Adwords Explained - Page 2
Online Marketing via Pay Per Click - The Basics

The basics of Pay Per Click

In setting up your Adwords account you have probably picked up on some of the Google lingo, but here’s a brief refresher of the key measures and a brief explanation of each (and here’s a screenshot showing key campaign measures and metrics that you’ll be monitoring):

Click Thru Rate (“CTR”)

CTR is the rate at which a user clicks on your advertisement. For example, if the user clicks on your advertisement 1 times in 10, then you achieve a 10% CTR. Google provides CTR information on individual keywords, on Ad Groups and on whole Campaigns. CTR’s vary significantly, and you’ll want to increase this as much as possible.

Cost Per Click (“Avg.CPC”)

The amount charged to your Adwords account when a user clicks on your advertisement.

Bidding – offering a Maximum Cost Per Click (“Max CPC” / “Current Bid”)

Google works on an auction system where you can “bid” on a Maximum Cost Per Click that you are willing to pay for a particular keyword or term. This is the most that Google will ever charge you if a user clicks on your ad.

Ad position (“Avg.Pos”)

Depending on how much you bid, and other factors, this shows the average position in the list of advertisements that you ad is appearing.

ROI / ROAS (“Cost/Conv”)

ROI / Return On Investment or ROAS / Return On Advertising Spend both refer to methods of measuring whether your investment in Google advertising is delivering results. These both focus on how many $ you have to spend on advertising to achieve a “Conversion”:  A conversion is an inquiry, purchase or signup activity which you are seeking to achieve through your website.

Conversions (“Conv.Rate”)

Conversion is the term used to measure what the user does after they have clicked on your Google advertisement (ie once they are on your website). In some cases you may want them to purchase a product, in other cases you may want them to inquire via a Contact form, or download a white paper like this one! Google offer tools to measure these Conversion behaviours which we’ll discuss later in this paper.  Conversions are probably the most important area of focus in optimising your results from Adwords.

Advertisements

 These are the actual text advertisements that are displayed on the Google Adwords Pay Per Click advertising space on their search engine results page and their partner websites. Google has restrictions on the nature of ads displayed on pay per click (ie textual advertisements) and also limits the amount of content that can be displayed within an advertisement.

This forces brevity and directness of message, and also creates some challenges and opportunities in Ad creation (to be discussed more later in this paper).

Landing Page

This is the web page on your own website that the user arrives at when they click on your Google advertisement. This is a very important page that we’ll discuss in more detail later in this paper.

Page 3....Determining Ad Position and Keyword Matching Strategies.