A Guide to PPC terminology

PPC stands for pay per click and covers digital marketing advertising across search engines such as Google and Bing, as well as social media platforms such as Facebook, Instagram, Pinterest, and LinkedIn. As the name indicates, an advertiser pays every time their ad is clicked on.

Here we are going to breakdown the key terminology in PPC advertising.

Impression

 

An impression is counted every time a user sees your ad and helps you to understand how often your ads are being seen.

Impression share

 

Is the percentage of impressions your ads have received compared to the total number of impressions they have the potential to receive. Impression share can be used to gauge the effectiveness of your ads against their potential and against competitors. However, it is largely impacted by budget.

 

Click

 

Is registered every time a user clicks one of your ads.

CTR

 

CTR stands for Click Through Rate and shows the number of clicks your ads have received divided by the number of times they have been shown. CTR is an important metric for understanding how effective your ads are.

CPC

 

CPC stands for Cost Per Click and indicates how much you’ve paid each time a user clicks your ad. It is a crucial metric in digital advertising as expensive CPCs can use up budget and affect your return on ad spend.

Conversion

 

A conversion is an action taken after a user has clicked your ad. A conversion differs for each business, but common ones include a purchase, a form submission, a phone number click, or a newsletter sign up.

Conversion Rate

 

Conversion rate shows how many of your clicks lead to conversion actions. It is your conversions divided by your clicks and is another important metric for understanding the success of your ads.

Cost per Conversion

 

Cost per conversion divides your total cost by your total conversions, to show your average conversion cost. It is another pivotal metric in understanding how successful your ads are.

Conversion Value

 

Conversion value shows how much each of your conversions is worth in monetary terms. This is a particularly useful metric for e-commerce websites who want to see how much value their ad conversions are generating.

ROAS

 

ROAS stands for Return on Ad Spend and divides your ad conversion value by your ad spend. This is another crucial metric for e-commerce websites and will help you understand whether you are making a profit or loss from your ads.

Remarketing

 

Remarketing is an advertising campaign that involves showing ads to previous site visitors in an attempt to get them back to your website and to convert.

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