Understanding “Pay-Per-Click”: 31 Key Terms to Help You Make Sense of Digital Advertising
Looking to begin a Google Ads campaign to generate leads? Before getting started, it’s helpful to understand the lingo. This will help you to efficiently vet any potential marketing agencies you’re looking to hire, or give you a great starting point if you plan on managing the ad campaigns yourself.
Advertising online is pretty straightforward: companies and organizations pay money each time a person clicks on or views one of their advertisements. This type of digital marketing can be a powerful tool for improving sales and generating qualified leads, but being able to successfully maneuver around a Google Ads or Bing campaign requires understanding a vast array of key terms and phrases.
To help you out, we have compiled a list of 31 key terms and phrases that will serve as an introduction to digital advertising. This isn’t meant to be an exhaustive list of every PPC term there is, but it will give you a step in the right direction.
1. Ad Copy
Ad Copy encompasses the headline, description, and URL slug in an ad. The purpose of ad copy is to acknowledge the customer’s pain points and persuade them to engage with the ad. Engagement happens when a user clicks through to the landing page or calls the number via call extension (more on that later). As with any form of advertising, the more persuasive you are with your copy, the more successful you’ll be.
2. Auto Bidding
Auto bidding is a bid strategy that automatically sets bids for your ads based on the algorithmic likelihood that it will result in a click through or a conversion. There are many types of auto bidding strategies, each designed to help you achieve a specific goal (clicks, sales, form submits, etc.).
PPC platforms such as Google Ads and Bing Ads are essentially an auction. A bid is the amount of money you are willing to pay to get your ad to appear for a targeted keyword. The term “Bid” is used interchangeably with “Keyword Bidding”.
4. Bounce Rate
A bounce is when a user exits the landing page before navigating to a different page on the site. Users who bounce are typically considered non-engaged visitors. Bounce rate can be used to improve user experience, however, the goal of most PPC campaigns is lead generation. In these instances, conversion rate is far more important than bounce rate.
5. Broad Match
Broad match is a keyword bidding strategy that allows you to bid on exact keywords, close variations or misspellings, and related keywords. This type of keyword bidding strategy is used to generate as much traffic as possible. For example, if you set an ad to appear when people search “advertising agency” and the campaign is set to broad match, you would likely show for search terms such as “advertising company” or “marketing agency” as well.
6. Call Extension
A call extension is a Google Ads feature that allows you to add a phone number below the ad copy. This feature streamlines the conversion process by enabling users to place a call without clicking through to the website.
7. Click Through Rate (CTR)
Click through rate (CTR) is the rate at which PPC ads are clicked. It is a metric that shows how effective an ad is at generating landing page traffic. The formula for CTR is: (Total Clicks on Ad) / (Total Impressions) = Click Through Rate.
A conversion is the determined action you want a visitor to take when visiting your site. Conversions can include phone calls, form submissions, newsletter subscriptions, or product purchases. The overall goal of most PPC campaigns is to generate conversions and leads.
9. Conversion Rate
The conversion rate is calculated by dividing the total number of conversions by the total number of visitors. This metric is useful in gauging how effective your landing page is at generating leads.
10. Cost Per Click (CPC)
Cost Per Click (CPC) is a digital advertising model that refers to the actual price an advertiser pays every time a user interacts with an ad. It is a fluctuating price point that is determined by the marketplace. The more competitive the keyword, the higher the cost per click.
11. Daily Budget
The daily budget is the amount of money you are willing to spend in a day on your ad campaign. It is an important metric to watch as Google will not let you set a monthly budget. Additionally, Google will often go over your daily limits if you don’t monitor closely. If you have a monthly budget of $12,000 for your Google Ads campaigns, you would set your daily budget at $400 per day.
12. Display Network
Display Network is sometimes referred to as the “Content Network.” This is a network of websites and apps where it is possible to display your ad. While CTR and conversion rate are low with display ads, they are a very inexpensive way to get your brand seen by thousands of people. An example of some websites and apps on the Display Network would be YouTube, The New York Times, and CNN just to name a few.
13. Exact Match
Exact match is a keyword bidding strategy that lets you bid on keywords and phrases only if they are an exact match to the keywords you are bidding on. This excludes misspelled words and closely related keywords. For example, if you have an exact match bid on the keyword “chrome rims”, your ad would NOT show up for “chrome wheels.”
14. Expanded Text Ads
Expanded text ads are the most basic type of Google ads. They contain up to three unique 30-word headlines and two 60-word descriptions. Expanded text ads allow you to include more ad copy than would be possible with other types of PPC ads.
Also referred to as “Location Targeting”, geotargeting is the action of limiting the geographic area in which your ad is shown. For instance, if you operate a brick and mortar restaurant in Nashville, TN, you could serve ads to targeted zip codes and exclude all others.
16. Google Ads
Originally named “Google AdWords,” Google Ads is a comprehensive platform where advertisers can create, manage, and monitor every aspect of a digital advertising campaign.
