Decoding PPC marketing: An acronym guide for beginners
So you’re just getting started with PPC (Pay-Per-Click) marketing and looking at your latest report lost at what looks like a different language full of confusing acronyms. We’ve all been there. The digital marketing world is full of jargon that can be confusing for beginners. So we’ve put together this handy PPC marketing acronym guide, complete with simple explanations and examples so you can better understand how your PPC campaigns are performing.
A/B Test
A common practice in digital marketing is split testing, also known as A/B testing. This involves comparing two pieces of content, a control (A) and a variant (B), to measure the key metrics and determine which performs better.
A/B Test Example:
In a PPC campaign, you might create two variations of an ad, each redirecting to different landing page URLs. You then track conversions on each landing page to see which performs better.
BR - Bounce Rate
Bounce Rate refers to people who land on your landing page and immediately exit after viewing only one page. The bounce rate is a useful metric for understanding visitor behaviour on your website, but keep in mind a high bounce rate can be a sign of issues with user engagement, but it's not always a negative thing. It depends on the context and the specific goals of your site or page.
Bounce Rate Example:
Your PPC campaign points towards an eCommerce page with a bounce rate of 85%. This would suggest visitors aren’t clicking through to browse the products on your site and therefore you may need to further optimise your landing page.
CPA - Cost Per Action
Cost Per Action, also referred to as Cost Per Acquisition, is the cost of a specific action taken by a user. This can be a click, sale, form submission etc that allows you to see the performance and cost-effectiveness of your ad. A ‘good’ CPA is specific to each business depending on your goals and target ROI (Return On Investment.)
CPA = Total Cost of Campaign / Number of Conversions
Cost Per Action Example:
If you spent £500 on a campaign and got 50 conversions, your CPA would be £500 / 50 = £10. This means you effectively paid £10 for each conversion.
CPC - Cost Per Click
CPC stands for Cost Per Click, which is the amount of money an advertiser pays for each click on their advertisement. CPC is a vital metric to track as it can help gauge the cost-effectiveness of your campaigns and inform budgeting decisions for future campaigns.
CPC = Total Cost of Campaign / Number of Clicks
Cost Per Click Example:
If you spent £500 on a campaign and received 200 clicks, your CPC would be £500 / 200 = £2.50. This means you effectively paid £2.50 for each click on your ad.
CPL - Cost Per Lead
Cost Per Lead is the amount you spend for each qualified lead in your campaign. This is usually defined in your campaign as filling out a form, signing up for a newsletter, downloading a whitepaper, registering for a webinar, etc. The CPL metric is particularly useful for businesses that have a lead generation objective as it allows them to quantify the cost-effectiveness of their marketing campaigns in terms of generating new leads.
CPL = Total Cost of Campaign / Number of Leads
Cost Per Lead Example:
If you spent £1000 on a campaign and generated 50 leads, your CPL would be £1000 / 50 = £20. This means that you effectively paid £20 for each lead generated.
CPM - Cost Per Mile
Cost Per Mile, also known as Cost Per Thousand, is the amount you pay for every one thousand impressions.
CPM = (Total Cost of Campaign / Total Impressions) x 1,000
Cost Per Mile Example:
For instance, if you spent £80 on a campaign and received 200 impressions, the CPM would be (80 / 200) x 1,000 = £400. This means that you effectively paid £400 for every 1,000 impressions that your ad received.
CPV - Cost Per View
Cost Per View is a billing method where an advertiser pays for the number of views or interactions an ad receives. It is calculated by ‘total costs’ divided by ‘number of views.’ Be careful as the definition of a “view” may vary between platforms so make sure you understand the criteria of the platform you are using.
CPV = Total Cost of Campaign / Number of Views or Interactions
Cost Per View Example:
A view on a Youtube ad is anything over 30 seconds. So if your YouTube ad was viewed 200 times and your total costs were £80 your CPV would be £80 / 200 = £0.40. This means you effectively paid around 40p per view.
CR - Conversion Rate
Conversion Rate is the percentage of users who complete a desired action or goal, such as making a purchase, filling out a form, or email sign-ups. Note this is very similar for Cost Per Lead but the key difference is a ‘Conversion’ can be any desired action, even as simple as scrolling on a landing page. You should choose which metric to use and track depending on the goals of your campaign.
CR = (Number of Conversions / Number of Total Visitors) * 100%
Conversion Rate Example:
If your website receives 1,000 visitors in a month and 50 of them make a purchase (or another type of conversion action), your conversion rate would be (50 / 1000) * 100% = 5% This means that 5% of your site's visitors completed the desired action, which in this case was making a purchase.
CRO - Conversion Rate Optimisation
Conversion Rate Optimisation is the strategy of optimising your conversion rate. Monitoring and working to increase your Conversion Rate is a key part of many digital marketing strategies as it's closely tied to the profitability of the business, this metric allows you to report on this.
Conversion Rate Optimisation Example:
A simple CRO strategy might involve analyzing the performance of your landing pages to see where users drop off before making a purchase or completing a form. Then, you might run A/B tests on different headlines, images, or call-to-action button colours to see what improves the conversion rate.
CTA - Call to Action
Call to Action is used to describe a prompt or instruction given to the audience to encourage them to take a specific action. CTAs are typically written as a command or action phrase, such as 'Sign Up', 'Buy Now', 'Download', or 'Learn More'.
