PPC Terminology 101 | Pay Per Click Advertising

PPC
TERMINOLOGY 101
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Although it’s the fastest growing marketing
channel, online marketing is still relatively
new. Moreover, online marketing comes
with a slew of terminology that can be at
times overwhelming and confusing to the
average person.
Among the various online marketing strategies, Pay-Per-Click
advertising, or PPC, offers targeted advertising for the purpose of
generating more exposure, more traffic and more leads for businesses
and organizations wishing to strengthen their online presence.

Before launching a PPC campaign, or if you want to get more out of your
PPC campaign, it’s important to understand the terminology behind
PPC. Understanding the various terms and concepts can help you better
understand your campaign’s structure and performance metrics.
Here’s a list of basic PPC terms to help you navigate the intricacies of
your PPC campaign and online marketing

01. Ad Copy
02. Ad Extensions
As its name implies, the ad copy is the actual text that makes up your
PPC ads. This includes the headline, descriptive text and a display
URL. The best ad copy uses relevant keywords, a compelling offer
and call-to-action to influence people to click on your ads and visit
your website.
Ad extensions provide additional information about your business
and/or products to compel people to click on your ad. Popular ad
extensions include location extensions, site extensions and call
extensions. The effectiveness of ad extensions depends greatly on
your particular goals and your type of business and industry.

03. Ad Group
04. Ad Scheduling / Day Parting
Ad groups are an essential part of your campaign structure. An ad
group is a collection of relevant and related keywords and their
specific ads. A well-built campaign should have multiple ad groups
that are keyword-themed.
Ad scheduling, also known as day parting, allows you to control
when your ads run. After testing how well your ads perform at
different times of day and days of the week, it’s smart to structure
your campaign to run at peak times when you receive the most
valuable traffic. This allows you to conserve your budget for
maximum profitability

05. AdWords
06. Bid Price
AdWords is Google’s paid advertising program, which includes PPC,
CPM, remarketing and display ads. Given that Google has the largest
market share among the other search engines, AdWords is commonly
associated with online marketing.
The bid price is the maximum amount of money you are wiling to bid
(pay) for each of your particular keywords. Bid prices vary depending
on industry and can range anywhere from a couple of cents to $70 per
click. Understanding the competitiveness of your industry and chosen
keywords is important for budgeting. A bid price that is too low will
provide no visibility or very poor visibility for your ad.

07. Bounce Rate
Although not directly related to PPC, the bounce rate is a statistic
regarding website visitor behavior. The percentage represents the
number of people who visited your website but leave without visiting
additional pages. A high bounce rate should be analyzed closely as it
may mean that the content of your ads and your website or landing
page is not relevant. For optimal conversions, PPC ads and their
destination URL or landing page should have related content.

08. Broad Match
09. Click
Broad match is a match type used in determining when your ads should
be displayed according to particular search queries and keywords.
Broad matching triggers your ads to show for any search that contains
the keyword entered and associated searches including relevant
variations such as misspellings. For example, if your selected keyword
was “dress shoes,” your ad may be triggered for searches for “dress
shoes,” “running shoes,” “buy dress shoes,” “dress shoe polish,” and
other similar searches.
Simply put, a click is the action of someone clicking on your PPC ad.
The number of clicks your particular ad receives depends on a variety
of factors including ad copy, ad ranking/position, and the number of
queries for your particular keywords. Although more clicks are always
better, click quality is also important.

10. Click-Through-Rate (CTR)
11. Content Network
The click-through-rate is another valuable statistic regarding your
campaign’s performance. A high CTR is an indication of a well-built
campaign with relevant ads. The rate is calculated by dividing the
number of actual clicks your ad received by the number of impressions,
or the number of times your ad was shown.
The content network is the available advertising real estate where
advertisers can display their ads. All major search engines have a
content network that includes other websites, blogs and other sites
where advertising is available. If you are running display ads, you can
expect your ads to show up on any of the websites that form part of
your chosen search engine’s content network.

12. Conversion
13. Conversion Rate
Conversions are important goals for advertisers. They are equivalent
to leads and can be defined in a variety of ways depending on the
particular goals of each individual advertiser. Examples of conversions
include making a purchase, submitting a form, downloading a free
report or signing up for a newsletter.
The conversion rate represents the overall effectiveness of your
campaign. It is calculated by dividing the number of clicks your ad
received by the number of visitor interactions on your website, which
could be defined as a sale, a form submission or requesting a
free download.

14. Cost-Per-Click (CPC)
15. Cost-Per-Lead (CPL)
The cost-per-click or CPC is the actual dollar amount you spend for
each individual click your ad receives. The CPC is affected by the
competitiveness of your particular keywords, your CTR and Quality
Score of your ads.
The cost-per-lead is the dollar amount you end up paying to search
engines such as Google for each individual lead generated by using their
online advertising platforms. It is essentially the cost of acquiring a lead.
Your CPL should be aligned with your marketing goals and the expected
profit from each new lead.

16. Cost-Per-Thousand-impressions (CPM)
17. Daily Budget
Depending on the particular online advertising platform, the cost of
your online ads may be based on the number of times it was shown
and not the number of times it was clicked as in PPC. Advertisers such
as LinkedIn offer a CPM method that allows you to pay a for each one
thousand ad impressions (the times your ad is shown), regardless of
how many clicks your ad receives.
The daily budget for your campaign is the maximum amount of money
you are willing to spend on a daily basis. When your daily budget runs
out, you ads stop showing. Your daily budget limits how much you spend
from day-to-day and allows you to budget your marketing spending.

