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PPC Terms

PiticStyle Web Promotion Jun 18, 2008

  • PPC TermsCPC: Cost per click. The actual dollar value you pay. Some people reserve CPC for banners that charge by the click and PPC for sponsored ads on search engines.

  • CPM: Cost per thousand impressions. Allows you to compare costs from one ad venue, or type, to another. If an ad costs $500 for 10,000 impressions, your CPM is $500 divided by 10, or $50. Because most PPC sites also provide the number of impressions, you can compute CPM for your PPC campaign.

  • CTR: Click-through rate. The number of clicks divided by the number of impressions. Expect costs for a click-through to be higher than costs for an impression.

  • Conversion rate: The number of actions taken or purchases made divided by the number of clicks received.

  • Landing page: The destination page on your site that viewers see when they click your ad.

  • Paid inclusion: Payment to be listed in a search engine or directory, often for faster review orguaranteed listing. Generally, the search engine or directory charges a flat annual fee or monthly charge per URL, although Yahoo! Express uses a combination of flat fee plus PPC.

  • PPC: Pay per click payment method

  • PPA: Pay per action. Payment is made only when a prospect takes a prespecified action (such as makes a phone call, signs up for newsletter, completes a purchase). Acts almost like a commission. Expect to pay more per transaction unit for PPA than for PPC. That's reasonable, because your prospect has prequalified by taking an additional action toward purchase.

  • ROI: Return on investment. For PPC, refers to the profit made divided by the cost of the PPC campaign. It might be more useful to compute ROI over a whole program than for an individual product. Sometimes, you deliberately lose money or break even on one product (called a loss leader) to draw customers into a store, only to make more on sales that follow.

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