PPC Glossary

Internet Advertising Glossary

or maybe that should be an IAG? 

AdWords
The name of the Google advertising system. Famously the term covers the Pay Per Click system, but in later years image adverts, video adverts and now even audio adverts have been added that use other payment models.

Below the Fold
A term that comes from newspapers and refers to the way a broadsheet is folded when you buy it. On the web it is used to mean content on a web page that the user would have to scroll down to view. Because of the number of different resolutions of screens it is impossible to accurately define where this virtual 'fold' is and of course it should be termed something like 'scroll to view'. It should remind advertisers that often if they appear in the 7th or 8th position on AdWords that although this will count as an impression, the advert cannot even be seen by most users unless they scroll down the page. Variation - Above the Fold.

CPA - Cost Per Acquisition
This is the average advertising cost of obtaining 1 customer. With a shop this might be the cost of obtaining a sale, for a newsletter then this would be a cost of getting a subscriber - other businesses may define their goals differently, so the definition of an acquisition will vary.

CPC - Cost Per Click
This is the cost for each click delivered using a PPC advertising system where advertisers are not charged on the frequency of the advert being shown, but rather by the number of times the advert link is clicked. See also PPC

CPM - Cost Per Mille
A measure of advertising cost. In Latin, mille means thousand, hence CPM usually refers to the cost per thousand impressions for an advert. Often used in image banner advertising, which is used by many portal and publisher sites and also through Google AdWords using the image adverts options. See also CPT

CPT - Cost Per Thousand
A measure of advertising cost referring to the cost per thousand impressions. See also CPM.

CPI - Cost Per Impression
A measure of advertising cost where the cost is calculated per impression. An impression refers to the number of times the advert appears on a users screen. Note that, as in a newspaper, just because the advert appears on a screen in front of the user does not necessarily mean that they read it, especially if the advert is 'below the fold'.  

CTR - Click Through Rate
This is a calculation, expressed as a percentage, of the number of people that click on an advert, compared to the number of impressions. This can vary greatly depending on the product or service being advertised. Often a range of 3-5%  is considered good. Anything below 0.5% can be considered poor, and may lead to Google suspending a keyword or phrase. Usually companies will find the adverts on their own name will have the highest CTR. 

Impressions
No, not the office Christmas party, this refers to the number of times an advert has been published on a web page. Should be regarded more an opportunities to view rather than number of times an advert has been seem - as users will not necessarily read all adverts on a page. See also below the fold

Maximum Bid
This is a setting within your account where you set the maximum you are prepared to pay for a click. This can be set at the Ad Group level, or on an individual keyword. This bid is used to help determine what position your advert will be shown. 

PPC - Pay Per Click
The advertising system where advertisers are not charged on the frequency of the advert being shown, but rather by the number of times the advert link is clicked. Said to be invented around 1998 by goto.com that became Overture and later taken over by Yahoo, it was some 4 years later that Google adopted the model. See also CPC.

ROI - Return on Investment
Don't get me started! The strict definition is to take the cost of an investment and the value of any return, and calculate the ROI. For example invest £100, get £110 back after a year = 10% ROI. This makes sense for financial investments, which is where the term comes from. In the advertising world this has come to mean that you take the total cost of advertising and then any revenue, and assume that any revenue above the cost of the advertsing is a positive ROI. You will often see claims by companies of 'We got £25 revenue for every £1 we spent and thats a ROI of x squillon %'. The problem is most people confuse this with being profitable. Using this calculation it is perfectly possible, perhaps even likely, that you could get a great ROI and go bust the same day. The problem is that the calculation is OK a long as the product you are selling actually costs nothing, so it works best for bottled water and get rich schemes, but not for most businesses which have real costs and sell at a margin. So, never think getting a good ROI means you're making a profit.  

QS - Quality Score
A system Google use to determine what it thinks is the relevance of an advert and landing page to the keyword searched on. It is calculated using a variety of factors and is a measure of how relevant your keyword is to your ad group and to a user's search query. The higher a keyword's Quality Score, the lower its minimum bid and the better its ad position.

UGC - User Generated Content
This refers to a website where either the entire content or large portions of it are contributed by the site users. A classic example might be Tripadvisor that started as a site where people could add reviews of hotels for others to use, and still is although now more heavily twisted towards being a hotel booking site. The term can also cover blog comments and product reviews like on Amazon. Some people might say that although UGC sites are the latest greatest thing, that we have had them for years and they used to be called 'forums' - but those people would be bitter and twisted and probably remember bulletin boards...

<shameless ugc attempt>Why not contribute your own suggestions to our glossary and you could get a name check and lots of good karma points - just use the contact form and send us your TLA's, Jargon and other verbal detritus.</shameless ugc attempt>

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