Pay per click (PPC) Glossary

Marketers love to use abbreviations and technical terminology to make ourselves feel clever and self important. If you are new to pay per click marketing then do not be intimidated by this. Using this PPC glossary you will be up to speed with the lingo in no time.

The terminology is constantly evolving as new technologies and tool are released and existing ones develop. We will try to keep this page updated but if you notice anything that is missing then it would be a great help if you could just ping us a quick email (contact@deepfootprints.co.uk) to let us know.

Adcenter

Microsoft’s pay per click ad platform. Now re-named as Bing Ads.

Ad Delivery Method

When you run a campaign with a daily budget limit then you can control whether the ads are served as quickly as possible until your daily budget has been depleted OR whether the ads are spread out evenly through the day.

Ad Extentions

Ad Extensions are additional lines or elements that give viewers of your ad additional information about your business; there are many different types of ad extension, including; ad sitelink extensions, product extensions, location extensions social extensions, mobile app extensions and call extensions.

Ad Group

An ad group is a collection of related keywords in a group that is paired with one or more adverts for that group. You can have up to 10,000 ad groups in a single Google Adwords campaign.

Ad Rotation

In Google Adwords you can select how the ads in your ad group are served. i.e. if you have 3 ads are they all served 33.3% of the time? This option is “Rotate – show ads more evenly”, or do you want to “optimize for clicks” – Google will serve the ad in the ad group that has the highest click through rate more frequently, or finally “optimize for conversions” ^ Google will show the ad with the highest conversion rate the most.

Ad Scheduling

An effective way to manage your budget is to only run it on certain hours of the day. For example; if you take most of your orders over the phone and you only have staff in the office between 9am and 6pm then you can use ad scheduling to only run ads within those hours of the day.

Ad Sitelinks

Ad sitelinks are one type of ad extension. These are additional links that sit below your ad and point to separate pages within your site. Usually there are a maximum of 4 sitelinks that will show below your ad. Ad sitelinks only show when you have a high click through rate and your ads are showing above the natural search results in the top 2 or 3 positions.

Ad Status

This is a touch confusing as really there are 2 sets of ad status:

1) Google controlled: the current status of the ad – under review (being checked), eligible (can run but is yet to be manually checked), approved (checked and is running), approved limited (may not show for all searches), disapproved (you will need to review as Google automatically or manually rejected the ad), site suspended (the world is falling in around you – run)

Adwords

The pay per click ad platform owned by Google.

Auto Bidding

In the Adwords interface under the campaigns setting tab there are a a number of choices on how you should control your keyword bidding. These are split into 2 groups; control your bidding manually (DIY option) or auto bidding; there are 3 separate options for how Google may optimise your ad serving using auto bidding; 1) optimise for clicks (Google manages your budget over your portfolio of keywords in order to maximise traffic – this is for the really crazy advertiser. 2) Enhanced CPC – Adwords will bid up or down at different times of the day using your past conversion data in order to optimise for conversions 3) Focus on conversions; Google will use the conversion optimiser on a CPA bidding option in order to maximise your cost per conversion within your available budget.

Automatic Placements

On the Google Display Network you have a choice of the different sites that you can target under managed placements. Whereas Automatic Placements means that you will have your ads served on all websites that Google deem to be related to the keywords or topics that you have selected for your ad group.

Average Position

The average position that your ad has been served in over a period of time (you can select in the Adwords interface). This can be viewed at a keyword or ad level or aggregated at ad group or campaign level.

Bid

The maximum cost per click that you are willing to pay on a given keyword or ad group.

Bidding Option

When you bid on keywords in Google Adwords and also some other paid search marketing platforms you can choose to bid on a cost per click (CPC) or on a cost per thousand impressions (CPM)

Broad Match

This is the loosest form of keyword targeting in Google Adwords and Microsoft AdCenter. Using a broad match keyword there only needs to be a broad relevance between your selected keyword and the actual search term that the user enters when running a query in a search engine.

Broad Match Modifier

Introduced in 2010, the broad match modifier allows you to tighten the targeting of a broad match keyword through adding a + character before 1 or more term in your keyword which will mean that this term “must” be in the users search term. For example on a standard broad match keyword of “tennis shoes” could match on a user query of “tennis racquet” or “sports shoes”. Whereas the keyword “+tennis +shoes” would only match on search queries containing both of those terms e.g. “”Nike tennis shoes” or “women’s tennis shoes”

Budget

Your budget is how much you are willing to spend on advertising. For both Google Adwords, Microsoft Adcenter your budget is set at a campaign level on a daily basis in the local currency of the country that you registered the account in. Be aware that your budget may be exceeded by up to 20% as sometimes clicks happen quickly depending on user behaviour so the search engines cannot always manage to stop your ads from being served the moment you hit your budget cap.

