Let’s demystify some of the terms and acronyms that are often used in online advertising to help you better interpret the results of your Ad campaigns and get a better understanding of the entire functioning of online paid marketing.
Let’s get into it.
Action : An action performed by a visitor after clicking on your ad (i.e. clicking on links, sending a contact form, adding to the cart, downloading a guide, making a purchase)
CPA (cost per action) : Budget spent on an action. To calculate this, you simply divide the budget spent by the number of actions performed.
Click : As the name suggests, a click is recorded each time a user clicks on your ad.
Average CPC (Average Cost Per Click) : This indicator gives the average budget spent for a click. To calculate this, you simply divide the cost by the number of clicks.
Conversion : A conversion is an action that is measured and used to optimize campaigns to achieve the desired objective. You determine which actions you want to consider as a conversion (ex: click on a specific landing page, fill out a form, complete a purchase, etc.).
Cost per conversion (or acquisition) : This is the average amount spent for each conversion. To calculate this, you simply divide the cost by the number of conversions.
CPM (Cost per Thousand or Mille) : It represents the cost (budget spent) for the display of 1000 impressions. It is mostly used in Display Ad strategies.
CTA (Call To Action) : This is a visual element that clearly encourages your visitors to take action (Order now, call us, download our guide, etc.). It can take many forms such as text in an ad or a button on a page or a graphic element. In PPC, your ads and landing pages should always include a clear CTA that is consistent with the desired objective.
CTR (ClickThrough Rate) : The clickthrough rate is the ratio between the number of clicks obtained on your ads and the number of impressions. It allows you to measure the effectiveness of the ads or keywords.
Google Ads Display : Type of advertising on Google that relies on the purchase of keywords, themes and interests to target a specific audience. In Display, the ads are in the form of visuals (static or gif) and lead to a website (landing page or application).
Google Ads Search : A type of advertising on Google that relies on the purchase of keywords and the display of text ads that lead to a website (landing page or application).
Impression : An impression is recorded each time your ad is displayed on an ad network. This indicator allows us to know how many times the ad was seen by users.
KPI (Key Performance Indicator) : This indicator allows us to measure the performance of actions taken to achieve a marketing or sales objective.
Keyword : In PPC, a keyword is a word for which one is ready to bid so that it triggers the impression of an ad. However, this is not systematic. Your ad must be competitive enough, meaning it must stand up to your competitors’ ads through its quality and bidding strategy.
Landing page : Page where users land/arrive after clicking on your ad.
PPC (Pay Per Click) : A digital advertising model where the advertiser pays a fee each time one of its ads is clicked. The advertiser pays for targeted visits to its website (landing page or application).
Retargeting : Action of targeting an audience that has already had an experience on your website or has interacted with your ad (visitor, lead or even customer) in order to encourage them to continue an action or to renew a purchase.
Now that you know a bit more about all these indicators, you will be able to better analyze the performance of your paid online campaigns.
Combining your data
Combining all this data is also a great way to draw conclusions on your ads performance and build on your campaign.
If an ad has a high CTR (many clicks) but a low conversion rate (clicks do not lead to concrete actions), it may mean that the ad is performing well but that once on your website, the visitor is not taking a concrete action.
Depending on the objective and the strategy in place, actions can then be taken or the data analysis can be completed with the KPIs of your landing page.
Now that you know the main performance indicators, it will be easier to understand the results of your advertising actions and build a strategy accordingly.
Union PPC has helped many companies increase their awareness and boost their sales via search engines and social media.
Ready to take the next step? Contact us and let us take charge of your campaigns and bring them to the next level.
