When using Pay-Per-Click (PPC) search ads, advertisers want to achieve optimal ROI. These statistics show that PPC can net high ROI when used correctly.
- For each $1 invested in Google Adwords, businesses get back $2 of revenue (Google).
- Per SocialMediaToday, 72 percent of marketers spent more social ads in 2018 and 60 percent spent more on text and mobile ads in 2018.
Commonly Used PPC Key Terms
- Pay-Per-Click is also known as Cost-Per-Click (CPC)
Pay-Per-Click is a kind of paid advertising used to funnel traffic to your webpage. Advertisers pay a publisher each time someone clicks on their ad. PPC is strongly affiliated with Google AdWords, Bing Ads, and other search engines, and advertisers bid on keywords relevant to their target audience. At times, sites are charged a fixed price per click and the bidding system isn’t used.
These ads appear as display ads on websites with similar content.
- Cost-Per-Acquisition (CPA) is also known as Cost-Per-Action (CPA)
This is a pricing model that bills advertisers based on a specific action by the user, such as completing a form, purchasing a product or watching a video. It measures the cost to acquire one paying customer or qualified lead:
CPA = Cost / Number of Acquisitions
This is more difficult to track than it sounds, and the easiest way to measure CPA is via cookie tracking.
- Click-Through-Rate (CTR) measures how successful your online ad campaign is by calculating the number of clicks as a percentage of the number of impressions, or how many people click on an ad after they view it.
CTR = (Number of Clicks / number of Impressions) times 100
- Search Engine (SE)
Google and Bing are search engines that search for information on the World Wide Web. Results include images, web pages and other files. Search engines collect fees from advertisers to give their listings higher ranking in search results. Therefore, search engines make money on every click on advertisements in the search results.
- SEM: Search Engine Marketing
SEM, free or paid, refers to all the ways you can boost your company’s search results. SEM increases the visibility of a company’s website via search engines. Search engine optimization (SEO) and PPC qualify as SEM.
- SERP: Search Engine Results Page
These are the results of individual searches, but they are highly influenced by a user’s browsing history, location and other factors. Digital marketing aims to predict search results to gain visibility for products or web pages.
- SQR: Search Query Report
A Search Query Report, or Search Terms Report, generated by an advertising network, shows how well an ad is performing when it’s triggered in a search, and it also shows search queries that match a company’s assigned keywords.
It’s often a good idea to contract with PPC experts to ensure that your ad spend meets the goals you wish to accomplish. Understanding the terms provided helps you prepare for that meeting and is the first step to implementing more successful PPC campaigns.