Call Extensions

Call Extensions are an ad extension that allows you to add a telephone number to your search marketing ad in Google Adwords. Users on smart phones can click to call on the phone number and then the advertiser pays a fixed fee for the call – which is usually higher than the average cost per click.

Campaign

A campaign in PPC terms is set of ad groups that are more broadly themed. The campaign level is where advertisers set a daily budget, geographic targeting, network settings (search & display network), ad rotation settings and other settings which will be effective for all the ads in the campaign.

Change History

All changes that a user makes to their Google Adwords account, be it ad changes, keyword changes, bid changes, new ad groups, geo-targeting changes are all logged and saved so that you can go back and check on the changes that have previously been made. This is great if you have an agency managing your PPC account as you will be able to check up on exactly what they have been doing.

Channel

Channel in marketing speak refers to the source of a click or an enquiry. Google Adwords is a channel, Bing PPC is a channel, Facebook is a channel.

Clicks

When someone uses their mouse to click on your advert in the search engine results pages (SERPs) it is registered as a “click” in the advertising platform.

Click-Through Rate (CTR)

clicks divided by impressions gives you your click through rate. This is a key measurement for the relevance of your advert to a users search. For example if you have 100 impressions (views of your ad) and 3 of those people click on your ad then you will have a 3% click through rate (CTR).

Click Fraud

There are instances when malicious hackers may use robots to click on an ad multiple times to run up costs for the advertiser or to gain themselves revenue through Adsense. Google have both automated and manual click fraud checks in place to defend against this activity. See detail from Google here

Client Centre

A client centre is a central hub of Adwords accounts for large companies and marketing agencies who manage multiple Google Adwords accounts under a single login.

Contextual Advertising

Contextual advertising refers to the placement of adverts on relevant web pages. The pages are deemed contextually relevant through scanning the content of the pages text and media to understand the theme of the page. Once the theme is established then ads that have been set to target that theme, either through keyword targeting or topic targeting may be shown on the page.

Conversions

Conversions are specific goals that are set up manually on your website. For example an e-commerce website may set a sale as a conversion, a B2B service provider may set up a form fill as a conversion. Conversions can be a range of activities on a website e.g. visiting a specific URL or triggering a certain event such as a call.

Conversion Rate (CVR)

The conversion rate is calculated by dividing the number of conversions by the number of clicks over a defined time period and is represented as a percentage. For example if you have had 200 clicks and 10 conversions then 10/200 = 5%

Cost Per Click (CPC)

The cost per click (CPC) is how much you pay for a click. You may set a maximum CPC bid of £1.00 but as the actual CPC you pay is determined through an auction you do not usually pay your maximum CPC bid. The CPC can be aggregated at a keyword level, ad group level or a campaign level over any date range the advertiser chooses – this is true for both Google Adwords and Bing.

Cost Per Conversion

To calculate the cost per conversion you need to divide the total cost of your advertising over a set date range by the number of conversions that have occurred over the same date range. For example: if you have spend £500 and have had 20 conversions then your cost per conversion is £500 / 20 = £25. As conversions are tracked to a keyword and an ad level you can see the data both at a very granular level and aggregated at an ad group and a campaign level.

Cost PER Acquisition (CPA)

The cost per acquisition can be one of 2 things: firstly it may be the same as the cost per conversion (detailed above) or it may be the cost of acquiring a new customer. If it is the cost of acquiring new customers then you need to be able to determine how many new customers you gained through PPC – preferably at a keyword level and to then divide the total cost of advertising by this number. e.g. Total cost of advertising is £500 and there have been 10 new customers and 10 returning customers over the same period. To get the CPA of new customers you do the following calculation £500 / 10 = £50. The reason that many businesses discount returning customers is because they believe that they would get their business regardless of the advertising; this may or may not be true.

Cost Per Mille (CPM)

Pay per click advertising is usually billed on a cost per click (funnily enough). However; there are some advertising platforms that also offer advertisers the opportunity to pay on a cost per thousand impressions (CPM) – mille is the latin word for a thousand. Impressions as detailed below are views of an advert.

