Pay Per Click Definitions

Pay-Per-Click marketing has become an online phenomenon,
with marketers only paying for traffic they receive. As
Internet marketing has evolved, pay-per-click is seen by
many as the middle ground between paying per impression and
paying per sale. Advertisers only pay when they receive
traffic that may or may not be targeted.

The pay-per-click advertisements are usually displayed with
the advertisement from the highest paying bidder in the top

Navigating the complex web of Internet marketing, publishers
and marketers are often confronted with terms that seem
foreign. This simple guide will assist marketers in
navigating the Pay-Per-Click marketing model.

Bid – The amount that an advertiser is willing to pay for a
click on a specific keyword.

Budget – The amount of money that an advertiser sets aside
for an advertising campaign. Different publishers allow for
advertisers to set daily, weekly or monthly budgets.

Clickthrough Rate (CTR) – The percentage of clicks on a
link. This is usually a percentage based on the total number
of clicks divided by the number of impressions that an
advertisement has received.

Conversion Rate – The relationship between visitors to a web
site and actions considered to be a “conversion”, such as a
sale or request to receive more information: the percentage
of people whose clicks have resulted in a sale or desired
action in relation to the total number of clicks on an

Cost Per Click (CPC) – The cost or cost-equivalent paid per
click-through to an advertiser’s website.

Cost Per Thousand (CPM) – The amount an advertiser pays for
one thousand advertisement impressions, regardless of the
consumer’s subsequent actions.

Delisting – The removal of a listing as a result of inaction
or poor performance.

GeoTargetting – An advertisement targeted at a specific
geographical region, area or location.

Impressions – The number of times an advertisement is viewed
by web surfers.

Keywords – Search terms or phrases that are related to an
advertisement or ad copy.

Landing Page – The specific web page that a visitor
ultimately reaches after clicking an advertisement. Often,
this page is optimized for a specific keyword term or

Linking Text – The text that is contained within a link.

Pay Per Click (PPC) – Advertising model in which advertisers
pay for click-throughs to their website. Ads are served
based on keywords or themes.

Rank – How well a particular web page or web site is listed
in a search engine or advertising results.

Return On Investment (ROI) – The percentage of profit that
results in a marketing or advertising campaign. Naturally,
advertisers want the amount of money made to exceed the
money spent.

Understanding the above terminology will help marketers
navigate the pay-per-click advertising model, which has
emerged on the Internet and become one of the leading
advertising models in the online world.

Sharon Housley manages marketing for FeedForAll software for creating, editing, publishing RSS feeds and podcasts. In addition Sharon manages marketing for NotePage a wireless text messaging software company.