A Glossary of PPC Terms

Pay-per-click (PPC) advertising, which, just as its name suggests, is advertising in which you pay per click for each time a visitor clicks your ad, can be a powerful tool for boosting website traffic. Able to be targeted to users in certain geographic areas and customized to a company’s specific budget, PPC search marketing not only delivers measurable and cost-effective results but also immediate ones—with your campaign going live in as little as a few hours. How can you make the most of this fast and powerful marketing tool? What does it take to achieve maximum benefits from PPC advertising? Understanding is key. Finding the best results from PPC campaigns requires a basic understanding of all the factors that go into the pay-per-click advertising process.

Glossary of PPC Terms

To help you increase your understanding of these factors, we’ve assembled this basic glossary of pay-per-click terms, beginning with a definition of PPC itself: Pay-Per-Click (PPC): “The pricing structure used by some online channels to charge an advertiser each time a user clicks on the advertiser's ad. The amount is usually set by the advertiser, not by the channel. Also called cost-per-click (CPC).” (source: Google AdWords, the most popular platform for PPC)
  • Ad Copy: In PPC advertising, ad copy is the headline, text and URL implemented in the actual online ad. It is used to persuade users to click through to a website.
  • Auto Bidding: The process by which your bid is edited by $0.01 if your nearest competitor changes bids, up to the maximum amount you specify. In some cases, it may mean lower costs when auto bidding works in your favor.
  • Bounce Rate: The percentage of times Web visitors leave your site without going to any other pages.
  • Click: The action someone takes in following your PPC ad to your website.
  • Click through Rate (CtR): The percentage of times users click your PPC ad after seeing it.
  • Conversion Rate: The percentage of times your Web visitors turn into buyers, subscribers, customers, etc.
  • CPM: The cost per 1,000 impressions is called CPM.
  • Daily Budget: The allotted funds you are willing to spend on PPC ads each day.
  • Geographical Targeting: Displaying your PPC ad only to users within a certain geographical location range.
  • Hits: The number of times a webpage is viewed, even if by the same user(s).
  • Impressions: The number of times your PPC ad is displayed on search results pages.
  • Keyword: A word or phrase that a Web user types into a search engine and that you set your PPC ad to display on.
  • Keyword Bid: The highest amount of money you’re willing to pay for each click on your PPC ad.
  • Landing Page: The webpage that a Web visitor lands on when clicking through your PPC ad.
  • Pay-Per-Action (PPA): The pricing structure in which an advertiser pays each time a user completes a specified action, such as making a purchase or becoming a subscriber. Usually higher costs for each transactional unit than PPC.
  • Quality Score:  Factored by the Google AdWords system, a quality score is assigned to each of your keywords to measure how relevant it is to your PPC ad and a Web user’s search query. “The higher your Quality Score, the higher your ads can be ranked in position for less cost,” says Amber Speer of Website Marketing.
  • Return on Investment (ROI): ROI refers to the comparison of the profits and costs of your PPC campaign.

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