PPC Definitions

Pay-Per-Click marketing has become an online phenomenon, with
marketers only paying for traffic they receive. As Internet
marketing has evolved, pay-per-click is seen by many as the
middle ground between paying per impression and paying per sale.
Advertisers only pay when they receive traffic that may or may
not be targeted.

The pay-per-click advertisements are usually displayed with the
advertisement from the highest paying bidder in the top
position.

Navigating the complex web of Internet marketing, publishers and
marketers are often confronted with terms that seem foreign.
This simple guide will assist marketers in navigating the
Pay-Per-Click marketing model.

Bid – The amount that an advertiser is willing to pay for a
click on a specific keyword.

Budget – The amount of money that an advertiser sets aside for
an advertising campaign. Different publishers allow for
advertisers to set daily, weekly or monthly budgets.

Clickthrough Rate (CTR) – The percentage of clicks on a link.
This is usually a percentage based on the total number of clicks
divided by the number of impressions that an advertisement has
received.

Conversion Rate – The relationship between visitors to a web
site and actions considered to be a “conversion”, such as a sale
or request to receive more information: the percentage of people
whose clicks have resulted in a sale or desired action in
relation to the total number of clicks on an advertisement.

Cost Per Click (CPC) – The cost or cost-equivalent paid per
click-through to an advertiser’s website.

Cost Per Thousand (CPM) – The amount an advertiser pays for one
thousand advertisement impressions, regardless of the consumer’s
subsequent actions.

Delisting – The removal of a listing as a result of inaction or
poor performance.

GeoTargetting – An advertisement targeted at a specific
geographical region, area or location.

Impressions – The number of times an advertisement is viewed by
web surfers.

Keywords – Search terms or phrases that are related to an
advertisement or ad copy.

Landing Page – The specific web page that a visitor ultimately
reaches after clicking an advertisement. Often, this page is
optimized for a specific keyword term or phrase.

Linking Text – The text that is contained within a link.

Pay Per Click (PPC) – Advertising model in which advertisers pay
for click-throughs to their website. Ads are served based on
keywords or themes.

Rank – How well a particular web page or web site is listed in a
search engine or advertising results.

Return On Investment (ROI) – The percentage of profit that
results in a marketing or advertising campaign. Naturally,
advertisers want the amount of money made to exceed the money
spent.

Understanding the above terminology will help marketers navigate
the pay-per-click advertising model, which has emerged on the
Internet and become one of the leading advertising models in the
online world.

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