Pay Per Click Terms

These terms are commonly used in pay per click advertising networks. Understanding the terminology will assist webmasters in determining how they should set up their campaigns.

Ad Inventory - The types of advertisements that are available in an advertising network.

Bid - Bid refers to the amount that each advertiser is willing to pay for each click.

Click Fraud - Click Fraud involves sending fraudulent clicks to a PPC listing. The clicks can be artificially generated via automated technology methods (bots) or via manual clicking. The intent of the fruad may be to raise money for the site hosting, ad space, or to financially hurt the advertiser. *Yahoo encourages users to contact them if they see a dramatic change in the number of clicks, the click-through rate, or if there are discrepancy in the server logs and number of reported clicks.

Conversion Rate - The number of clicks that result in the visitor taking the desired action. Usually this the number of users that end up purchasing.

CPC (Cost Per Click) - Amount of money the advertisers is willing to pay per click

CTR (Click Through Rate) - The number of clicks divided by the number of impressions a specific keyword or ad received.

Impressions - The number of times an advertisement appears.

Max Bid - The most that an advertiser is willing to pay for each click.

PPC (Pay Per Click) - Advertisers only pay when their advertisement is clicked.

ROI (Return on Investment) - The amount of money made when compared to the amount spent for a specific advertising model.

Tracking URL - A specialized url that incorporates the keyword search query that resulted in the traffic. Marketers use tracking URLs so that they can track what keywords or phrases result in traffic, and convert to sales.

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