Pay Per Click 101: PPC terms and definitions you should know

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PPC terms and definitions

 

There are different types of online advertising options available to choose from. PPC is one among these options that are known to provide the best return on investment. Pay-per-click (PPC) advertising, also known as cost-per-click advertising is a form of advertising that directs the traffic to your website’s landing page. The good thing about PPC advertisements is that the advertiser only has to pay for each time the ad is clicked.

Unlike other forms of online advertising, PPC advertising has multiple complicate concepts and strategies. To give you a better understanding of PPC advertising, here are some important PPC terms and definitions you should know about.

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AdWords Editor

PPC ads are generally created with the help of Google AdWords, which consist of various features to create good PPC ad campaigns. One such software application is the AdWords Editor. The AdWords Editor enables a user to make changes in their Google AdWords accounts without posting live. It is a free software that lets you add a group of ads, ad campaigns and make changes in your bids.

Application Program Interface (API)

An API is a program that is more useful for the developers rather than the advertisers. With the help of API, developers can use applications to directly interact with the AdWords server. An API enables you to manage larger AdWord accounts with ease.

Search Engine Result Page (SERP)

Search engine result page is the list of web pages that appear when an online user puts in certain keywords in the search query box. This list of web pages includes organic listings, sponsored listings, and sponsored ads.

Clicks

In very simple terms, clicks are the instances when a person clicks on PPC ads. These include both display and search engine ads. When these clicks are registered by the publisher, you pay the publisher a predetermined amount for each click.

Bounce Rate

In a PPC ad, a lot depends on how much time an online user spends on your website after clicking on your PPC ads. If the user leaves your website too quickly, without exploring much of your website, then it is known as bounce. A bounce rate is, therefore, the average number of people whole clicked on your ad but did not stay for long on your website.

Click Through Rate (CTR)

A CTR is a method used to measure the success of your PPC advertisement. In this method, the number of online users that clicked on your PPC ad is divided by the number of impressions the ad made. For example, if your ad received 7 clicks and 100 impressions, then your CTR would be 7%.

Conversions

Businesses use PPC ads mostly when they aim to get more leads compared to general brand visibility. These leads could be in the form of certain actions such as a purchase, user inquiry, appointment or a basic form filling. When an online user’s click results in one of these actions, and finally he ends up buying your product or service, the person is converted from a lead to a customer.

Cost Per Lead (CPL)

Cost per lead is the amount of money you are spending on each lead that you receive through your PPC advertising efforts. For example, if your company is spending $1000 on pay per click advertising, and the efforts get you 10 leads. Then the CPC would be cost of advertising divided by the number of leads. 1000/10 = $100. So, the CPC would be $100.

Cost Per Click (CPC)

CPC refers to the predetermined cost that an advertiser needs to pay either the search engines or the ad publisher for every time the ad gets a click. Here the main aim of the advertiser is to get the online user to their website.

Cost Per Thousand Impressions(CPM)

Cost per thousand impressions is a concept which is applicable to display network ads. In this type of pricing, the advertiser needs to pay the ad publisher the maximum bid amount for every thousand impressions that are received for the PPC ad.

Keywords

Keywords, in general terms, refers to the words or phrases put in the search query by online users to look for things online. Using these keywords in your content helps you rank well from the SEO perspective. Based on the same theory, keywords are used by advertisers to get featured in the sponsored search results on the search engine result pages. There are also long tail keywords that advertisers use in their PPC ads. These keywords are more specific and consist of four or more words. These keywords are used by B2C and B2B businesses to target consumers mostly when they are closer to their buying stage.

Negative Keywords

While keywords are used by advertisers to make their PPC ads more relevant for an online user’s search, negative keywords are used for the exact opposite purpose. Advertisers include negative keywords in their account to avoid the display of their ads for these negative keywords. For example, if you have a business which only functions within Edmonton and none of the neighboring areas, then you can add neighboring areas such as Calgary in the negative keywords. This way if some use the word Calgary, your ad will not feature in the result. While not all advertisers use negative keywords in their PPC ad campaign, they should seriously consider using it. With the help of negative keywords, you not only save your ads from ranking for the wrong search queries but also effectively qualify the clicks to your website.

Match Types

Match types is an option that enables an advertiser to manage the featuring of their ad for certain search queries that may or may not have the keywords as per the advertiser’s ad group. Google and MSN search has three types of match types known as broad, phrase and exact match type. Yahoo search has two types of match types, advanced and standard match. For example, if you add a broad match for “expensive cars”, your ad may also get featured for keywords such as “costly cars” or “luxury cars”.

Placement Targeting

Often your PPC ads are either placed on the top section of your search engine result pages or somewhere within a website that you open. When planning your PPC ads, you get the option to decide where you would want to place your ads. This is done with the help of placement targeting. Placement targeting enables advertisers on AdWords to select singular spots on the Google content network to display their PPC ads.

Quality Score

A quality score is a grading given to your PPC ad based on certain factors. These factors include the click through rate of your ad, the relevance of the keywords to your ad and the landing pages that you use. These factors are combined and multiplied with the maximum cost per click of your PPC ad to determine your Ad rank and positioning.

Website Optimizer

Website optimizer is now commonly known as the Analytics Content Experiments. This is an analytical tool that allows the advertiser to set up different types of tests to determine how the changes in landing pages affect the behavior of a user. These testing methods help you to work on your landing page shortcomings and help you make positive changes for better conversion rates. For example, if you have an online store selling office furniture, you can conduct an analysis of your landing page by conducting A/B testing methods to test different elements such as the color of the page, the font style, the image, the call to action button, etc.

