PPC Glossary

Glossary of Pay Per Click terms commonly used in the search advertising industry.

Auto Bidding

An automatic method of changing your particular keyword bid by one cent if the competitor closest to you decides to change their bid. Even though you have a maximum bid in place, it is possible to walk away spending less money if auto bidding works to your advantage.

Average Position

Average position refers to the placement of your text ad impressions. For example, if a user Googles a particular keyword, the results page will include two colums of relevant results. The left column, or the main column, will include the organic or non-paid search results. The right hand column will include the sponsored results, which is where your text ads appear. Text ads can also appear at the top and/or bottom of the main column as well. If there are three sponsored ads on top of the main column, these are in positions 1, 2 and 3. The first result on the right column will be position 4 and so on down the column. The higher your position the more likely your ad will be clicked by the user. Average position is your overall average for all the impressions you have received.

Backlinks

Backlinks send visitors to your website via links on other websites.

Bid

See Keyword Bid.

Click-Through Rate (CTR)

The CTR is the percentage that describes the amount of times visitors click your ad links in comparison to the number of times the link is displayed. CTR plays a crucial role when determining Google's Quality Score.

Cost Per Acquisition (CPA)

This figure shows the average expense of creating a single conversion. In other words, the cost of every lead, site registration or sale. It is helpful to know how much money you have budgeted per lead, site registration or sale based on the conversion's value.

Cost Per Click (CPC)

The cost per each ad click. A few people use the term Cost Per Click to describe the expense of their Pay-Per-Click.

Conversion

A conversion is your ultimate objective with a PPC campaign and is defined by you. Common conversion goals include a sale, a lead, a request for a quote or consultation or a view of a particular page. Each of the major pay per click search engines provide tracking codes you can place on certain action pages to indicate goal completions. The tracking information is then relayed back to your PPC campaign where you can determine the conversion's origins such as which keyword the user searched for, which text ad they viewed, etc.

Conversion Rate

The percentage of people visiting your website who are converted to actual customers, signups or leads. The conversion rate takes the amount of click-throughs and divides it by the amount of complete conversions. If you have a large conversion rate, it is most likely that your advertising campaign has been successful.

Cost Per Thousand (CPM)

The price for 1,000 advertisement views, or impressions.

Hits

The amount of views received by a single web page. This number is not determined by whether or not the same individual visits the same page multiple times. The term “hits” is interchangeable with “visits.”

Impression (IMP)

Impressions are also called ad views. An impression describes the views an ad receives in direct relation to the user's Internet browser.

Keyword

Keywords are certain terms a person who is browsing the web inputs into a search engine's inquiry box. With this definition in mind, the pay-per-click advertising campaign you create should revolve around well-chosen, niche-related keywords. The amount of keywords in your campaign will range from at least 1-1,000, depending on the size of your marketing campaign and your company.

Keyword Bid

The highest dollar amount you are willing to spend for each instance that a visitor clicks on your advertisement posted on the search engine of your choice and successfully visits your site.

Link Building Campaign

A way of making a connection with other businesses in your niche for the purpose of exchanging links to post on one another's websites. This will accomplish the goal of raising the amount of search engine crawls and pay-per-click advertisements.

Link Farming

The concept of link farming is generally considered to be unethical as it involves linking to other sites for the sole purpose of increasing search engine page rankings, regardless if the websites are related to the advertiser's business.

Minimum Bid

The least amount of money allocated to pay-per-click advertisements on search engines for a keyword type, specific keyword or overall minimum bid deemed acceptable for a particular keyword.

Page Rank (PR)

The rank of your website on a particular search engine. This term is commonly abbreviate. For instance, the example “PR5” means a website is ranked as number five under a specific keyword by Google.

Page Views

The amount of views received by a certain page on a website.

Paid Inclusion

Paid inclusion allows an business advertiser to pay the search engine of their choice in order to secure a ranking for a given search result. Even though the majority of search engines make no guarantee as to an advertiser's ranking, this sales method is presently being reviewed by search engines. Due to the ethics behind this technique, a lot of search engines have stopped this business practice or are currently considering banning it.

Pay-Per-Click Advertising (PPC)

PPC is a marketing method used by businesses that will pay a set amount of money every time a person clicks on one of their advertisements posted on the homepage or results page of a search engine. This advertisement link will send a visitor to the advertiser's site.

Pay-Per-Click Search Engine (PPCSE)

This term is used to describe a search engine that provides businesses with pay-per-click advertisement options.

Pay Per Performance™ Web Search

This is Overture's initial PPC product that was first revealed in 1998.

Quality Score

An advertiser's Quality Score will vary according to the ad network. Although there is not a specific method for determining a Quality Score, Google describes the creation of their formula by utilizing several factors and measuring the relevancy of keyword to an advertiser's ad group and a visitor's search engine query. A Quality Score will indicate the importance of a particular keyword for a landing page and an advertisement. The higher your Quality Score, the less amount you will be required to spend for a CPC bid in order to participate in an advertisement auction.

Reciprocal Linking

A method used by two websites wishing to link to one another because they are both affiliated or provide complimentary products. The more links accumulated by a website tends to result in that site's higher search engine ranking if there is no link farming involved.

Return on Investment (ROI)

The money a website makes in comparison to the money it spends. There are plenty of ROI calculating tools for most website endeavors such as pay-per-click advertisements.

Search Engine Marketing (SEM)

There are generally two definitions of SEM being used today. The most common definition defines SEM as anything related to paid search marketing or the process of actually paying someone else to send traffic to your website. This includes PPC, CPM, etc. The second, less common definition, defines SEM as anything related to search marketing, whether in the paid or unpaid relams. Under this definition SEO would actually fall under SEM and not be the opposite of it. While both definitions can be accepted, we prefer to define SEM under the former definition, which is basically anything that falls under paid search marketing.

Search Engine Optimization (SEO)

Techniques used to enhance your search engine rankings, such as changing a page's content, text versus code placement, meta tags and keywords.

Unique Visitor

The amount of visitors who view a particular website page. For example, if an individual looks at a web page 2-3 times, they will still be statistically listed as one unique visitor. See the term “Hits.”

Visits

See Hits.

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