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PPC is Pay Per Click. Then means though your ad may be shown thousands of times, you only pay when an interested web surfer clicks on your ad. Other models include PPA, or pay per action. You can also choose to pay for exposures (CPM), not clicks.
PPA is pay Per Action. A goal is assigned and you only pay when a user completes this goal. This requires more complex tracking on your website. A common form of PPA is having the customer fill out a request form, or make a purchase.
CPM is Cost Per Mille, or Cost Per Thousand. Mille is the Latin word for Thousand. The "M" is a Roman numeral. This was the pricing standard for web banner displays before Google arrived and introduced the Pay-Per-Click model. Now Google also offers CPM priced advertising. CPM can also be used to show an overall cost rate when CPC is combined with CTR (Click Through Rate).
CPC is Cost Per Click. That is how much you pay each time someone clicks on your AdWords ad and is taken to your website. Typical CPC runs from a nickel to about $3.00. The price can vary based on competition and the Quality Score of your ad campaign.
CTR stands for Click Through Rate. CTR is expressed in percentages. For instance a CTR of 1% indicates a click per 100 impressions of an advertisement.
Google AdWords is a way for advertisers to target customers on the web by subject matter and by geographic location. The budget is very controllable and gives a much higher ROI than traditional advertising. Adwords advertising may be text ads, graphical ads, and other formats.
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