Definitions & Common Terms
A Record: The A record specifies the IP address to which the user would be sent for each domain name. For example, you can have charlotte.acmewidgets.com point to one IP address, and blue.acmewidgets.com point to a different IP address. There is really no limit or cost to the number of these subdomains.
A/B Split Testing: Split testing refers to the advertiser practice of testing and improving their pay per click ad copy and/or landing pages. For ad copy, advertisers will create multiple pay per click ads for each keyword and over time A/B split testing will show which ad is most effective. For landing pages, advertisers will create multiple variations of the same page. Again, after an appropriate amount of time split testing will reveal which landing page performs best.
Ad Ranking: Where your ad appears on the list of sponsored links compared to competitors ads, this is determined by several factors, including maximum CPC.
Ad Delivery: Ad delivery determines often your pay per click ad is displayed and directly correlates to the daily budget. Some services give the advertiser some control over how quickly their pay per click ads are shown. The common choices are to spread the ad impressions throughout the day or show the ads as much as possible until the pay per click advertiser's daily budget is reached.
Average Cost Per Click (CPC): the average amount you are charged whenever a user clicks on your pay per click ad.
Average Position: The average placement of your pay per click ad in a sponsored advertisements/links display.
Bid: The amount of money the advertiser is willing to pay for clicks on their pay per click ad. The bid is used to determined ad ranking.
Click Fraud: The act of clicking pay per click ads without intending to buy from the advertiser. Click fraud is an illegal practice that occurs when individuals or automated software (i.e. bot) click on pay per click ads to increase the number of click throughs to the advertiser. In most cases, the individual hosting the advertiser's pay per click ads is responsible.
Click Through: Each time a visitor clicks on a pay per click ad.
Click Through Rate (CTR): The percentage of clicks to impressions. A higher percentage indicates a well-placed and/or well-written pay per click ad.
Clicks: The total number of times users have clicked on a pay per click ad.
Conversion: After a user has clicked on your pay per click ad, the user then satisfies the desired action of the advertiser. The action can be any number of things: sale, registration, visit a page, form post, etc.
Conversion Rate: For the visitors who clicked on the pay per click ad, the conversion rate is the ratio of visitors who complete the advertiser's desired action (i.e. purchase, page visit, etc.) versus the visitors who did not.
Cost: The total costs incurred by a pay per click ad for a given set of time.
Cost Per Click (CPC): The cost of each click on your pay per click ad. This is the amount an advertiser will be charged.
Daily Budget: The maximum total amount an advertiser will spend in one day to place all keywords in search results. This budget will apply to all of the ads in their pay per click campaign. Typically, the budget is set on a daily or monthly basis.
Impressions: The total number of times the pay per click ad has appeared, whether in search results or on other websites.
Keyword: The word or group of words used in a search by a user. The same keyword is used by a pay per click ad which in turn allows the ad to be displayed on the search.
Keyword Matching: An option set by the advertiser which determines how specifically a search query must match their keyword or keyword phrase in order for the advertiser's pay per click ad to be displayed.
Landing Page: The page on the advertiser's website where users go to after they click on a pay per click ad.
Maximum Cost Per Click (CPC): The maximum amount that may be spent to place a pay per click ad in search results. This is the advertiser’s bid or what they are willing to spend for each click.
Pay Per Action (PPA): Advertisers only pay when a user has completed an action. Historically, this action has been referred to as a conversion. This advertising model eliminates all click fraud concerns for advertisers. In addition, it also gives advertisers a better measure on ROI. For example, if an advertiser sells blue widgets then they would only pay when a user purchased a blue widget from their website.
Pay Per Impression (PPM): Advertisers pay for each display of their advertisement. Each display is known as an impression.
Quality Score: A measure of the quality and relevance of your pay per click ads. It is a determining factor in the minimum cost per click (CPC) bid for Google and their search network. Quality score is calculated by your click through rate (CTR) and the relevance of your keyword, ad copy and landing page. Other pay per click services have similar scoring algorithms.
Relevance: Relevance applies to keywords, pay per click ads and landing pages and it is the measure of value or usefulness to a user.
Return On Investment (ROI): The amount of money returned compared to the amount of money invested by a pay per click advertiser.
Traffic: Visitors who clicked on your pay per click ad and land on your website.
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