Ad Delivery

Ad delivery is a function in your AdWords system. In this function, you have the option to choose how often and at what interval your ad will be displayed through the day as per your budget. You could either choose to spread the occurrence of your ad throughout the day or more frequently within a few hours.

Ad Extensions

Apart from your basic PPC ad and tagline, you also have the option to add an ad extension. These extensions provide additional information about your business and your service, which increases the chances of an online user clicking your PPC ad. These extensions may include your business address, contact details, website links, product information, etc.

Ad Position

The ad position, as the name suggests, refers to the order in which your ad will appear on the search engine result page in comparison with the other paid ads. If your position states 2, it means your ad will be placed second on the page.

Ad Group

An ad group is a collective set of your selected keywords, your designed ad campaigns, and your bids. At a given time, to create one campaign, you need to use one or more ad groups. Each ad group will approximately have 5-7 keywords.

Ad Rank

Often people confuse ad rank with ad position. While ad position simply states the number at which your ad will feature on the search engine result page, ad rank is a value that is decided based on your ad position, bid and quality score.

Ad Rotation

Ad rotation is a very useful function if you have multiple ads running at the same time. With the help of this function, you can decide which ad from your ad group should show when. The rotation function has two options, optimize and rotate indefinitely. In the optimize option, based on machine learning, ads are chosen automatically based on its chance to win a bid. In the rotate indefinitely option, all your ads will be featured evenly from time to time.

View-through Conversion

A view-through conversion is a nifty option provided by Google. It traces the online user’s journey from first viewing your ad, not clicking on it, but then converting into a lead through another means. This whole cycle is traced over a period of 30 days. You can also call this a remarketing process.

Remarketing Lists for Search Ads (RLSA)

Sometimes your ads may not be effective in the first trial. Such ads need a good remarketing plan. The RLSA feature of AdWords enables you to remarket your ads. It lets you target online users that have been on your website through the search ad but did not convert. This retargeting is done with better optimized PPC bids.

Bidding

When using PPC ads, you need to bid to get the right keywords for your PPC ad. Bidding in PPC can either be automatic or manual. Automatic bidding enables the advertiser to bid automatically by simply setting a goal of getting the maximum clicks as per the budget. Within this bidding, an advertiser can also set a limit on the CPC to limit the price per click. In manual bidding, the advertiser has to set CPC bidding manually for each keyword.

Landing Page

If you are setting up PPC ads for online users to click, you need a webpage to guide them once they click on your ad. The destination URL that your PPC ad directs the online user to is the landing page. A landing page is a crucial part of your PPC campaign as it contributes to your overall quality score and conversions based on what further information it provides to the online user.

Google Checkout

Google Checkout is a special service which Google provides to the advertisers advertising their PPCs on the Google search. In this service, an online user can buy or sell anywhere on the internet in a secure manner. When your ad uses the service of Google Checkout, a small icon of Google Checkout appears in your PPC ad. This icon helps you gain the trust of online users as a safe and secure business to deal with.

These are some important PPC terms you need to understand in order to create successful PPC ad campaigns. Additionally, you need a strong PPC advertising strategy, good ad copy and adequate budget to invest in your PPC campaign. If you need more detailed information and assistance on creating PPC ad campaign, reach out to PPC advertising experts.

Ali Salman is an online marketing strategist who have worked with Coca-Cola, Extreme Pita, Mucho Burrito, KIA, Honda and other Fortune 500 companies. Ali Salman now heads Rapid Boost Marketing – Canada’s fastest growing search marketing agency. RBM clients include Fortune 500’s and medium size businesses across North America. Ali as RBM CMO leads his team in building and managing quality, high-performing and cost-effective interactive campaigns and programs for our company’s customers and partners. In his career, he has significantly improved campaign performance for large brands such as Government of Alberta, Liberal Party, Workopolis, Cathay Pacific, as well as medium to large retailers and high-tech B2B-enterprise niches.
Ali and his team develop online promotional concepts that spark viral growth through search and social media for RBM clients, devising strategies that use search engines and more to reach key demographic segments in the ways they’re most likely to be receptive. Ali Salman also oversees corporate marketing initiatives for Rapid Boost Marketing, including strategic communications counsel, public and analyst relations and client education programming.

Ali Salman is an online marketing strategist who have worked with Coca-Cola, Extreme Pita, Mucho Burrito, KIA, Honda and other Fortune 500 companies. Ali Salman now heads Rapid Boost Marketing - Canada's fastest growing search marketing agency. RBM clients include Fortune 500's and medium size businesses across North America. Ali as RBM CMO leads his team in building and managing quality, high-performing and cost-effective interactive campaigns and programs for our company's customers and partners. In his career, he has significantly improved campaign performance for large brands such as Government of Alberta, Liberal Party, Workopolis, Cathay Pacific, as well as medium to large retailers and high-tech B2B-enterprise niches. Ali and his team develop online promotional concepts that spark viral growth through search and social media for RBM clients, devising strategies that use search engines and more to reach key demographic segments in the ways they're most likely to be receptive. Ali Salman also oversees corporate marketing initiatives for Rapid Boost Marketing, including strategic communications counsel, public and analyst relations and client education programming.

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