AdWords is an online advertising tool. Google AdWords allows you to target a specific audience, location or customer that might be interested in your product or service. You are also able to filter out the online audience whom you would not want to advertise to.
AdWords is an outstanding tool to use when you want to increase the visibility and presence of your business. Like with any new product, it can be overwhelming when a first-time user reads all the technical terms. Hosting101 provides a Google AdWords Management service.
In this blog, I would like to give you some insight into the technical terms and abbreviations, writes Simonè Groenewald, Hosting101’s Google AdWords expert.
What do the technical terms mean?
Google AdWords advertising is all about the online presence of your business. See an example of one of Hosting101’s clients’ ads below.
You only pay for every time that someone physically clicks or opens your advertisement, this is your cost-per-click (CPC). With a CPC bidding campaign, you would set a maximum cost-per-click (max. CPC) which is the maximum that you are willing to pay per click on your ad.
Your actual cost-per-click (CPC) is the final amount that you pay for a click on your ad. Actual CPC mostly costs less than your maximum CPC as you pay what is minimally required for your ad position to be at the top, or to keep its higher ranking. Your actual CPC may be higher than your max CPC if, for example, you have enabled Enhanced CPC or if a bid adjustment has been set.
Bid adjustments are used to have your ad show more or less frequently based on your targeted audience. You can use bid adjustments to have your ad show more or less frequently, for example, to an audience that searches for your product that uses mobile devices. Bid adjustments can be used on your campaigns or ad groups.
You often pay much less than your maximum cost-per-click (max CPC) bid. This is the most that you would typically be charged for per click.
The maximum cost-per-click bid (max. CPC) is the highest amount that you are willing to pay per click on your ad.
A click on your ad may lead to a conversion. A conversion would be when a potential customer interacts with your ad. Clicking on your ad, and viewing your video ad would be considered an interaction with your ad. An action could potentially be taken, after an interaction that would be of value to your business, for example, an online purchase was made or a call has been made to your business from a mobile phone.
Your clickthrough rate (CTR) is a ratio that shows you how often people who have seen your ad, clicked on your ad. Your CTR is one of the many ways to determine how well your ads and keywords are performing.
You are charged an average amount for a conversion from your ad. This is your average cost-per-click (CPA) and is calculated by dividing the total cost of conversions by the total number of conversions for your ad. Performance targets can be used to set an average CPA target for all your campaigns.
Performance targets is another excellent way to improve your business. You set a goal for your ads, for example, HearX-SA is one of Hosting101’s clients that had a performance goal. Within the first week of signing up for Hosting101’s Google AdWords Management service, HearX-SA’s performance goal was to have 100 app installations. Hosting101 created a Display Advertising Campaign for HearX-SA. This campaign uses videos ads or image ads, and within the first week of the Display Ad Campaign HearX-SA exceeded their performance goal by achieving 382 app installations.
Your return on investment (ROI) can also be calculated. ROI is how much profit you have made compared to the amount that has been spent on your ads. You will need to track your conversions to assist in measuring your ROI.
Enhanced cost-per-click (ECPC) is a bid strategy that can help you to get more conversions while your cost per conversion is reduced or maintained. ECPC helps to maximize your conversions by adjusting your CPC. Manual bidding is combined with a Smart Bidding strategy, for example, Target CPA or Target ROAS. EPCP raises your manual bids when an interaction seems more likely to lead to a conversion on your website. Your bids will also be lowered for situations that seem less likely to lead to a conversion.
Target return on ad spent (ROAS) allows you to bid based on a target that you have set. Target ROAS is an AdWords Smart Bidding strategy that assists you to get more conversion value or revenue at your target.
With the correct strategies and targets, your Google AdWords campaign should thrive. For new Google AdWords users, managing and setting up your first campaign could be overwhelming. If you think that managing your own Google AdWords campaigns is too much effort, Hosting101 has a fantastic Google AdWords Management service which you can make use of.