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Defining the Terms: Online Advertising with AdWords

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Google Employee
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Google Employee

Online Advertising with AdWords

 

Online advertising doesn’t have to feel overwhelming. Become familiar with these key terms to get started off on the right foot with AdWords.

 

Bidding

AdWords runs an auction every single time it has an ad space available -- on a search result, or on a blog, news site, or some other page. Each auction decides which AdWords ads will show at that moment in that space. Your bid puts you in the auction. You can focus on three different things when you bid: clicks, impressions, or conversions.

 

Impression share

The easiest way to think about the value of impression share is to think of the online advertising landscape as a pie. Your impression share is your slice of the pie and by tracking your impression share metrics, you're keeping tabs on the size of your slice compared to the whole. Your ad’s impression share is the number of impressions it has received divided by the estimated number of impressions it was eligible to receive.

 

Clickthrough rate (CTR)

The number of clicks that your ad receives divided by the number of times your ad is shown expressed as a percentage. For example, if you have 5 clicks on an ad that had 1000 impressions, your CTR would be .05%. You can use CTR to gauge which ads and keywords are successful for you and which need to be improved. A high CTR is a good indication that users find your ads helpful and relevant.

 

Pay-per-click (PPC)

Also known as cost-per-click, this kind of advertisement charges you per click versus impression on your ads.

 

Conversion rate

A conversion is the action your customer takes that has value to your business - from visiting your website to downloading an app to making a purchase. The conversion rate is the average number of actions resulting from each click.

 

Have a question about getting started on AdWords? Check out the AdWords Community to get expert advice. 

 

Originally published September, 2014 

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