – A group of sites or digital properties (such as apps) where ads can appear, and where a single advertiser can manage part or all of the ads for all sites. For example, Google AdWords has 2 advertising networks, the first being the Google Search Network, which includes text ads that are shown in search results on websites such as Amazon, AOL, and (originally Ask Jeeves), as well as thousands of other websites. The second ad network is the Google Display Network (previously known as the Google Content Network), which includes image ads that are shown on millions of websites that participate in the Google Partners program.

Bing Ads – An online platform/service that offers pay-per-click ads on both the Bing and Yahoo! search engines and displays those ads to users within the Bing Ad network. The service lets businesses craft ads, then serve the ads to potential customers searching for items or services with that keyword or that series of keywords that those businesses have bid on. This service also provides targeting choices such as geographic location, demographic, and device targeting.

Click through Rate (CTR) – A standard digital marketing tool for measuring the effectiveness of an ad, click through rate is a metric calculated by dividing an advertisement’s total number of clicks by its total number of impressions (# of clicks / # of impressions). In other words, it shows the ratio of the number of times an ad was clicked on versus the number of times it was shown, or the percentage showing how many individuals out of a hundred people have clicked on an ad. For example, if an ad gets shown to 100 people, and 12 people click the ad, then the ad has a click-through rate of 12% (12 clicks / 100 impressions = 12%). This ratio can be helpful when trying to figure out whether or not an ad’s messaging matches up with what the prospect is searching for, and if the ad resonates with them. Various factors can cause low click-through rates (e.g. ad copy, placement, and relevance).

Conversions – An action that a visitor completes that is defined as valuable to the business being advertised on an advertising platform (referred to as "goals" in Google Analytics). Conversions can be anything from contact form submissions, phone calls, chat session or purchase confirmation.

Conversion Rate – The percentage of people being converted/completing a goal; The rate at which site visitors complete an already established conversion goal. This is calculated by dividing the number of completed conversion goals by the number of clicks (or the number of web page visits). For example, if 100 people visit a site and 13 of them complete the conversion goal (e.g. completing a contact form to sign up for a free eBook), then the conversion rate is 13%. A conversion rate of 25% would mean that a quarter of the people who could have completed a set goal actually did. The definition of a “conversion” varies, as it depends upon your business goals and measurements. A conversion could be an email sign up, a completed survey, a completed purchase of a product or service, or anything else that is measurable.

Cost per Acquisition (CPA) – An online paid advertising metric measuring what you pay for each lead, registration, sale, or any other agreed upon actionable occurrence; specifically measuring the amount of money spent in order to gain a brand new lead or client/customer. This is the cost divided by the number of conversions/actions within a certain time period. An example – if a PPC account spends $2000 dollars in a month and receives 10 conversions (leads or other conversions), then the cost per acquisition equals $200.

Cost Per Click (CPC) – The pre-determined amount paid for each click on an advertisement. Average CPCs can vary in price, from less than $1 dollar for long tail keywords or keywords with little to no competition, to over $100 per click for the most competitive terms, mainly in the insurance, legal, and water damage restoration industries.

Cost Per Impression (CPM) – Means “Cost Per Thousand” (M = 1,000 in Roman numerals). This is the set dollar amount an advertiser agrees to pay per 1,000 impressions/viewings of their ad. This is a standard digital marketing cost arrangement, particularly for banner ads. An example – a publisher charges $10 CPM, and your ad shows 2000 times; this means you’ll pay $20 for the ad campaign ($10 per 1000 impressions x 2). Measuring ad success with CPM happens most often with brand awareness campaigns, where impressions/viewings have more importance than conversions or clicks.

Google AdWords –as the main platform for PPC advertising, the world’s largest paid search marketing program and the largest paid search platform in most countries (with China (Baidu) and Russia (Yandex) being the special exceptions), AdWords is a Google-owned online advertising service/program that advertisers use to bid on keywords, allowing them to display ads to users/customers in the Google Ad Network, which includes Google search results pages, the Search Partners Network, the Google Display Network, YouTube, and other Google products/platforms. AdWords, which was launched in 2001, was the first pay-per-click service offering the Quality Score concept, taking search relevancy (via click-through rate) into account along with bids to dictate ad position. AdWords currently offers several pricing models that differ by bidding strategy and company/brand goals.

Google Analytics (occasionally abbreviated as GA) – Google’s free online web analytics software platform/service that helps webmasters/users track, report, collect and analyze statistics and data about their site’s web traffic and other visitor/customer behavior, including conversions (leads, sales, or other actions), user/visitor metrics, historical data comparisons (comparing data from one month to another month), and the overall effectiveness of each marketing channel.

Google Merchant Center – An online platform/tool used to manage e-commerce merchandise listings (by uploading your store and product information/data) on Google networks, which then makes the listing information available to other Google services (e.g. Google Shopping).

Google Tag Manager – Google's platform created to help digital marketers handle and control tracking tags and snippets of code.

Impressions – A pay-per-click advertising term that represents the number of times an ad was shown/seen.

