Using Google AdWords for the first time will introduce you to some new terminology. Here are a few of the most commonly used AdWords terms:
The keywords you choose are the terms or phrases you want to prompt your ad to appear. For example, if you deliver fresh flowers, you can use "fresh flower delivery” as a keyword in your AdWords campaign. When a Google user enters "fresh flower delivery" in a Google search, your ad could appear next to the search results.
Like keywords, placements are another way for you to control where your ads appear. A placement is usually a website where you'd like your ad to appear. For example, if you select www.example.com/sports as a placement, your ad could appear on that site.
A graphical ad, which can be static or animated, that runs on the Google Display Network. Also called a display ad.
Campaign & Ad Group
AdWords accounts are organised into campaigns and ad groups. You start with one campaign, which has its own daily budget and targeting preferences. You can have multiple campaigns running and might choose to create one campaign for each product or service you want to advertise. Within each campaign, you have one or more ad groups, which are sets of related ads, keywords, and placements.
The number of impressions is the number of times an ad is displayed on Google or the Google Network. Monitor your impressions to see how many people your ad is shown to.
If a customer sees your ad and clicks on it to learn more or to do business with you, it is recorded in your account as a click. Monitor your clicks to see how many people choose to enter your website from your ad.
Clickthrough Rate (CTR)
Your clickthrough rate (CTR) is a metric that helps show how your ads are performing. The more relevant your ads are, the more often users will click on them, resulting in higher CTR. The system calculates your CTR as follows: Number of ad clicks/number of impressions x 100.
Under the cost-per-click (CPC) pricing model, AdWords charges you for each click your ads receive. You won't incur any costs if your ad is displayed and users don't click it. CPC bidding is the default for ads running on Google and the Search Network. Most advertisers also choose it for their campaigns that focus on getting a direct response from their audience, whether a sale, sign-up, or other action.
Maximum cost-per-click (maximum CPC)
The highest amount that you are willing to pay for a click on your ad. You can choose to set a maximum CPC for individual keywords or for all the keywords within an ad group.
Cost-per-thousand impressions (CPM)
With some campaigns, you can choose to pay for views of your ad rather than clicks. The maximum CPM is the most you're willing to pay for each thousand impressions, or views of your ad. CPM bidding is only available for campaigns that target the Display Network and not Google search or search partner sites.
Quality Score is the basis for measuring the quality of your keyword and ad and determining your cost-per-clicks (CPCs). Quality Score is determined by your keyword's clickthrough rate (CTR), relevance of your ad text, historical keyword performance, and other relevancy factors. The higher your Quality Score, the lower the price you'll pay per click.
First page bid estimates
Your AdWords account will show a first page bid estimate for each of your keywords. This metric estimates the cost-per-click (CPC) bid needed for your ad to reach the first page of Google search results when the search query exactly matches your keyword. The first page bid estimate is based on the Quality Score and current advertiser competition for that keyword.
An optimisation is the process of creating/editing keywords and ad text (or adjusting other parts of the account) to improve the performance of AdWords ads.