Pay-Per-Click Advertising Glossary: Every PPC Term Explained

PPC advertising has its own vocabulary. Understanding these terms is essential for managing campaigns effectively or evaluating agency performance.

CPC (Cost Per Click): the amount you pay each time someone clicks your ad. CPC varies by keyword competition, quality score, and bid strategy.

CTR (Click-Through Rate): the percentage of people who see your ad and click it. Calculated as clicks divided by impressions. Higher CTR generally indicates more relevant and compelling ads.

CPA (Cost Per Acquisition): the cost to acquire one conversion — a lead, sale, or other defined action. CPA tells you whether your campaigns are profitable.

ROAS (Return On Ad Spend): revenue generated divided by ad spend. A ROAS of 4.0 means four dollars of revenue for every dollar spent. Target ROAS varies by industry and margin.

Conversion Rate: the percentage of clicks that result in a conversion. Industry averages range from 2-5 percent for search ads. Higher conversion rates mean more efficiency from the same traffic.

Quality Score: Google rating from 1-10 for keyword relevance, ad quality, and landing page experience. Higher scores mean lower CPCs and better positions.

Impression Share: the percentage of available impressions your ads received. Low impression share means budget or bid constraints are limiting your visibility.

Ad Rank: determined by bid amount, quality score, and expected impact of extensions. Higher ad rank means higher position on the search results page.