If you are new to PPC and marketing then you may feel slightly overwhelmed by the new terminology and all the acronyms.
If you are, or there are any that you are unsure of, here is a list of definitions that you should make yourself familiar with:
PPC (Pay per click)
This is obviously an important one to get right if you are managing PPC campaigns and stands for pay-per-click, it means the same as paid search or paid search advertising. It refers to the way in which paid search works – advertisers pay per click on their ads.
CPC (Cost-per-click)
Cost-per-click, this refers to the individual cost an advertiser pays per click on their ads.
CTR (Click through rate)
This stands for click through rate and is a calculation that determines how well your ads are performing in the search results. The calculation is Number of Clicks / Number of Impressions, so the percentage of impressions that resulted in clicks. The higher the CTR the ‘better’ the ad is in Google’s eyes.
CR (Conversion Rate)
Conversion Rate is again a calculation – the number of conversions divided by the number of clicks. The higher the conversion rate the ‘better’ the ad is in an advertiser’s mind.
CPA (Cost per acquisition aka cost per conversion)
Stands for cost per acquisition and is the price an advertiser is paying or is willing to pay per conversion (lead or sale etc.).
ROI (Return on Investment)
This is a very important metric to advertisers as most will want to be making more money from their campaigns than they are spending on them. The calculation is (Revenue minus Cost of Investment) / (Cost of Investment). It is given as a percentage and if that percentage is negative it means that the advertising has cost more than it’s made in revenue. Sad times!
ROAS (Return on Ad Spend)
Calculated by revenue divided by ad spend and shows the return that is being achieved per £1 of ad budget spent. So if you are getting £500 back for every £1 spent you would be a very happy bunny!
Non-PPC specific terms
There are also other acronyms, that are not just related to PPC, that you might want to make yourself familiar. These are as follows:
AOV (Average order value)
The overall average value of a sale from a website.
LTV (Lifetime Value)
Refers to the lifetime value of a customer.
KPI (Key Performance Indicator)
This is something to measure performance against – like a target for advertisers / agencies to aim for.
CTA (Call to Action)
Something that encourages a user to take the action you want them to, so fill out a form, call you, click a button etc.
CRO (Conversion Rate Optimisation)
A process or testing schedule that aims to improve the conversion rate of a website – turn more visitors into customers.
UX (User Experience)
The overall experience a visitor has whilst on a website / interacting with a brand/company, from ad click to sale. The better the user experience, the more customers you are likely to convert.
Any more that you want to know? Just post them in the comments underneath and we’ll let you know!
