Google Ads Terms To Know: Ad Rank, Auction, CPC…
When you approach digital marketing and Google Ads, there are a lot of letters and phrases that you feel you ought to know. Like any business, marketing professionals have their shorthand for describing possible actions and concepts. The following are the most common terms in use:
AdRank
Ad Rank is a calculated number that lets Google Ads rank potential adverts for a position on Search of Display in order of preference. The highest value wins the spot.
Your Ad Rank is not about how much you are willing to pay for your ad to show, although that does have an influence.
Your Ad Rank is your maximum price per click multiplied by your quality score. The business with the highest number gets onto the page.
The Ad Rank is a new calculation every time a potential placement arises. It is about choosing a winner from all the competing ads.
Bidding
Bidding is the process of setting the maximum amount you are willing to pay for your google ad to appear on a page.
Bidding divides broadly into manual or automated. The type of bid strategy you opt for depends on your goals.
Manual bidding is where you set your maximum bid price for ad groups and placings on a cost per click or a cost per view basis.
Automatic bidding is where Google follows and implements your strategic direction. Automated bid strategies include:
CPA – Cost Per Acquisition – how much to buy a new customer?
ROAS – Return on Ad Spend – how many conversions for the money?
Maximum conversions for the daily budget with careful placement.
ECPC – enhanced cost per click on search and display.
Most Clicks for a daily budget if this is your preferred outcome.
TSPL – Target Search Page Location – when you want to be first by preference.
Target Outranking Share – your bid is automatically higher than the competition.
CPM – Cost per thousand impressions – pay for the view on the display network.
CPV – Cost per view of your video ad.
Target Impression Share – always shown with specified keyword.
Campaign Type
A military campaign is a series of actions to achieve a target. A marketing campaign is similar – you place ads to obtain a business goal.
The type of campaign approach you choose decides where and how your ad appears.
There are five places (campaign types) for your Google ad.
Search network
Display network
Video (YouTube)
Shopping
Universal Apps
Where you place your ad, informs your style of google ad and the goals you hope to meet.
Click-Through Rate
CTR or Click Through Rate is a ratio of the number of people who clicked on your ad to the number of people who viewed your ad. In other words, an estimate of the effectiveness of your ad in getting people to interact with it.
CTR affects your quality score, and that impacts on your Ad Rank. It also decreases the amount you pay per click. Generally, a high CTR is desirable. In Google Ads the average CTR is 1.91% (search) and 0.35% (display). Remember, in PPC – you spend your budget when people click.
Cost Per Click (CPC)
The maximum price per click you set in the budget is not the amount you pay. Sometimes it is, but often the amount you pay – the cost per click is less. CPC and PPC (Pay Per Click) are two interchangeable terms, but PPC is the type of payment method, and CPC is what you pay.
The amount you pay is calculated on a formula and depends on the AdRank of the competing ad below yours, divided by your quality score plus $0.01. It is never more than your maximum.
CPM
The initials represent Cost Per Mille – you pay for every 1,000 impressions you receive. Mille means 1,000 – think mille-feuille, a cake with a thousand layers. An impression comes from the old-style billboards, where the price depends on the potential number of people seeing the poster.
Potentially CPM is the best strategy for building brand awareness. You pay for each block of 1000 shows on Google Display Network. The price for google ads by CPM is less than PPC because you pay when the ad is visible.
Conversion Rate
A conversion is when someone takes action on seeing your ad – they call you or buy something. The conversion rate is a ratio of the number of conversions to the number of interactions with your ad.
Most businesses aim for the highest conversion rate for the least marketing spend. The conversion rate forms part of your quality score. Tracking conversions is part of Google Analytics, and you can compare your conversion rate to the average conversion rate of 4.4% (Search) and 0.57% (Display). Individual industries have different average conversion rates.
Display Network
Google Ads partners with third parties through Google AdSense to display Google Ads on web pages – as banners and in ad boxes.
The google ads a person sees on a website depends on relevance and are presented in appealing formats because these people are not actively shopping. Google Display Ads cost less than Google Search Ads because they have a lower conversion rate.
Ad Extensions
An extension expands the size of an Ad by giving additional information. Extensions are free and display when Google predicts they are useful to the searcher. Available extensions relate to:
Location – Where you are for a customer visit.
Affiliate Location – Where to buy your products.
Call out – extra information like free delivery.
Call – contact number or button.
Sitelink – connect to more information.
Price – browse product costs
Apps – encourage download.
If two ads have the same Ad Rank, then the one with the more useful extensions gets priority for display. Ad extensions increase both CTR and conversions, plus they occupy more space, so your Google Ad is more visible on the page.
Keywords
Keywords and phrases are the words and phrases that searchers use when looking for items on the internet. The precise language depends on the user’s device – people search differently by voice than by text.
The keyword indicates the intentions of the searcher – the goal of their search. Keywords also show how relevant your ad is to that searcher. Although you are paying, Google’s primary goal is to give the searcher the best experience.
Google Ad manager accounts give you access to a keyword research tool that highlights the most relevant keywords for your ad placement. Popular keywords cost more because of increased competition. Specifically, targeted keyword phrases increase the possibility of your Ad winning the auction by reducing the competition and increasing your relevance.
Pay Per Click (PPC)
Pay per click is a way of calculating the payment trigger for Google Ads. When someone clicks on your ad, you pay a fee. The amount you pay depends on the Cost per Click and calculated at the point when the ad shows on a Search or Display page.
The benefit of PPC is that you only pay when someone interacts with your ad. You know that each payment relates to a person who was attracted to that marketing message.
Quality Score
Your quality score depends on three main factors:
Relevance to the searcher – 22%.
Estimated CTR – 39%
Landing page experience – 39%
Google uses a high Quality Score as an indication that your ad, keywords, and website will give the searcher the experience they expect from their search – you have the product, service, or information, and you are in the right place to meet their needs.
Google rewards your high Quality Score with more visibility (higher Ad Rank) for less cost (lower CPC).
The most straightforward way to improve your Quality Score is to be specific and consistent. Your ad and landing page should match the keyword phrase – don’t advertise Father’s Day gifts and have a landing page devoted to Mother’s Day.
Interested in partnering with an agency to get a Google Ad Campaign started?
Connect with a Varga Adwords Expert regarding a custom strategy today.
