Do I Understand Google Adwords Terminology

[hiebing]

I have ten keywords. Impressions are the number of times the ad comes up based on a keyword search. Clicks is how many people click on it to my page. CTR is the Click Through Ratio, and CPC is the cost per click.

My max CPC is $5.00 - the average CPC is always less than $5.00. How is the CPC calculated?

And for keywords that get impressions but no clicks, how long before you drop them?

Just want to make sure I'm interpreting all this correctly, and any advice from the pros would be appreciated. Thanks!

[Jim Hutchinson]

Hi Sharon

While I am not an AdWords expert, a little digging showed that the CPC is calculated by dividing your daily limit by the number of clicks for each keyword.

If your daily spending limit is $100 and you get 100 clicks, then your Cost Per Click (CPC) is $1.00.

If your ad is shown 1,000 times and gets clicked 100 times, then your click-through ratio is 10%.

If your keyword is getting impressions without clicks, then maybe it is your ad that should be changed. It could be something as simple as changing a single word. Except for holidays, I would change the ad every 2 days until it got clicks. By the end of a week, you will know if that keyword should be dropped or kept.

More info and discussions can be seen at the Google AdWords Help forum

Hope that helps.

Jim

[mike1115]

Do you mean how does Google figure out the CPC and charge you? It’s a combination of a lot of things. Your quality score, targeted and tight ad groups, targeted landing page, age of your Google account, relevancy of your landing page to the keyword, is it going to a thin affiliate site or a content rich site, impressions served on your ads, your CTR, and a lot of other things that Google doesn’t tell us but there are a lot of blogs by PPC people that are reverse engineering it to get clues as to why and what works.

If the keywords are not closely related to the landing page and site then Google will increase the bid price. If everything is targeted and people click through then Google will lower your bid price.

If your keyword is getting impressions but not clicks, try doing what Jim wrote above, or it could be that the keyword is not a “buy” type keyword and people aren’t in buying mode when they search on it, or the landing page needs to be optimized. Test everything, don’t fly blind