Pay-Per-Click Dictionary: Terms to Know to Succeed at Google Ads
What’s the difference between a display ad and a search ad? How – and why – would you use pay-per-click ads? The answers to those questions and more can be found in the following Pay-Per-Click Dictionary.
Whether you are just getting started in pay-per-click (PPC) advertising or are looking for a refresher, this PPC Dictionary is the ultimate resource for learning digital advertising and reporting terms.
Setting up Google Ads campaigns can quickly become overwhelming, especially if you aren't managing PPC campaigns on a daily basis. As with any industry, digital marketing has its own set of terms and acronyms that are second nature to us but are completely foreign to people who don’t work in the field every day. We put together this PPC Dictionary to help bridge the knowledge gap.
This dictionary of pay-per-click terms includes definitions for words and phrases that are commonly used in digital advertising and in Google Ads purchasing and reporting. Use this guide as a reference when purchasing your own ads or when working with an external digital marketing agency, like BoxCrush, so that you can quickly get a grasp on the jargon.
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Pay-Per-Click Terms to Know
A/B Testing (also called split testing): Creating multiple versions of an ad containing different variables, to determine which version is most effective. Variables could include text, images, and landing pages (destination URL).
Ad Delivery: The frequency with which Google displays your ads. Ad frequency impacts how quickly your daily allocated budget is spent. Google offers Standard and Accelerated display options.
Ad Extensions: The term Google Ads uses to describe extra information about your business/organization such as address, phone number, ratings and reviews, website links, special offers, pricing, etc.
Ad Group: Used to organize ads within a campaign. Each campaign is comprised of one or more ad groups. Each ad group is comprised of one or more ads that share a budget. An ad group is essentially a folder that structures your keywords (for Google Search) and targeting methods (for Google Display). For instance, if you run a campaign for selling books, you could have ad groups for fiction, non-fiction, history, biography, cookbooks, etc. Each of these ad groups would have its own keywords used to generate placement in search results.
Ad Position: Where an ad displays on Google’s search results. An ad position of #1-3 would appear at the top of the SERP, above the organic results.
Ad Rank: A value that dictates where your ad will display on a search result page. Ad rank is determined by multiplying your maximum bid (how much you are willing to pay for each click on your ad) by your Quality Score (based on your ad, landing page, and keyword relevance).
[Formula] Maximum Bid x Quality Score = Ad Rank (SERP Position)
Ad Relevance: A score that Google assigns to an ad, based on its relevance to user search queries. Your Ad Relevance score impacts your Quality Score, which in turn affects your ad’s SERP position. To determine an ad’s relevance, Google considers several factors, such as:
- Whether keywords used in ads also appear on the ad’s landing page
- Whether people can easily determine what your product, service, or content is by viewing your ad or landing page
Ad Scheduling (also known as dayparting): A Google Ads setting that allows you to determine when your ads will display. Choices include days of the week and time of day (useful if you want to advertise only during hours your business is open, or if you notice ads are performing better during certain timeframes).
AdSense: A Google program that allows online content publishers to earn money by hosting ads (text, video, and interactive media) on their website. Google provides AdSense ads and compensates ad hosts, and hosts control where ads appear on their site.
Ad Variations: Different mixtures of design, text, images, keywords, etc. Using ad variations in your campaigns allows you to test which variations work best in reaching your goal (conversion, click-through, time watched, etc.).
Analytics: Google’s free tool that lets you measure website traffic, time on site, where visitors originate, how they travel through your site, Google Ads ROI, and more.
Average Cost per Click: The average amount you pay for each click on your ad.
[Formula]: # of clicks / cost of ad buy = Avg. CPC
Average Position: A statistic that identifies on average where your ad ranks in comparison to your competitors’ ads. An ad with an Average Position number of 2.6 is typically in position 2 or 3 on a search engine result page.
Below the Fold (also referred to as below the scroll): Originally used to describe content and ads on the bottom half (below the fold) of newspaper pages. In the digital realm, this term applies to content that appears only after the user scrolls downward on a website.
Bid Price: The highest price that an advertiser is willing to pay for a click on an ad.
Bid Strategy: Google allows you to choose different types of bid strategies to meet your search advertising goals. Bid strategy options include:
- Smart bidding (an automated feature designed to maximize conversions)
- Cost per Click (CPC) (to generate traffic to your website)
- Cost per View (CPV) or Cost per Thousand (CPM) (to display ads for a broad audience and increase brand awareness)
- Cost per Thousand Viewable Impressions (vCPM) (to increase brand awareness)
Bounce Rate: The percentage rate of visitors to a website who leave after viewing only one page.
