Sometimes we forget that there are some readers that are not as proficient in the SEO world as some of the contributors to this blog. We get emails asking “What does CPA mean?” Well, here’s a little glossary that may help with that:
Broad match. This is the default option. When you include keyword phrases – such as tennis shoes – in your keyword list, your ads will appear when users search for tennis and shoes, in any order – and possibly along with other terms.
Call to action. Ad copy that encourages users to take a defined action. Examples range from "Click here" or "Buy now" to "Enter now to win a free trip to Hawaii" or "Click to download a free white paper."
Clickthrough. The action of clicking an ad element and causing a redirect to another web page.
Clickthrough rate (CTR). The number of clickthroughs divided by the number of impressions, multiplied by 100 and expressed as a percentage. For example, your CTR is one percent if 100 people are shown your ad and one person clicks through to your site. CTRs typically range from 0.5 percent for banner ads to 3.0 percent for text links. Also known as ad impression ratio or yield.
Conversion. A defined action in response to your ad's call to action. A conversion may be a sale, or it could be a registration, download, or entry into your lead database, depending on the goal of your campaign.
Conversion rate. The number of visitors who respond to your ad's call to action divided by the number of impressions, multiplied by 100 and expressed as a percentage. For example, your conversion rate is one percent if 100 people are shown your ad, five people click through to your site, and one person makes a purchase.
Cost-per-1000-impressions (CPM). Pricing based on number of impressions served over a period of time. A $50 CPM means you pay $50 for every 1000 times your ad appears. ("M" is the Roman numeral for 1000.) Also known as pay-per-impression.
Cost-per-action (CPA). Pricing based on the number of actions in response to your ad. An action may be defined as a sales transaction, a customer acquisition, or simply a click. Also known as cost-per-transaction. CPA may also
refer to cost-per-acquisition.
Cost-per-click (CPC). Pricing based on the number of clicks your ad receives. A typical range is 5 cents to $1 per click. Also known as pay-per-click. CPC may also refer to cost-per-customer.
Cost-per-lead (CPL). Pricing based on the number of new leads generated by your ad. For example, you might pay for every visitor that clicks on your ad and successfully completes a form on your site.
Cost-per-order (CPO). Pricing based on the number of orders received as a result of your ad placement. Also known as cost-per-transaction.
Cost-per-sale (CPS). Pricing based on the number of sales transactions your ad generates. Since users may visit your site several times before making a purchase, you can use cookies to track their visits from your landing page to the actual online sale. Also known as cost-per-acquisition or pay-per-sale.
Geo-targeting. The distribution of ads to a particular geographical area. For example, you can use a place name in your keyword, such as "Minnesota multimedia" or "Sacramento farm equipment." Some search engines allow you to
target specific countries – and languages – without using keyword relevance.
Keyword. A specific word, or combination of words, entered into a search engine that results in a list of pages related to the keyword. A keyword is the content of a search engine query.
Keyword matching. Methods of selecting and organizing your keywords to match the user's query.
Landing page. An active web page where Internet users will "land" when they click your online ad. Your landing page doesn't need to be your home page. In fact, ROI usually improves if your landing page directly relates to your ad and immediately presents a conversion opportunity — whether that means signing up for a newsletter, downloading a software demo, or buying a product. Also known as a destination URL or clickthrough URL.
Negative keyword. Negative keywords allow you to eliminate searches that you know are not related to your message. If you add the negative keyword "–table" to your keyword "tennis shoes," your ad will not appear when a user searches on "table tennis shoes." Negative keywords should be used with caution, as they can eliminate a large portion of a desired audience if applied incorrectly.
Paid placement. Guaranteed listing with high ranking among search results, usually in relation to specified keywords. In response to recent FTC guidelines, many search engines clearly identify paid placements as "sponsored links," listing them separately from the editorial portion of the results page. Paid placement programs are typically based on CPC or CPM pricing, with higher overall costs than paid inclusion. Also known as pay-for-placement.
Paid inclusion. Guaranteed inclusion on a search engine's results in exchange for payment, without any guarantee of how high the listing will appear. A paid inclusion appears to the user as an editorial listing rather than as a sponsored link. Paid inclusion pricing is typically based on a flat fee or index fee.
Phrase match. Your ad appears when users search on the exact phrase and also when their search contains additional terms, as long as the keyword phrase is in exactly the same order. A phrase match for "tennis shoes" would include "red tennis shoes" but not "shoes for tennis."
Relevance. A measure of how closely a search result – or a search ad – matches the user's query. Relevance is key to harnessing the power of search advertising. The more relevant your ad, the more likely the audience will be motivated to respond to your call-to-action. At the same time, the relevance of your ad and your ad's landing page can enhance the user's search experience, while irrelevant ads can cause users to ignore advertising altogether.
Return on investment (ROI). The benefit gained in return for the cost of your ad campaign. Although exact measurement is nearly impossible, your clickthrough rate and your conversion rate combined with your advertising costs, can help you assess the ROI of your campaign.
Text ad. An ad designed for text delivery, with concise, action-oriented copy and a link to your website. Because they are not accompanied by graphics, text links are easy to create and improve page download time. Also known as a sponsored link.