18. Exact Matching
19. Geographical/Location Targeting
(Geotargeting)
Exact matching ensures that your ads are displayed only for searches
containing your selected keyword or keyword phrase. For example, if
your keyword was “mountain bike,” your ad would only show up for
searches for “mountain bike” and would prevent your ad from showing
up for searches such as “bike for mountain” or “mountain bikes.”
Geographical/location targeting, also known as geotargeting, allows you
to select the geographic area where you wish to advertise. A geotargeted
campaign can be as wide as international or as narrow as a 5-mile radius
of your business location. Depending on your goals and business type,
geotargeting can be an effective way of targeting just the right prospects.

20. Impressions
21. Keyword
Impressions are the amount of times your ad was served (shown) in
response to a particular search term, and essentially, how many times
your ad was visible to people. With PPC, the higher the impressions the
better as you want your ad to be shown as often as possible. However,
impressions are not everything. Attracting clicks is the next step.
A keyword is a term, word or phrase within a search query. Keywords
trigger your PPC ads to appear, and thus, should be highly relevant to
your business. Selecting the right keywords for your particular business
and is essential to reaching interested prospects.

22. Landing Page
23. Lead
A landing page or microsite is the specific page or destination URL on
which a person arrives after clicking on your PPC ads. Because your ad
copy may include particular information regarding an offer, discount
or other promotion, it’s generally bad practice to send your PPC ads
to your website’s homepage. Highly-targeted landing pages increase
conversions and add to the effectiveness of your campaign.
A lead is equivalent to a conversion. Depending on your particular goals,
a lead may be a website visitor who submits a form, requests a quote,
downloads a report or sends you an email. A well-built PPC campaign
should increase the number of leads your website receives.

24. Long Tail Keywords
25. Match Types
Long tail keywords are keyword phrases consisting of at least 2 search
terms. They are more specific and tend to be less competitive, giving
advertisers a better opportunity to generate clicks from these keywords.
For example, “women’s running shoe” is a long tail keyword. It’s
counterpart, a short tail keyword, would be “shoe.” Since the long tail
keyword is much more targeted, you have better chances of getting
licks and conversions from your ads than from using short tail keywords.
Match types allow you to control when your ads are shown for specific
search queries. Google offers three types of matching: broad, exact and
phrase. Understanding how to use these match types is beneficial to
maximizing your advertising budget.

26. Negative Keywords
27. Phrase Match
Negative keywords are specific keywords used to prevent your ad from
showing for irrelevant searches. Adding negative keywords to your
campaign allows you to qualify your clicks better and save you money.
For example, if you were a seller of refurbished appliances, you may
want to exclude your ads from showing up for searches such as
“new dishwasher.”
Phrase matching is a type of matching that helps you control when your
ads are shown. More specifically, phrase matching allows you to prevent
your ads from being shown when people add additional words to your
target search query. For example, if your phrase match keyword was “car
tires,” your ads would show for searches such as “cheap car tires” and
“car tires for trucks.” However, your ads would not show for queries such
as “car snow tires.”

28. Position/Rank
29. Quality Score (QS)
The position or rank of your ads is the actual placement of your ads
in the sponsored search results area. The higher your rank, the more
visibility your ad will get. Your ad positioning depends on a variety of
factors including your budget and quality score.
Your campaign’s quality score is a ranking method used by Google to
assign ad placement as well as bid price. The higher your quality score,
the better your ad will perform and the cheaper it will be to run your
ads. Your quality score is based on a variety of factors including CTR and
landing page quality.

30. Reach
31. Relevancy
The reach of your particular campaign is the estimated number of
people who will see your ads. It indicates the overall online exposure
that your ad will receive. The wider your reach, the more opportunities
you will have to attract new clients.
Relevancy, an important part of your quality score, is essentially how
relevant your landing page or destination URL is in comparison to your
ads. The more relevant and aligned your ads and landing pages are, the
better your quality score and the less money you’ll end up paying for
your ads to show.

32. Return on Advertising Spend (ROAS)
33. Return on Investment (ROI)
Your ROAS is the amount of money you either gain or lose from your
investment in paid advertising. The goal, of course, is to gain more
from advertising then the actual cost to advertise. The ROAS will vary
depending on each business and industry.
Similar ROAS, your ROI is essentially the ratio of money gained or lost on
any investment, paid search advertising or other, relative to the amount
invested or spent on the particular investment.

34. Search Engine Results Page (SERP)
35. Search Query
Search engine results page are the actual results that a user sees after
entering a search query into a search engine. It contains both paid ads
(PPC ads) and organic listings. The higher your visibility on SERPs, the
better your online visibility.
A search query or search term is a keyword or phrase used to run a
search on any search engine. These are the terms a person enters into a
search engine when looking for information, products or services.

36. Short Tail Keywords
Short tail keywords, otherwise known as broad keywords, are short,
usually one word, keywords. Given how broad they are, they tend to be
more competitive, costly and offer fewer chances for receiving clicks. An
example of a short tail keyword is “shoe.” Given that the keyword is so
broad, and many other websites and advertisers exist who are using
this keyword, short tail keywords are more competitive and will yield
fewer clicks.

Understanding the basic terminology of PPC is crucial
to making educated decisions about your online
marketing. From being able to understand performance
statistics to the structure of your campaign, learning
the lingo can go a long way.

PPC Terminology 101 | Pay Per Click Advertising

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