PPC 101: Terms to Know

What is PPC? PPC stands for pay-per-click, a model of online advertising in which advertisers run ads on platforms such as Google, Microsoft, Amazon, Facebook, and Yahoo and pay the publisher a fee every time their ad is clicked. 

PPC is a great way for advertisers to reach their target audience, develop brand awareness, and drive profit. However, if you’re wanting to dip your toes in, there are some basic terms you’ll need to know. 

Bid: The amount of money you are willing to spend for a single click on any given ad.

Bounce Rate: Percentage of people that enter your website and leave without visiting any other page.

Broad Match: Ads may show on searches that relate to your keyword, even searches that don’t have your keywords in them. Currently the “loosest” of all the match types (see Match Type).

Broad Match Modified: Shown with a + in front of each or some of the keywords (example: +red +shoes). A plus indicates the word needs to be somewhere in the search term. This match type still exists but is being sunset by Google and Microsoft; broad-match-modified keywords are currently running but cannot be created new.

CTA (Call-to-Action): The action you want a viewer to take (eg. buy now, sign up today, learn more, etc.). 

Click: Occurs when a user clicks on one of your ads.

Conversion: Occurs when a website visitor completes a desired goal, such as purchasing your product, booking your service, or filling out a form. Tracking conversions requires some coding setup. 

Conversion rate: A percentage that shows the rate that a click turns into a conversion. (formula: conversions ÷ clicks = conversion rate)

Cost (also known as Spend): The sum of the click spend. Loosely it’s clicks x CPC, but since CPCs are an average, it’s not quite an exact formula.

CPA (Cost-Per-Action, sometimes known as Cost-Per-Acquisition): The cost for one conversion (formula: cost ÷ conversions = CPA)

CPC (Cost-Per-Click): Refers to the actual price you pay for each click in your advertising campaigns.

CTR (Clickthrough Rate): The number of clicks that your ad receives divided by the number of times your ad is shown (formula: clicks ÷ impressions = CTR).

eCPC (Enhanced Cost-Per-Click): A bidding strategy that adjusts your CPC to help maximize conversions or conversion value. It adjusts your bid each time your ad is eligible to appear, based on how likely that click is to lead to a conversion. eCPC is used in both Google Ads and Microsoft Advertising.

Exact Match: Enclosed in square brackets; ads may show on searches that have the same meaning as your keyword (see Match Type).

Impression: Occurs when a user sees your ad.

Keyword: A word or phrase that users type into the search engine that advertisers target and display their ads for.

KPI (Key Performance Indicator): A quantifiable measure of performance over time for a specific objective. See more about the KPIs that matter.

Match Type: Dictates how closely a keyword must match to a user’s search query in order to trigger your ads. Match types have changed considerably over the years and no longer work as their names indicate. Current match types include Broad, Phrase, and Exact Match. 

Negative Keyword: A keyword or phrase that advertisers do not want to target or display their ads for. See more about Negative Keywords.

Phrase Match: Enclosed by quote marks; ads may show on searches that include the meaning of your keyword, whether implied or not (see Match Type).

Quality Score: A metric used by ads platforms like Google and Microsoft that influences an ad’s rank and its cost-per-click. Factors that influence Quality Score include CTR, landing page quality, the relevance of ad copy, the relevance of keywords, and the historical performance of the account. Quality score is given in a range from 1 to 10, with 1 being the lowest and 10 the highest.

Remarketing (sometimes known as Retargeting): A marketing technique of showing relevant ads to people who have already visited or taken some action on your website.

ROAS (Return on Ad Spend) (also known as Conv. Value / Cost): The ratio of money gained or lost on paid search relative to the amount of money spent. Or, more simply, for every dollar you spent, how many dollars did you get back? (formula: revenue ÷ cost = ROAS) See more about ROAS.

Search Network: A search-related website where your ads and free product listings can appear (eg. Google, Microsoft, Yahoo, etc.).

Search Query: A keyword or keyword phrase that users enter into a search engine.

SEM (Search Engine Marketing): The name for the wider marketing that PPC is a part of. It can also include other forms of paid advertising like Display and Video. Basically, it’s the name for all the ways to market a website on search engines like Google, Microsoft, Yahoo, and more, designed to raise visibility for that site.

SEO (Search Engine Optimization): A set of techniques used to better position your organic listings based on relevance and how best to appeal to the search engine algorithms. 

SERP (Search Engine Results Page): The page a user sees after entering a search query into Google, Microsoft, Yahoo, or any other search engine.

With the New Year comes a lot of new opportunities, and these terms are a great jumping-off point if you’re looking to get into PPC advertising. Familiarity with these terms will help you to navigate the complexity of digital marketing and set yourself up for success.

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