Beginners Guide to PPC Terminology

The Search Engine Marketing (SEM) and Pay Per Click (PPC) space is a complex world of intricate moving parts, and with so many figurative buttons to push and levers to pull, it can become an overwhelming process much quicker than you would expect. If you don’t understand the terminology and purposes of the various aspects that go into this piece of your digital marketing puzzle, it’s very likely that your SEM efforts will result in poorly built, inefficient campaigns, wasted ad spend, and a poor taste in your mouth. 

The first step to getting started in PPC is learning to understand and speak the language, and this brief glossary of terms, definitions, and examples will help you get on the right track.

What Is SEM and PPC?

Search Engine Marketing (SEM) refers to the process of using search engine platforms, such as Google or Bing, to generate traffic to your website or business through the use of sponsored search results, shopping ads, display banners, and videos on these platforms. This is different from Search Engine Optimization (SEO) in that paid ads will appear above non-paid content in search results. Simply put, you’re paying for people to see a link to your website before anybody else. 

These ads are often run on a PPC model where you only pay whenever a user clicks on the sponsored ad that leads to your website.  

PPC can be a great way to build brand awareness, market to your target audience, and drive traffic to your website from high-intent users who are interested in what your business has to offer. 

Key PPC Terms and Concepts

The following glossary contains many of the key aspects of PPC advertising that are important to understand if you are considering incorporating SEM into your marketing strategy. By understanding these terms and concepts, you will be able to comprehend the basics of how a PPC campaign works and the various considerations to take into account when operating successful PPC campaigns. 

Ad Assets: Assets are the additional pieces that can be added to your search ads once fully built. Think of them like accessories. These can include images, sitelinks to additional pages on your site, call extensions that allow customers to reach out over the phone, promotions to highlight your current sales, and more. The more relevant assets your ads have, the more real estate they take up on the search engine result page (SERP), and the more likely your ad will get clicked on. 

Ad Copy: Ad copy is the part of your ad that is public-facing and visible to the user. This can be in the form of the ad’s headlines and descriptions. Good ad copy is clear and describes what your business offers, what makes you different, and directs the user to take a desired interaction with your business with a call to action (CTA). Read more about the importance of strong CTAs in Erin Taylor’s blog post, The Importance of a Call to Action in Ad Copy.

Ad Group: Ad groups are subgroups that you can sort your keywords into within your campaign. If you think of a campaign as a building, the ad groups are the various rooms inside of that building. Your ad groups should focus on different product categories or services so that you can see on a more granular level how your groups of keywords are performing and make specific changes based on this data. 

Ad Position: Ad position refers to where your search ad appears in the search results for the keywords the ad is targeting. Absolute top position would be the first result, while top position is within the first few search ads at the top of the results page. Paid ads can appear on the bottom of the page as well. 

Ad Rank: Ad rank refers to the internal calculations made in the ad platform, using factors such as quality score and bid to determine your ad position for a search result. Read more about the components of ad rank on Kelly (KB) Bielfeldt’s blog post, 6 Components of Google Ad Rank and How to Improve it without Raising Bids.

Asset Group: An asset group is a group of pieces of creative media to be incorporated into an advertisement based on the channel or channels the campaign is using. Typically, asset groups are used in Performance Max campaigns that combine search, display, shopping, and video ads to show advertisements across multiple channels online. 

Audience: Your audience is the user base your ads are targeting. In campaigns with automated features, audience data is used to optimize the campaign to deliver relevant ads to users who have indicated interest in your product or service, are in the market for what you are offering, and are likely to convert. Read more about Big Changes to the Audiences in Microsoft Ads with Multi-Channel Management.

Bid: PPC platforms operate on an auction system. When multiple businesses are looking to run ads on the same keywords, an instant auction takes place at the time of the search query and ad position, or if your ad displays at all, is based on the amount of money you are willing to pay for a click on that keyword. 

Bidding Strategy: When setting up your campaigns, you have a variety of options to automate how you bid during PPC auctions. You can choose a strategy to bid to drive as many conversions, clicks, or as much conversion value or impressions as possible, regardless of cost. You can also set a target return on ad spend (ROAS), or cost per acquisition (CPA) to focus your bidding to try and meet the parameters you set. Additionally, you can choose to manually set the bids yourself, either on the campaign, ad group, or keyword level. You can read more about bid strategies and Google Smart Bidding in Cary Goldstein’s blog post on the subject, Bid Smarter Using Google Smart Bidding. You can also read more about Google Ads Bid Strategy Controls.

Broad Match: Broad match is a keyword match type that will look at the general concept of your keyword and run your ads on other keywords that users who search that keyword might also be interested in, even if they don’t have any part of that keyword in the search term. Broad match keywords can be associated with audience targeting to go after potential customers based on their interests and demographic information rather than when they are looking for your specific service or product. This is the widest keyword targeting option and, if not very closely managed in frequent and regular intervals, can lead to a lot of unqualified traffic and a hefty amount of wasted budget. It’s worth reading more about Broad Match Setup Best Practices in Jeremy Quinones’ blog post. 

Call to Action (CTA): Your CTA is what you are asking your potential customer to do. Do you want them to submit a lead form, make a purchase, or learn more about your business? Your ad copy should have a clear and strong call to action that directs the user into taking the desired action. 

Campaign: The campaign is the overarching grouping of ad groups/asset groups, keywords, audience and location targeting, and various other aspects of ad operation. Campaigns can have individual goals and functions, such as Performance Max (PMax), shopping, search, video, Discovery/Demand Gen, and display campaigns. You can have multiple campaigns under a single account. 

Click: In PPC terms, a click is when a user interacts with your ad. On the pay-per-click model, you only pay when your ad is clicked on. 