Call to Action Example:
You are running an Instagram ad for an e-commerce website using a ‘Shop Now’ CTA.
Helpful tip: Writing a compelling Call to Action is an art in itself. Good CTAs should be persuasive, clear, and aligned with the marketing goals of the campaign. A few starting points include:
- Use a strong action verb, emphasizing urgency, and making it personal.
- Highlight the benefit to the user
- Keep it clear and concise
- Tailor the CTA to the user's stage in the buying process
- Continuously A/B test variations to find what performs best
CTR - Click-Through Rate
Click-Through Rate measures the percentage of users who click on a specific CTA after viewing an ad or webpage. This is a key metric to determine the effectiveness of your content and performance. A high CTR means your ads are relevant and compelling to users, while a low CTR may suggest the opposite.
CTR = (Number of Clicks / Number of Impressions) * 100%
Click-Through Rate Example:
For example, if your ad receives 5 clicks and was shown 100 times, your CTR would be: (5 / 100) * 100% = 5% This means 5% of people who saw your ad went on to click your CTA.
PPC - Pay-Per-Click
Pay-Per-Click is just like it says on the tin you pay a fee each time your ad is clicked. Essentially, it's a way of buying visits to your site, rather than attempting to earn those visits organically through SEO (Search Engine Optimization). The most popular form of PPC is search engine advertising. Advertisers bid for ad placement in a search engine's sponsored links when someone searches for a keyword that is related to their business offering.
Pay-Per-Click Example:
If we bid on the keyword "PPC software," our ad might show up in the very top spot on the Google results page. Each time our ad is clicked, sending a visitor to our website, we have to pay the search engine a fee.
ROAS - Return on Advertising Spend
Return on Advertising Spend measures the revenue generated for every pound spent on advertising. It is a ratio that compares the direct profit made from an ad campaign to the cost of that campaign. The purpose of ROAS is to evaluate the effectiveness and profitability of advertising campaigns.
ROAS = Revenue from Ad Campaign / Cost of Ad Campaign
Return on Advertising Spend Example:
If you made £1000 in revenue from an advertising campaign that cost you £200, your ROAS would be: £1000 / £200 = 5 In this case, you're making £5 for every £1 you spend on advertising, indicating a positive return on your ad spend.
ROI - Return on Investment
Return on Investment is used to assess the profitability of an investment in a marketing campaign. ROI measures the net profit of an investment relative to its total cost, but it also takes into account the indirect costs and benefits. The purpose of ROI is to measure the efficiency and success of an investment.
ROI = [(Gain from Investment - Cost of Investment) / Cost of Investment] * 100%
Return on Investment Example:
If you invested £1000 in a marketing campaign and made £1500 in profit from that campaign, your ROI would be: [(£1500 - £1000) / £1000] * 100% = 50% This means that you made a return of 50% on your investment.
Helpful tip: ROAS and ROI are both important metrics but they serve slightly different purposes and provide different insights. ROAS provides a more granular, campaign-level view of performance, while ROI gives you a higher-level perspective, considering all costs and the broader, long-term impact on your business. Depending on your business goals and marketing strategies, both metrics can be useful in different ways.
SEM - Search Engine Marketing
Search Engine Marketing is a digital marketing strategy focused on promoting websites by increasing their visibility in search engine results pages (SERPs.) This can be paid through PPC or organic through SEO. The purpose of SEM is to drive traffic to websites, increase brand awareness, and generate leads.
Search Engine Marketing Example:
You are a small business running a PPC campaign targeting specific keywords to create brand awareness and drive traffic to your website.
SEO - Search Engine Optimisation
Search Engine Optimisation is optimising a website or online content to improve its visibility and ranking in search engine result pages. SEO involves making certain changes to your website design and content that make your site more attractive to a search engine. It's about understanding what search engine algorithms deem as favourable and tailoring your website to meet these criteria.
Search Engine Optimisation Example:
If you were a Marketing and Design Agency you would want your website to rank highly in search results for “best digital marketing agency” or “marketing agency near me”. You would strategically incorporate these keywords into your website's content, meta tags, and headers to improve your chances of appearing in search results for these terms.
Helpful tip: People often get confused between SEM and SEO.
But in short:
SEO is about growing your visibility in search results naturally over time, without paying for it.
SEM is about buying your way to the top of search results through things like paid ads. It's quicker but costs money.
SEO is often a part of SEM, as SEM includes both paid and unpaid efforts to increase visibility.
We understand entering the world of PPC marketing might seem like learning a new language with its plethora of acronyms and jargon but we hope that this blog has helped you decode the most commonly used acronyms. Remember, understanding these terms is just the first step; applying this knowledge to improve your campaign's performance is the ultimate goal. And don't worry if you're still a bit unsure we are here to help, just get in touch.
You may also be interested in our blog “Popular Terms in PPC Marketing Explained.” which further unravels the mystery of PPC marketing acronyms and terms! Read the blog here.
For a more in-depth guide to PPC Marketing Acronyms and Terms specific to Google Ads, Google has their own glossary here.
We have also created a handy PPC Calculations Cheat Sheet which you can download below. Right-click on the image and choose 'Save Image As'.