An impression is when an ad is shown to a potential user, regardless of whether or not the ad is interacted with. Every time an ad is fetched, it is counted as an impression.
18. Impression Share (IS)
Impression share is the number of impressions an ad gets divided by the estimated number of impressions it was eligible to receive. Whether your ad is shown or not is determined by bids, targeting, approval status, and quality score of your ads. This metric is a good indicator of how realistic your bidding strategy is in relation to your competitors.
“Keyword” is a general term that marketing professionals use when determining the words and phrases that potential customers use to search for products, services, and experiences. When a user query matches a keyword, an eligible ad may appear at the top of the search engine results page (SERP). Whether or not the ad appears largely depends on the advertiser’s bid strategy and the quality of the ad.
20. Keyword Planner
Keyword Planner is the Google Ads keyword research tool. It helps PPC advertisers discover keyword opportunities, traffic volumes, and cost per click estimates. Thorough keyword research is crucial to the success of a digital advertising campaign.
21. Landing Page
A landing page is where users arrive after clicking your ad’s URL. This page is extremely important and needs to be optimized to convert. Additionally, it needs to be campaign-specific so that it can deliver on the promise of your ad. For example, if you own a local home improvement company, you would have a specific landing page for each of your home improvement service offerings.
22. Long Tail Keywords
These are keyword phrases that contain two or more words and are more specific than one word keywords. These keywords are worth bidding on because they’re often cheaper and show higher intent to convert. An example of a long tailed keyword is “men’s fedora with leather band.” This is a great long tail keyword because it is specific, 5 words, and relatively inexpensive.
23. Manual Bidding
Manual bidding involves managing your bids with minimal support from algorithms. This involves making bid adjustments based on a number of revolving factors such as past keyword performance or Search Impression Share (IS). This type of bid strategy gives you greater control over maximizing your cost-per-click. It also works well if you have found more specific keywords to target so you can allocate more of your budget to them.
24. Negative Keywords
Negative keywords can be added to your account to indicate that you don’t want to bid on those keywords. Identifying negative keywords helps to dial in an ad campaign by targeting more qualified clicks. It can also help you avoid spending your budget on keywords that show little purchase intent or that are unrelated to your business altogether. For example, if you run a lawn care service company, adding “Lawn Mower Repair” as a negative keyword will stop your ads from showing up for “Lawn Mower Repair” queries.
25. Phrase Match
Phrase match is a keyword setting that will show your ad only when the search includes the exact phrase of your keyword, or close variations that contain additional words before or after. It will also include close misspellings and additional words. For example, If your campaign is set to phrase match and you were bidding on the phrase “youth baseball bat”, your ad would appear on searches such as “inexpensive youth baseball bat” and “youth baseball bat reviews.”
26. Quality Score
This is a ranking system in Google Ads that scores the relevance of your ads from 1-10. There are several factors used to determine the quality score of an ad, including the relevancy of ad’s keyword usage and the quality of the landing page. Important to remember: the higher your Quality Score, the less expensive your ads will be.
28. Return On Advertising Spend (ROAS)
Return On Advertising Spend (ROAS) is one of the most important metrics for measuring the success of an advertising campaign. It helps evaluate which ad campaigns are working and how they can be improved in future efforts. To get your ROAS, take the total revenue generated by a campaign and divide it by the expense of the campaign. It is helpful to calculate this metric at the campaign level so you can determine which campaigns are most successful and pivot marketing budget accordingly.
29. Search Ad
Search ads have a similar appearance to organic search results and appear at the very top of the search engine results page. These ads typically include a green symbol [Ad] marking it as a sponsored ad. You only pay for these ads when a user clicks on the URL making them relatively cost-effective.
30. Search Engine Results Page (SERP)
The Search Engine Results Page (SERP) is the page that users land on after entering a search query. This ever-evolving page contains both paid and organic results, as well as a variety of featured snippets. Being situated at both the top and the bottom of the SERP results, paid ads occupy prime real estate. They can also appear in the Local Pack that features nearby businesses.
31. Search Network
The Search Network is a robust network where search ads can be shown. It consists of a variety of sites that partner with Google, as well as Google-owned search sites like Google Maps and Images. Advertisers can opt in or out of showing ads on the Search Network. Opting to show ads here can increase the total number of impressions your ad receives.
Leveraging the power of paid media can be a highly effective means of generating qualified leads for your business. The more you understand, the more effective you can be.
While this list of PPC terms is far from comprehensive, it should provide you with a solid foundation for beginning to understand the world of PPC advertising. Keep in mind that it is far more important to see the big picture than it is to memorize the jargon.
There is always a story in the numbers. These metrics should serve to help you refine your approach. It’s one thing to know that a high CTR is better than a low CTR, but it’s far more useful to know that you can improve your CTR by writing better ad copy that addresses a problem head-on.
Get in touch if you would like to engage a skilled digital marketing agency to take your advertising efforts to the next level. While we love nerding out on the finer points of marketing, we like getting our hands dirty even more.