Creative

The “creative” is the advert that the user sees – this can be a text ad, image ad or a video ad.

Daily Budget

At a campaign level you can set a daily budget which is the maximum that you are willing to spend per day on each campaign. Sometimes you will see that you exceed your daily budget – Google explain this by the fact that it is difficult to predict clicks exactly so deactivate the ads as soon as the budget is reached, but if you have lots of clicks within a short space of time they may well push you over budget before the ads are disabled.

Day Parting

You can set your ads to run on an hourly basis. Therefore if you take leads over the phone you can set your ads to only run in office hours. You can also view reports by the hour to see when most clicks and conversions are occuring.

Device

“Device” relates to the electronic instrument that you are viewing PPC ads on – this may be a desktop computer, a mobile phone or a tablet.

Dimensions

In Google Adwords there is a tab called “Dimensions” – this allows you to run a report to see data on things like day parting (by the hour), geographic location of searchers, free clicks, calls, conversions and search terms.

Display Network

The Google Display Network is the largest advertising network on the internet. You can serve text ads as well as image ads and video ads on the network. Advertising can be targeted to specific websites (managed placements) or placed through contextual advertising (explained above) using keywords or topics.

Dynamic Keyword Insertion

Dynamic keyword insertion allows advertisers to use a small snippet of code in their adverts which will pull in the users actual search phrase so that the ad appears more relevant to them. If the users search phrase causes that line of the ad to exceed the 35 character limit then a default value will be inserted  – here is the code: {keyword:default text}

Enhanced CPC

Enhanced CPC is a function that you can turn on or off at a campaign level. It allows you to let Google automatically raise or lower your max CPC bid based on the cost per conversion of the keyword. The idea is that the system helps you to automatically achieve a better cost per conversion by going after clicks on the keywords that have a higher propensity to convert. The reality is that there is not usually enough data at a keyword level for the system to work with any degree of accuracy.

Exact Match

Exact match is the most highly targeted of the 3 main match types for PPC. Exact match is coded with square brackets e.g. [keyword]. For an exact match keyword to trigger an ad the user must search the exact keyword with no variations at all. That said the new “enhanced” exact match allows Google to match your exact match keyword on slight variations of the keyword.

Geographic/ Locational targeting

Advertisers can target users by country, city or even radius (in KM or miles) around a specific location.

Google Adwords

You’re kidding me – you are on this website and you have never heard of Google Adwords, get outta here mate.

Google Analytics

This is Google’s web analytics tool – it is (at time of writing – Sep 2012) free to use and can give advertisers a broad range of information that will give them a clearer understanding of how their advertising is performing. You can see website traffic levels, conversion levels, time on site, location of users, bounce rate and many other website KPI’s.

Impression

An impression refers to your ad being shown to a user. This means that a person is on a web page where your ad is displayed; of course there is no way to know if the user actually saw your ad or not, unless they click on it.

Keyword

Much of PPC advertising is driven by the use of specific “key” words. users search on a search engine by typing in words. This means that advertisers can attempt to match the users searchers through triggering ads based on keywords. in Google Adwords and in Bing there are 4 main types of keywords; broad match keywords, phrase match keywords, exact match keywords and negative keywords.

Keyword Bid

This is how much you are willing to pay per click on a specific keyword. Your keyword bid will never be exceeded by the price that you actually pay for a click; it is a ceiling to how much you are willing to pay.

Keyword Report

This is one of the most commonly used reports available in the Adwords interface. It allows you to see performance at a keyword level over any date range that you like.

Keyword Tool

This is a good tool for getting an idea of search volumes prior to actually advertising on the keywords. You can input any keyword/s you like and you will be given the monthly search volumes of those keywords for any geographic location you choose; it will also return lots of similar keywords so is a good way to build up keyword lists. The tool can be found here. Tip – Make sure that you select “Exact” on the left hand menu.

Landing Page

A landing page is the page within your website that a user will land on for a specific ad or keyword. Landing pages should be relevant to the keywords that are leading users to them.

Language Targeting

You can target users in multiple languages through pay per click. Language targeting is set at a campaign level.

Location Extentions

Location extensions allow you to supplement your ad with additional information that may be relevant to people who are searching from a location close to your business such as address, telephone number and a map. This is a great function for advertisers with physical shops, restaurants or other businesses that customers visit. You need to have a Google+ Places account for this functionality to work.

Managed Placements

In the Google Display Network you can target specific websites with your ads (Managed Placements) or you can allow Google to select appropriate websites from their inventory base don keywords that you supply or topics that you select.

