Paid Advertising: Frequently Asked Questions Answered

Recently I’ve been asked to offer clarification on the definition of paid advertising buzz words and what metrics are considered a successful ad campaign.  In our continuing effort to educate our clients, I’ve answered these common questions.

What are impressions?
An impression is counted each time your ad is shown on a search result page based on the keywords that are associated with your ad. Impressions help you understand how often your ad is being seen. They’re also used to calculate clickthrough rate (CTR), which is helpful in determining the effectiveness of your ads.

What is a clickthrough rate (CTR)?
Clickthrough rate (CTR) is used to measure how often people click your ad after it’s shown to them. It is often used to help determine the effectiveness of an ad. CTR is the number of clicks your ad receives divided by the number of times your ad is shown (impressions).

What is a successful CTR?
With all factors considered in today’s pay-per-click works, a 2% CTR should be deemed good. That said you should always be striving to achieve a higher CTR. A 2% CTR is good but continually improving this metric will only ensure greater success.

How do I get better positioning on a search page against my competitors?
Your ad position is determined by your Ad Rank. Ad Rank is a score that’s based on your bid, the components of Quality Score (an estimate of the quality of your ads, keywords, and landing page). Higher quality ads will lead to lower prices and better ad positions.

To improve your ad position, you can:

1. Increase your bid
2. Focus on improving the quality of your ad copy
3. Improve the quality of the keywords associated with your ads
4. Improve your landing page content

Bottom line, there isn’t an exact science to paid advertising. It requires constant tweaking, modifying, and testing to gauge what is most successful. You can’t simply set it and forget it.