Paid Search Terminology

 

Lead   A click to the site from a Pay Per Click ad.

CLR  Number of clicks divided by the number of impressions. CLR is very important to paid search. A good CLR can get an ad a higher position and lower cost per click. Less general terms, the correct keyword "match type" (Broad, Phrase or Exact) and targeted ad can go along way to improve your CLR. The higher the better as long as you are getting the desired results, conversions.

Conversion  An online Sale or generated lead.

Conversion Rate  The rate in which Leads are Converting into Sales.

CPA  Cost Per Acquisition or Cost Per Customer.

Cost  Actual Spend of Advertising Channel being tracked.

Revenue  Actual dollar amount as a result of the online sales transactions.

Avg. Rev. Per Sale  Total Revenue divided by the number of Conversions.

ROAS  Return On Ad Spend. ROAS = Profit from online sale/ad spend. Profit =$100.00 and your ad spend was $50.00 your ROAS = 100.00/50.00=200%. 100% ROAS is breakeven. Less than 100% the ads are costing money. Always use your "profit margin" to calculate ROAS. If you use "total revenue" you may look good on paper but that will not be the true picture.  ROAS only measures what the search engine tracks. True ROAS also takes into consideration, phone orders,  the lifetime value of a customer and the value of branding.

CPL  Cost Per Lead or Cost Per Click

 

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