Maximum Bid

The maximum amount that you are willing to pay for a click on a keyword – this can be set at a keyword or ad group level.

Minimum Bid

This is the minimum amount that you need to pay in order for your ad to gain impressions.

Mobile App Extensions

When smartphone users are searching on Google.com, they can see your ad promoting your app, and directly click to download it from the Google Play or iTunes App Store. What’s more, with the launch of the new Mobile App Extension, you can deep link to a specific page inside your app, right from your ad. People who already own your app can be brought to a specific section inside your mobile app, and easily complete a conversion inside your app.

Negative Keyword

Negative keywords are “stop” keywords that restrict your ad from showing for certain search terms. For example if you sell ladies trainers but not men’s then a good negative keyword would be “-mens”.

Page Views

The number of individual views that you have received on a web page in your website. The page views may not necessarily all come from unique people; one person could visit one of your pages 5 times and rack up 5 page views. This is a metric often used in web analytics tools.

Paid Inclusion

This is a bit of a dying concept but it will surely resurface in one form or another one day. Certain search engines e.g. Yahoo used to allow advertisers to pay for high rankings in the natural search results as well as the paid results. The practice was kind of frowned upon by many in the industry as being deceptive to users so has been curtailed as a service (for now).

Pay-Per-Click (PPC) Advertising

Well that’s why you are here – pay per click (PPC) advertising is a remarkably highly targeted form of advertising as it allows you to serve ads to people that are searching for exactly the product or service that you sell in a search engine – it’s a true win-win form of advertising.

Phone Impressions

The number of impressions (see above) that you receive on ads that have a call extension (see above) to the ad showing.

Phone Through Rate (PTR)

Similar in nature to the CTR, the phone through rate (PTR) is a simple formula of phone calls divided by impressions. It is represented as a percentage e.g. 10 calls from 1000 impressions is a 1% phone through rate.

Phrase Match

Phrase match keywords are keywords that have moderately strict targeting. When you define a keyword as a phrase match then that exact phrase must be in the users searched term in order for your ad to show. e.g. your phrase match keyword is “black Nike trainers” – if a user searches for “cheap black Nike trainers” then your ad will show, however if they search for “black cheap Nike trainers” then your ad will NOT show.

Placements

Placements refer to websites that your ads are placed on in the Google Display Network.

Position Preference

This is an option that has no been retired from Google Adwords – you used to be able to select a specific position in the ad listings that you wanted your ad to appear in on average and Gooogle would control your bidding to achieve this average position.

Product Extensions

If you are a retailer with a feed of products going to the Google Merchant Center for Google Shopping then you can also use this to show product details as an extension to your standard ads. They show images, product name and prices.

Quality Score

This is an important one. The amount that you actually pay per click is determined by your ad rank in relation to other advertisers ad rank. Your ad rank is calculated by multiplying your max CPC bid by your quality score. Therefore if you have a quality score of 10 versus a quality score of 5 then you coudl achieve the same ad rank by bidding half of the value.

Return on Investment (ROI)

The amount of money that you are getting back for a specific investment of cash in a marketing campaign. To calculate ROI the formula is (revenue – cost) /cost = ROI.

Search Network

The search network relates to websites off of Google’s domains but that run Google’s search functionality on their site and show results from Google search on their site.

Search Query Report

Perhaps the single most valuable report available to advertisers. The search query report shows you all of the actual search terms that users used to search before clicking on your ads. This allows you to improve the targeting of your keywords through adding new keywords into new, more highly targeted ad groups as well as negative keywords to campaigns and ad groups to stem irrelevant traffic.

Social Extensions

Social extensions are additional elements that allow you to show details on users who have shared your content to the people that they are connected to on Google+. This aids click through rate but as yet does not have massive reach – depending on sector.

Telephone Extensions

These allow you to show your telephone number as part of your ad and you can pay on a click per call basis for users that call you from Smart Phones after clicking on one of your ads.

View Through Conversions

View through conversions are conversions that occur in later sessions on your website but where the user has previously seen one of your ads. For example if a user searches for “red cars” and sees your ad but does not click on it and then one week later comes back and searches “big red cars” and then clicks on your ad and buys a car from you then the sale will be attributed to the keyword “big red cars” but also a view through conversion will be attributed to the keyword “red cars” as that ad may have contributed in some way to the sale. There is typically a 30 day tracking cookie on Adwords clicks.

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