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SEM Terminology

CTR – click-through rate

Number of clicks made on your paid ad and number of impression eg. if you have 100 impressions and only 5 people click on it then your CTR is 5%. As you increase the relevance of the keywords in the heading and in the adtext to be relevant to the user then this CTR will go up.

CPA – cost per action

A type of advertising where payment is made based on the action the user performs (eg. purchasing, signing up etc) in relation to a particular ad. This is a common affiliate program model.

CPC – cost per click 

Sometimes this is also referred to as Pay per Click (PPC). The advertiser pays a set price for each time the advert is clicked on. Most text ads displayed by search engines will be billed under the CPC model.

CPM – cost per thousand

This model charges a set fee based on every 1000 ad impressions regardless of whether the user viewing the ad clicks on it or not. An example of this model are banner ads.

Quality Score

Search engines such as google give your ads a quality score. This quality score is based on the keyword click-through rate, the relevance of your ad text, keywords and landing page, as well as, several other factors. The higher your score rating the lower your bidding rate to get those ads seen.

Don’t just put rubbish there to get traffic or your quality score will be reduced and your bidding costs will go up. The search engines will penalize you.

Keywords

Long tail keywords: a keyword phrase that usually consist 3 – 6 words. These keywords are very specific and very targeted. They will not reach a wide audience, but their aim is to reach those users looking for this specific item, product or service eg: ‘italian night course london’.

Short tail keywords: keywords that are more generic and reach a wider audience. Usually these keywords will match a user request who is looking for information but may not have a specific idea of what they want eg ‘night course’.

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