Click-Through Rate (CTR): Your CTR is the percentage of the clicks an ad gets versus how many times it’s been seen, known as impressions. 

Conversion: A conversion quantifies the action that you want a user to make when they interact with your business. This can mean an individual sale, a submitted lead form, phone calls, or more. 

Conversion Tracking: To track your site conversions, a conversion tracking code will need to be implemented within your site that will be able to track when a conversion action takes place and report it to your advertising platform. Conversion tracking examples include a purchase, a lead, a contact request, a service request, a phone call, and many others. If conversion code is installed incorrectly, it can lead to inaccurate data being reported back to you and the ad platform, affecting ad performance and making it difficult to make informed marketing decisions. You can read more about the importance of conversion tracking in Nikki Kuhlman’s post, No Data, Fewer Dollars: Conversion Tracking Drives PPC Performance.

Cost Per Acquisition (CPA): This can also be referred to as Cost Per Lead (CPL). CPA is the amount of money spent on advertising versus the number of conversions during a period of time, giving you, on average, how much it costs to gain a single conversion. This can be influenced by various factors, including the cost per click (CPC), competition, and more. 

Cost Per Click (CPC): The CPC is how expensive a single click is on a keyword or ad placement. This is influenced by the platform’s ad auction and what your competition is willing to bid on their keywords. Keywords or placements that have more competition tend to have a higher CPC. 

Display Ads: Display ads are run through a display campaign. These are image ads often displayed as banners along the top, sides, and bottoms of websites, as well as during online videos or in-app ads. You can read more about display ads on Amazon on Shannon O’Connell’s blog, Increase Your Visibility with Amazon Sponsored Display Ads.

Exact Match: Exact match keyword targeting will display ads on searches that have the same meaning or intent as your chosen keyword. This includes “close variant” searches that are similar to the targeted keyword, even if they are not exact matches. Exact match targeting goes after high-intent audiences who are very likely to convert as they are looking for exactly what you are offering. 

Impressions: Impressions represent how many times your ad has been shown. This can be influenced by your budget, bid, amount of competition, and overall search volume for the keywords you are targeting.

Impression Share: An impression share is the percentage of the time your ad has been shown. 

Key Performance Indicator (KPI): A KPI is a metric by which you are measuring success with a campaign. This could be targeting a specific number of conversions, increasing revenue by a certain percentage, lowering your CPA to a certain percentage, or another set goal. It is important that your KPIs are quantifiable and achievable within a reasonable timeframe. 

Keyword: Keywords are the words that describe your business, products, or services that ad platforms use to target your advertisements to relevant audiences who are using those keywords to search for what they’re looking for. Charlotte St. Pierre discusses Long Tail Keywords in her blog post.

Landing Page: A landing page is the URL that the user is sent to after they click their ad. A clear and well-designed landing page is important for driving conversions. Your ad can receive a lot of clicks, but if the landing page is low quality, unclear, or promotes a bad user experience, users will leave the site without converting. You can learn some best practices for improving your landing page on Eric Kinsey’s blog post on landing page optimization. You can also read more about ways to improve your landing page in Miranda Schimer’s article: 12 Ways to Optimize PPC Landing Pages.

Match Type: The match type refers to how the ad platform displays ads based on how close the user’s search was to your targeted keyword. There are three common match types: Exact, Phrase, and Broad. You can read more about match types on Google Ads and how they work here: Real Google Match Types.

Negative Keyword: A negative keyword is a word or phrase that you specifically do not want your campaign to target. Using negative keywords, either while you’re building your campaign or added over its lifetime, will help you filter out less relevant and unqualified traffic that is not likely to convert, reducing budget waste. Read more on how to use negative keywords in Britnee Berman’s post, Why and How to Use Negative Keywords.

Phrase Match: Phrase match keyword targeting will display your ad on searches that include the meaning or intent of the keyword, even if the meaning is only implied through the search. Phrase match may also expand to include keywords that are similar to your keyword or have similar meanings. While this is a lot more accurate than broad match, phrase match keywords should still be maintained so that the budget is not wasted on unrelated searches. Alex Patt writes about competitor terms and phrase match in this blog post.

Quality Score: Ad platforms use a metric called quality score to calculate the quality and relevancy of your ad through a combination of your CTR, use of relevant keywords, landing page quality, ad copy, and account performance. Quality score is one of the factors that contribute to how your ad is ranked and positioned in search results. 

Remarketing: Also known as retargeting, remarketing is the process of showing repeated ads to users who have already interacted with your business, such as previous converters or users who have visited your site. Get more in-depth information on remarketing on Jeremy Quinones’ blog post, How to Use Standard and Dynamic Remarketing.

Return on Ad Spend (ROAS): ROAS is, essentially, your return on investment. It is the amount of revenue generated from ads divided by the amount of money spent on advertising. 

Search Engine Results Page (SERP): The SERP is the page the user sees after they complete a search through a search engine, which displays the paid and organic search results for that query. 

Search Query Report (SQR): An SQR is a detailed report that shows what searches your search ad has appeared on with any associated data, such as impressions, clicks, cost, and conversions. It is important to monitor your search query reports so that you know where your ads are showing and whether they are relevant searches. This is a good opportunity to find negative keywords to help optimize your campaign. Read more about The Importance of Search Query Reports in Google Ads and Microsoft Ads.

Mastering PPC terminology is fundamental to laying the groundwork for successful digital advertising strategies. This guide equips you with the essentials to navigate advertising platforms, optimize ad spend, and target the right audience. 

Remember, the fast-paced PPC landscape continually evolves, and keeping up-to-date with emerging trends is key. Understanding basic terms is a good starting point as you build a PPC career.