Basic Google AdWords terms that will help you understand your pay-per-click reports
With numbers and stats flying all over the place, the world of pay-per-click marketing can be a tricky one to get the hang of. And yet, if you want to be able to make informed decisions about your real estate pay-per-click campaign and the budget you allocate to it, there are a few basic AdWords terms you will need to be familiar with.
While a few of these pay-per-click terms may sound intimidating and complicated, they are really very simple once you know what they stand for, and an understanding of the basic PPC terms will be very useful when it comes to interpreting your pay-per-click reports. From time to time, we get clients asking us to clarify some of these terms for them, so we thought we would write this basic glossary that you can refer back to when in doubt.
Basic Google AdWords Glossary
Impressions
The number of times your ads have been shown on the search engines or on Google’s partner websites.
Clicks
The number of times that people have clicked on your ads and visited your website.
Maximum Bid (Maximum Cost-Per-Click)
This is the maximum amount you are ready to pay for a click (you will typically pay less) Your maximum bid is one of the factors that affect how high your Google ad is ranked, but Google guarantees that you will only pay the minimum you have to in order to keep your rank - one cent more than the next ranked ad.
Daily budget
With AdWords, you control how much you spend by setting a daily budget for each PPC campaign. Google may slightly exceed your daily budget on a given day to make up for other days when fewer ads were shown. However, the daily average spend over a 30-day period will not go over this amount.
Cost-per-click (CPC)
The cost-per-click is the price you pay every time that someone clicks on your ad. This will depend on a number of factors, including your maximum bid, the relevancy of your ads and website to your search terms, the general quality of your campaign and, of course, the amount of competition there is for your search terms. While the actual CPC will vary even from one click to another, reports typically show the average CPC of the report time period - a global indicator of how much you are paying for your clicks.
Click-through-rate (CTR)
This is the number of clicks divided by the number of impressions, expressed as a percentage. So if your ads have had 1200 impressions and received 60 clicks, your CTR = (60/1200) x 100% = 5%
Your click-through-rate is another of the key factors that Google takes into account when determining how prominently to display your ad. The Higher the CTR, the higher your ad will rank on Google.
Conversion
Google AdWords allows you to track desirable actions that users perform on your website. These actions, called conversions, most typically include a visitor filling out an online contact form or property request form, but you can also count the number of visits to a certain key page on your website or, say, the number of downloads of a particular report - anything that is important to you. Tracking conversions is a good way of knowing how well your pay-per-click campaign and website are working together. However you have to keep in mind that actions like a visitor e-mailing you or phoning you are not automatically tracked and counted as conversions, so the success of your PPC campaign could be greater than what the reports show.
Cost-per-conversion
The cost-per-conversion is simply the unit cost for each conversion, calculated as the total amount you spent on your PPC advertising in a given time period, divided by the number of conversions in that timeframe.