Keyword – A term that could almost be substituted for “Search Term”, keywords are any words or phrases that a person might search for through a Search Engine; keywords are also used for search engine optimization (SEO). When someone uses a search engine to search for something, they enter a keyword and then the search engine returns related results based on that keyword. And so, marketers and businesses bid on certain keywords through search engine marketing (SEM) in an effort to draw visitors to their website or Landing Page. Because effective SEO also means using keywords in your site content and Meta Tags in order to get your website to appear in searches online for as many keywords as possible, this means you need to modify various portions of the webpage to use a specific keyword or phrase, such as “laptop”, so your webpage would appear whenever someone searched for the keyword “laptop”.

Landing Page – The first page of a website to appear to someone after they click on an ad or a link. The landing page can be any page on a website including the home page. (In some cases, the landing page might be separate from the website.) Some landing pages are created with the intention of generating leads, while others are created with the intention of directing the traffic flow throughout a site. Nearly anytime you direct traffic to your site from an ad or link, you should send those visitors to a specialized landing page with curated information in order to increase your landing page conversion rate.

LinkedIn Advertising – A LinkedIn platform where advertisers can choose from various ad formats, bid on ad space, and target specific audiences based on job title, years of experience and/or years in a particular job (otherwise known as seniority), job industry, and several other demographics.

Negative Keyword – The keywords or phrases chosen to filter out unwanted and/or irrelevant search terms in online paid search advertising, as well as filtering out the audience your ads will be seen by on the search results page. Once you have decided not to use a keyword or phrase in your campaign, you can add it as a negative keyword.

Pay per Click (PPC)/ Paid Search Marketing – Also sometimes referred to as Cost Per Click (CPC), Search Engine Management/Marketing (SEM), or Paid Placement, this is a category of digital marketing that involves using paid advertising (PPC) to increase certain websites’ SERP visibility in order to promote those websites. Advertisers simply pay a search network or portal in order to be listed within the Search Engine Results Pages (SERP) or partner networks for particular keywords or phrases. Search networks are typically set up auction style, where every keyword and phrase has a cost-per-click (CPC) fee, and advertisers only pay when their ad is clicked. Advertisers can also bid on ad space. This model is often associated with search engine and social media advertising such as Google AdWords and Facebook Ads. While the largest networks offering paid placement listings are Google AdWords and Yahoo! Search Marketing, Microsoft adCenter ( and other websites will also allow you to purchase paid placement listings directly. A quality search engine marketing company offering Paid Search will choose a comprehensive set of industry-related keywords/search terms, set up and manage your accounts, write ad copy, craft landing pages, monitor and manage your bidding (amount of money you’re willing to pay for each Search Term click) and budgeting, and test and refine your ads for their effectiveness.

Pixel/Tag/Tracking Code – A snippet of code installed on a site for internet activity tracking purposes.

Quality Score (QS) – A numerical score that Google AdWords gives for various account components (e.g. ads, campaigns, etc.), but which only appears for account holders for keywords. Quality Score is measured on a 1-10 scale. While Google has never publicly explained its exact formula, the three basic elements are: the quality of the ad (determined by click-through rate history and normalized for position to calculate an expected click-through rate); the relevance of the ad (including ad extension use); and landing page relevance and quality. This ultimately determines your ad’s page ranking and cost per click (CPC). At a basic level, your ad having a high quality score can result in higher ad rankings at lower CPCs.

Retargeting– A type of ad targeting where ads are shown only to customers/clients who have previously interacted with the advertiser's site or other web content.

ROAS (Return On Ad Spend) – Similar to ROI, this is a PPC marketing metric that shows the profit made compared to how much money was spent on ads. This is calculated as the revenue divided by cost. It is used to measure the effectiveness of ad campaigns.

ROI (Return on Investment) – a metric evaluating marketing performance by calculating the net profit divided by the investment’s cost (with the investment, in this case, being some form of digital advertising).

Search Impression Share – The percentage of impressions your ad received compared to the total number of eligible impressions.

Search Query/Terms – The words or phrases a user enters into a search engine (such as Google, Bing, Yahoo, etc.) to find the information they want or need. Within Google AdWords, search query reports will show the actual search terms/keywords people are using to click on your ads, which might or might not differ from the advertised search terms/keywords that are in your account. Examples of search queries include “Atlanta electrician,” “how do I know if I have a chipmunk in my attic,” “distance to nearest health food store,” and many more.

SERP (Search Engine Results Page) – The resulting search engine page that is displayed after a search query is performed.

Twitter Advertising – Lets marketers promote tweets on Twitter users’ feeds, even for users that don’t follow your brand. These ads can be used to increase brand awareness, get more followers, expand your social media reach, and/or to communicate with potential customers about a product or service.

UTM Parameters – These are simply tags (commands) that can be added to the end of a URL to help distinguish the particular source, medium, and campaign that brought traffic to a specific webpage. When that tagged link is clicked, the tags are passed on to Google Analytics and tracked. This way, you can also see where else visitors are clicking on your site. With UTM parameters, you’re able to tag your links to evaluate the effectiveness of your marketing campaigns and determine the best ways to increase visitor traffic to your site. NOTE: UTM stands for Urchin Tracking Module, the format Google uses to track specific URLs.

YouTube Advertising YouTube has 6 distinct advertising formats available – Skippable video ads, non-skippable video ads, display ads, overlay ads, bumper ads, and sponsored cards. All ad options can be constructed and run through the Google AdWords platform.

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