Understanding PPC Terms

Maybe you’ve heard the term “PPC” before. Maybe you even have a rudimentary knowledge of what PPC is. But have you ever wondered about all the other fancy words associated with this form of advertising?

In this post, we go through the basics of what PPC is and some of the other related terms that we often see floating around PPC.

What is PPC?

PPC or “pay-per-click” is an online model of advertising that takes place on SERPs or search engine results pages. How it works is white label services pay search engines like Google or Bing to have their websites featured on its SERPs. The website shows up when searchers input a specific set of keywords or phrases. The advertisers then pay an amount based on how many clicks the ad gets from these searchers.

An effective PPC campaign is one that can convert searchers into quality leads. It’s not just about getting your ad onto the search engine results pages, it’s also about keeping them invested once they click on it. Otherwise, you’re just paying for people to click and click some more, and they don’t actually convert.

While pay-per-click is typically seen on SERPs, it can also be present on social media. However, CPM or cost per mille (1,000) is more commonly used.

So, how can you tell which links on search engine results pages are PPC ads? First, these results are found at the very top of the page before you see any organic results (results that aren’t paid for). Second, these results typically have a small “Ad” tag on the right-hand side of the link.

PPC Terms and Definitions

What’s a marketing channel without a few acronyms and a little jargon?

Below are some common internet advertising terms that are useful to know. We will also go over the major elements of a PPC campaign, going from the larger areas of study to the more specific ones.

Search Engine Marketing (SEM)

SEM or Search Engine Marketing is a type of digital advertising that takes place on search engines. The main goal of SEM is to increase the visibility of your website on the results pages of search engines like Google or Bing. This is achieved by ranking for a target keyword. This can be done through paid or unpaid methods.

CPC

PPC is based on the concept of creating ads that will be displayed on SERPs when a certain keyword or phrase is used by searchers. CPC or cost-per-click is how much an advertiser will need to pay for a keyword every time the ad connected to that keyword is clicked on a search result displaying their ad (in other words, the page that their ad links to). This is therefore also the amount that is owed by an advertiser to the search engine for each click on the ad.

To avoid confusion, PPC refers to the digital advertising model and CPC is the metric that measures PPC.

CPC bidding

When you are trying to achieve a better ranking, meaning you want your website to be as high up on the results page as possible, chances are you are going to have competition. This is true with SEO and it’s true for PPC.

For CPC bidding campaigns, you participate in what is essentially an auction for ad placement on the SERPs. You set a maximum bid or the most you are willing to pay for every click on the ad. Typically, the higher the amount bid, the better you are placed on the results page. However, the actual amount you pay is normally much less than the maximum bid.

The formula for CPC is as follows: CPC = Ad Rank (the second highest below your rank) divided by your Quality Score.

Ad Rank

This is a value that determines where your ads are placed on the SERPs in relation to other ads. The formula is: Your Ad Rank = Maximum bid X Quality Score.

Quality Score

This is a tool Google uses to measure your ad quality against other advertisers.

There are three primary things that are taken into consideration when calculating Quality Score:

1. Expected clickthrough rate (CTR) – how likely your ad will be clicked
2. Ad relevance – if your ad matches searcher intent
3. Landing page experience – the relevance of your landing page

Other things that are considered are keyword relevance and how well you performed on SERPs in the past.

Source

There are two ways you can set your CPC:

1. Manual – you control the amount for the maximum bid
2. Enhanced – you give search engines the control to shift your bid depending on the goals that you set in your dashboard. An advanced option allows you to use automated bid strategies so that you can have bid adjustments made to your campaign automatically depending on the clicks or conversions recorded.

CPM (Cost per Mille)

As mentioned earlier, CPM is cost per mille or cost per one thousand impressions.

Impression

An impression is a term used in paid advertising and refers to how many times your ad is seen by people on a webpage, social media page, etc.

Ad Campaign

One of the first things you need to figure out is your ad campaign. An ad campaign involves what message or core theme you are trying to convey to your target audience with your ads as well as the strategy or strategies with which to achieve your particular goals. These goals may be driving conversions or boosting brand awareness, for example.

Ad Group

As the name suggests, this is a group of related ads that share similar targets. Ad groups are attached to a designated set of keywords. These groups can be a means of thematically organizing your ads. You can set a CPC for each ad group that you create.

Keywords

Keywords are the words or phrases in search queries that searchers input into a search engine. Ads and keywords work hand-in-hand. Ads target specified keywords related to the offered product or service. Search engines will then show your ads in the SERPs when someone inputs a search query containing those terms. As soon as you are able to tell which keywords on your list are doing well in your campaigns — based on your goals, of course — then you can separate them out and set them as micro CPC targets for those specific keywords within larger ad campaigns. Our white label PPC management service can help figure out the best keywords for ad campaigns.

Ad Text

You should base your ad text on the keywords that you have chosen for the ad. The text in your ad, as well as the content of the landing page, should correspond with the targeted keywords.

Landing Page

If your ad is the hook, your landing page is the clincher. The landing page is where searchers are directed to after clicking your ad. A good landing page could mean the difference between a successful ad campaign with a great conversion rate and one that buries its leads. Be certain that you spend time optimizing and improving your landing page to really seal the deal.

Final Thoughts

So now you have a basic idea of the different terms that you will most commonly see on any PPC-related content. If you’re ready to talk, ask us about our white label digital solutions to see how you can use PPC to your advantage, don’t hesitate to reach out to us!