Google Ads terms and concepts

Important Terms
  • Impressions: The number of times an ad is viewed.
  • Cost: The amount of money a campaign spends on paid advertising.
  • Clicks: The number of times your ad was clicked on by a user.
  • Conversion: The specific goal you are tracking (a sale, a view of a high-value page, an email sign up, etc.).
  • CPM (cost per thousand impressions): The ad buyer’s cost to have their ad seen 1,000 times.
  • CPC (cost per click): The ad buyer’s cost per click. CPC can be as low as a few cents or as high as a few hundred dollars, depending on competition, your industry, and audience relevance.
  • Cost per conversion: The ad buyer’s cost per purchase, order, acquired customer, or another conversion goal you’ve set.
  • CTR (click-through rate): The percentage of users who clicked on your ad out of the total number of impressions it received. Your click-through rate is the most significant signal of relevancy in Google’s search auctions.
  • Conversion rate: The number of conversions divided by the number of clicks, expressed as a percentage.
  • Budget: The total amount of money allocated to an ad campaign.
  • Revenue: The total value, in dollars, generated by an ad.
  • Profit: The total value, in dollars, generated by an ad after subtracting expenses, such as advertising costs and cost of goods.
  • ROAS (return on ad spend): Revenue generated from an ad divided by the advertising cost to show the return on that ad. For example, $5 made for every $1 spent yields a ROAS of 5:1.
  • AOV(average order value): The average dollar amount a customer spends on a site. AOV is calculated by dividing the total revenue by the number of orders.
  • CLV (customer lifetime value): The predicted total value of a single customer (sometimes called LTV) for the entirety of their relationship with a company, including future purchases.

Terms and concepts used in Google Ads

  • Campaign: A campaign contains a single advertising objective, such as traffic or conversions, for one or more ad groups. Budgeting is done at the campaign level and if you expect certain things within a campaign will perform differently (better or worse) that’s a good indication it should be a separate campaign.
  • Ad group: An ad group contains one or more ads and your targeting. A good ad group set up has a unique set of ad messages that directly match your targeting.
  • Ad: The creative ( text, image, video, etc.) that users will see.
  • Keyword: The phrase or word(s) a user enters into the search engine.
  • Keyword match type: Keyword match type involves controlling how broad or exact the chosen keywords (synonyms, related searches, etc.) must be to trigger an ad.
  • Negative keywords: If you want to prevent your ad from being triggered by a certain word or phrase, you would add it to your negative keywords list. This helps you exclude similar but irrelevant keywords (e.g. “apple cider” for Apple the brand).
  • Quality score: The relevancy of an ad to the search term or audience being targeted. Generally, the higher the quality score, the lower the cost per click and the better the ad position.