Simple definitions for paid search acronyms
WHAT DOES PPC MEAN? 2
Pay-per-Click is a form of online advertising that focuses on driving traffic
to a website that advertisers pay for on a per click basis.
WHAT IS SEM? 3
SEM: Search Engine Marketing
SEM is simply another name for pay-per-click marketing. It consists of
purchasing traffic to a website. SEM is sometimes used as an umbrella
term to refer to PPC and SEO but in most cases is used to solely describe
WHAT DOES CPC STAND FOR? 4
Cost-per-Click is a mathematical calculation used to represent the
average cost an advertiser pays per click on their advertisement. It
is easily calculated by dividing the total cost by the total number of
CPC = Total Cost/Total Clicks
MAX CPC VS ACTUAL CPC? 5
Max CPC is the bid set as the maximum you are willing to pay for
one click on your ad.
Actual CPC is an average of what you are actually paying for one
click on your ad. Actual CPC is often less than your max CPC bid.
WHAT IS CTR? 6
CTR represents the frequency in which an ad is clicked on after it
receives an impression. To calculate CTR, divide the total number of
clicks by the total number of impressions.
CTR = Total Clicks/Total Impressions
WHAT DOES CPA MEAN? 7
CPA is a representation of how much an advertiser pays per desired
action on site (i.e. a sale or submission). CPA is calculated by dividing the
total ad cost by the total number of actions completed by those ads.
CPA = Total Cost/Total Actions
WHAT DOES ROAS MEAN? 8
ROAS: Return on Advertising Spend
ROAS represents the total amount of ad revenue generated compared to
the total ad spend. This is similar to ROI (return on investment) but
focuses solely on ad spend as opposed to the entire investment made
ROAS = (Total Ad Revenue - Total Ad Cost) / Total Ad Cost
WHAT DOES CRO MEAN? 9
CRO: Conversion rate optimization
CRO is the practice of optimizing a website's design and user experience
in combination with your search marketing ads in an effort to improve
WHAT DOES AOV STAND FOR? 10
AOV: Average Order Value
AOV represents the average amount of revenue generated by an
online sales or transactions. AOV is calculated by dividing the
total revenue generated by the total number of sales.
AOV = Transactions / Revenue
STILL CONFUSED? 11
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