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Search Engine Marketing – Paid Search Glossary

Author: Ian Cheow

In the search engine marketing industry, we are always bombarded with lots of industry jargons, such as CPC, query, destination URL, etc. In this article, let me cover some standard industry jargon so that you can bookmark this article for reference.

General Account Terms:

  1. Search query. This is the word or phrases that user types into a search engine. For example, when I search for “catering services in Singapore” on Google, catering services in Singapore is the search query.
  2. Ad Group. A group of related keywords.
  3. Campaign. A group of ad groups.
  4. Keyword. A term which advertisers bid to trigger their paid search ads to be shown to relevant searchers on search engines. A keyword may not necessary be a single word and can include phrases with many words.
  5. Ad copy. Ad copy refers to the paid search ads. There are 4 line text elements which users can click and be taken to a website.
  6. Display URL. The web address that is displayed on the ad copy.
  7. Destination URL. This is the page that user will be redirected to upon clicking an ad.
  8. Maximum bid. This is the maximum price an advertiser is willing to pay for a click on an ad.
  9. A/B Split Testing. A testing that is done on 2 ad copies to identify the ad that generates a higher Click-through-Rate (CTR).

Paid Search Metrics:

  1. Impression. An ad exposure to searchers.
  2. Click. When a searcher clicks on an ad and is redirected to a website.
  3. Cost per click (CPC). The cost of each click. CPC is derived by dividing costs by clicks. (For example, $100 for 50 clicks = a CPC of $2)
  4. Key performance indicators (KPI). Top level metrics that are defined by an advertiser that reflect the performance of the campaign.
  5. Click-through-Rate (CTR). Clicks divided by impressions. (100 clicks from 1000 impressions give you a CTR of 10%)
  6. Average Position. The aggregate position where your ads were placed. (if 100 ads were in position 1 and 100 ads were in position 2, the average position is 1.5)
  7. Quality Score (QS). A grade of the relevance of each keyword/ad/landing page combination which determines your cost-per-click and ad position. Quality Score is a Google term and is now being used as an industry standard term. The higher your Quality Score, the lesser your cost-per-click and the higher your ad position.
  8. Algorithm. Algorithm is a set of mathematical rules that search engines use to determine whether your ad should run. Search engines also use this rules to determine your ad position and cost.

Revenue Terms:

  1. Conversion. Any action taken by a user. A conversion can be a sale, a lead generation, a download, a video view, a form completion, etc.
  2. Conversion Rate. Conversions divided by clicks. (10 conversions from 100 clicks is a 10% conversion rate)
  3. Return on Investment (ROI). The total amount of revenue you make minus how much you spend on advertising. (if your paid search campaign generated $10,000 in revenue with a total advertising spending of $1,000, your ROI is $9,000)
  4. Return on Ad Spend (ROAS). ROI expressed as a ratio. ($10,000 sales from $1,000 ad spending gives you a ROAS of 10:1, or 10)
  5. Cost per Acquisition (CPA). The cost it takes to acquire a conversion. It is also a pricing model where an advertiser is charged only when a conversion is generated by the advertising campaign. The fee for CPA is usually agreed upon before advertising begins.

Article Source: http://www.articlesbase.com/sem-articles/

About the Author

Ian Cheow is the co-founder of OOm, an online marketing agency providing search engine marketing service.

Find out more about search engine marketing at OOm Singapore.

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