Google Adwords Definitions and Metrics
To be an expert at Google Adwords can take years. And getting your head around all the definitions and metrics can be challenging.
Here’s the deal:
To understand this guide, and to get better at Adwords you need to know them. To help you out I’ve compiled a list of the basics that you need to know:
Keywords: are words or phrases that Google uses to match what people search to your ads. Selecting relevant and high-intent keywords is the key to running successful campaigns.
Quality Score: is Google’s measurement of the quality of your ads, keywords and landing pages. The better your quality score, the lower the cost of a click will be. It can also improve your ads position in search results. Quality score works on a scale of 1-10. And it’s determined by your expected click through rate, ad relevance and landing page experience.
A bid: is the largest dollar amount that you’re willing to pay for a click on your ad. Otherwise known as your maximum cost-per-click bid (or “max. CPC”). You may not pay this every time you get an ad click. For example, if your max.CPC is $1, you’ll never pay more than $1 for a click. Your “Avg. CPC” is the actual amount you pay for clicks.
Campaigns: are an overarching group that contains a set of ad groups (ads, keywords and bids). Campaigns share a daily budget, targeting options and other settings. They structure your Adwords accounts around the products and services you offer.
Adgroups: sit under campaigns and contain a set of ads, which share a set of targeted keywords. Each campaign must have one or more Ad groups. And it’s best practice to make each Ad groups keywords hyper related to one another.
Ads: are what are shown above and below the Google search results when your keyword triggers an ad. A text ad has three parts headline text, a Display URL and description text.
A Click: is when a person clicks the blue headline text of your ad in Google search results.
Click through rate: is the amount of people who click on your ad divided by the amount of people who see your ad. Click through rate helps you understand how relevant your ads are to your keywords.
Cost per click, or CPC: is the amount that you pay for each click on your ads. As mentioned above even if you’re maximum CPC is $2 doesn’t mean you’ll always pay $2 it can be less.
Conversion: an action you define as valuable to your business completed on your website from an ad click. For example,when a visitor buys something or completes your contact form.
Cost per acquisition (or conversion): is that amount you spend for a defined action (conversion) on your website from an ad. It’s calculated by dividing total costs by the total number of conversions.