Call to Action (CTA): A prompt that urges viewers to take an immediate action on a website or within an ad (“Call Now,” “Learn More,” “Buy”).
Call Tracking: Google Ads can be set up with a unique Google Forwarding number that tracks the number of people who call the number in your ad.
Campaign: The top-level organizational structure of a Google Ads account. A campaign is a set of ad groups that share a budget, location targeting, bid strategy, and other settings. A Google Ad account is typically comprised of many campaigns, which include one or more ad groups.
Campaign Type: Controls where your ad will display within Google’s ad network. Google has five campaign types:
- Search Network
- Display Network
- Universal App
Click-Through Rate (CTR): The percentage of people who see your ad and click through to your destination page.
[Formula]: Clicks / Impressions = CTR
Conversion: When a website or search viewer completes a desired action. For example, clicking through to a website, signing up for a newsletter, purchasing a product, calling a phone number, or completing a form.
Conversion Rate: The percentage of visitors who take a desired/defined action on a website. For instance, if 100 people visit a website from a Google Ad for red shoes and 20 of those people purchase the red shoes, the conversion rate is 20%.
[Formula]: # of Conversions / # of Clicks = Conversion Rate
Cost per Action (also called cost per acquisition or cost per conversion): A measurement of how much you pay to attain a conversion (sale, click, form submission, etc.). For example, if you spend $1,000 a month on red shoe ads and 20 people purchase your red shoes after seeing the ad, then your CPA is $50.
[Formula]: Cost to Advertiser / Number of Conversions = CPA
Cost per Click (CPC): The cost that Google Ads charges advertisers for each click. CPC varies based on the level of competitiveness of the keyword.
Cost per Thousand (CPM): The price an advertiser pays to have an ad displayed 1,000 times (impressions).
Daily Budget: Google calculates how often to show ads based on each campaign’s daily budget. If your budget is $10 per day, once that budget is spent, your ads don’t show again until the following day. Google may spend more than your daily budget on occasion, but over the course of the month, it won’t exceed your daily budget x 30.4 (the average number of days in a month.)
Destination URL: The landing page a person reaches upon clicking your ad.
Frequency: The average number of times that your ad was served to viewers over a period of time.
Google Display Network (GDN): A network of more than 2 million Google-partner websites and platforms. Advertisers can choose to show display ads across the GDN, on websites most relevant to their target audience, or allow Google to manage their ad placement on GDN sites.
Google Search Network (GSN): The system that shows text-based ads in search results, when people are actively searching for a product or service you offer.
Impressions: Ad views.
Keywords: Words or phrases that determine when and where to show an ad. Advertisers identify keywords for campaigns based on what words or phrases that your audience might search for when they are seeking out a product, service, or offer.
Landing Page: The webpage (destination URL) that visitors reach when they click on your ad.
Location Targeting (also called geotargeting): Targeting an audience for an ad, based on a variety of location-based criteria. You can use the location qualifiers to include or exclude an area. Possible qualifiers to consider when developing location-targeted ads include a radius around an area of a city or a landmark, places of interest (airports, fairgrounds, malls), a radius around your business, etc.
Negative Keywords: Search terms that prevent your ad from displaying. Negative keywords are added at the campaign or ad group level to filter out irrelevant traffic to your site. For example, if you sell tennis shoes, but you do not carry purple tennis shoes, you could define “purple” and “purple tennis shoes” as negative keywords.
Pay per Click (PPC): A form of internet marketing wherein advertisers pay each time a person clicks on their ad.
Quality Score: A numeric rating (of 1 through 10) Google assigns to an ad based on the relevance and quality of its keywords, its associated landing page, and its ad content. A higher Quality Score improves ad placement and lowers the cost of clicks.
Referral URL: The referral URL is the origin point from which someone arrived at your site. For example, a person who clicks on a display ad while watching a video on YouTube, has a referral URL from youtube.com. Referral URLs show you which websites are generating the most traffic to your landing page.
Remarketing: The process of using ads to reach people who have previously visited your website. By adding Google tracking code (called a tag or pixel) to your website or landing page, you can set Google Ads to display for your previous site visitors on sites throughout the Google Display Network. These ads are intended to bring people back to your site to complete a purchase.
Search Engine Results Page (SERP): These are the pages that are displayed when someone performs a search. The SERP contains all of the results of the search.
Traffic: The number of visitors to your website over a given period of time. The measurement of web traffic is also called “sessions.”
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