Using Google AdWords for the first time will introduce you to some new terminology. Here are a few of the most commonly used AdWords terms:
Keyword: The keywords you choose are the terms or phrases you want to prompt your ad to appear. For example, if you deliver fresh flowers, you can use “fresh flower delivery” as a keyword in your AdWords campaign. When a Google user enters “fresh flower delivery” in a Google search, your ad could appear next to the search results.
Placement: Like keywords, placements are another way for you to control where your ads appear. A placement is usually a website where you’d like your ad to appear. For example, if you select www.example.com/sports as a placement, your ad could appear on that site.
Image ad: A graphical ad, which can be static or animated, that runs on the Google Display Network. Also called a display ad.
Campaign & Ad Group: AdWords accounts are organized into campaigns and ad groups. You start with one campaign, which has its own daily budget and targeting preferences. You can have multiple campaigns running and might choose to create one campaign for each product or service you want to advertise. Within each campaign, you have one or more ad groups, which are sets of related ads, keywords, and placements.
Impression (Impr.): The number of impressions is the number of times an ad is displayed on Google or the Google Network. Monitor your impressions to see how many people your ad is shown to.
Click: If a customer sees your ad and clicks on it to learn more or to do business with you, it is recorded in your account as a click. Monitor your clicks to see how many people choose to enter your website from your ad.
Clickthrough Rate (CTR): Your clickthrough rate (CTR) is a metric that helps show how your ads are performing. The more relevant your ads are, the more often users will click on them, resulting in a higher CTR. The system calculates your CTR as follows: Number of ad clicks/number of impressions x 100.
Cost-per-click (CPC): Under the cost-per-click (CPC) pricing model, AdWords charges you for each click your ads receive. You won’t incur any costs if your ad is displayed and users don’t click it. CPC bidding is the default for ads running on Google and the Search Network. Most advertisers also choose it for their campaigns that focus on getting a direct response from their audience, whether a sale, sign-up, or other action.
Maximum cost-per-click (maximum CPC): The highest amount that you are willing to pay for a click on your ad. You can choose to set a maximum CPC for individual keywords or for all the keywords within an ad group.
Cost-per-thousand impressions (CPM): With some campaigns, you can choose to pay for views of your ad rather than clicks. The maximum CPM is the most you’re willing to pay for each thousand impressions, or views of your ad. CPM bidding is only available for campaigns that target the Display Network and not Google search or search partner sites.
Quality Score: Quality Score is reported on a 1-10 scale (10 being best), and is an estimate of the quality of your keyword, ad, and landing page combination. Quality score (along with your bid) is a major factor in determining your cost-per-clicks (CPCs). Higher quality ads can lead to lower prices and better ad positions. The components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience) are determined every time your keyword matches a customer’s search.
Ad position: The order in which your ad shows up on a page. For example, an ad position of “1” means that your ad is the first ad on a page. In general, it’s good to have your ad appear higher on a page because it’s likely that more customers will see your ad. Ads can appear on the top of a search results page, on the side of the page, or on the bottom of the page. Ad position is determined by your Ad Rank in the auction.
Ad Rank: A score that’s based on your bid, the components of Quality Score (expected clickthrough rate, ad relevance, and landing page experience), and the expected impact of extensions and other ad formats.
First page bid estimate: The bid you likely need to set for your ad to be shown anywhere on the first page of search results.
Top of page bid estimate: On average, ads that appear on the first page or above the search results get substantially more clicks than ads that appear on other search results pages, or alongside the search results. To help you get your ads to show in these valuable positions, AdWords provides cost-per-click (CPC) bid estimates you can use when setting your bids. The top of page bid estimate is the bid you likely need to set for your ad to be shown among the ads at the top of the first page of search results.
First position bid estimate: The bid you likely need to set for your ad to be shown in the first ad position at the top of the first page of search results.
- Note on Ad position bid estimates: AdWords provides them as a guide, meant to give you greater insight with which to plan your bidding strategy — but meeting your ad position estimate isn’t a guarantee of ad position. Ad position will still depend on competition from other advertisers, the components of your Quality Score (expected clickthrough rate, ad relevance, and landing page experience), your CPC bid, the expected impact of extensions and other ad formats, your budget and account settings, and user and advertiser behavior.
Optimization: The process of optimizing your account’s quality and performance by modifying aspects of the account such as ad text, keywords, bids, targeting options, and more. Optimization may even include changing basic campaign settings or content on the landing pages. Optimization is the attempt to gain a measurable improvement, and therefore is performed against baseline values established prior (ie., once you’ve run traffic through your account for a certain amount of volume and time). AdWords professionals often refer to different levels of optimization, including campaign-level, adgroup-level, keyword-level, and landing page optimization.
Visit Google’s glossary to learn more common definitions as well as links to additional details or set-up instructions.