For newcomers who are looking to use pay per click advertising to gain traffic to a specific landing page, getting to grips with everything that PPC offers can seem quite daunting at first. After all, there are many ways you can optimize a PPC campaign and there are many things to a campaign that you should understand before letting it go live. With this, here are some of the main terminology you will find in PPC, with a description as to what each means for you, the PPC advertiser.
 

CTR – Click Through Rate

The click through rate is the percentage of web users that click onto your advert from seeing it in the search engine results page (SERP). Web users seeing your advert are commonly known as ‘impressions’. Therefore, the CTR is the percentage of impressions that results in clicks onto your landing page.
The higher the CTR, the better. This is because it means your advert is relating well to your web user’s need, if more of them are clicking onto your advert. A high CTR advert will also be more effective as to gaining more traffic in a shorter period of time – this works well for campaigns that change often and quickly based on real world events to profit on.
 

CPC – Average Cost Per Click

The average cost per click is quite self explanatory, where it is a value for the average cost each click onto the advert costs you. In PPC, the CPC you pay individually will fluctaute based on many factors such as:

• Keywords you bid for and against
• Competition from others
• What the web user searched
• Quality score of your campaign

Therefore, the average CPC is a good way of showing you roughly how much your clicks are costing you each. There is no right or wrong answer to how much a click should be worth: it depends on the industry you work in and the value of the conversion.
 

Average Position

The average position is the numerical position of your advert shown on SERPs in the paid search results section. The lower the number (closer to one), the better the results you will see, since adverts that rank closer to one get better exposure and higher CTRs. However, to get to such positions, you will likely have to increase your CPC.
 

Cost per Conversion

The cost per conversion is the numerical value which describes how much it costs your campaign to produce one conversion. It is calculated by how much that is spent on the PPC campaign in a certain time frame, divided by the number of conversions that was achieved during the same time frame. It is not the same as return on investment (ROI), which describes how profitable a PPC campaign is by comparing the cost of the PPC campaign against the revenue generated from its conversions during a certain time frame.
Of course, the cost per conversion is best when it is as low as possible.