When starting your first Google AdWords campaign you will be introduced to some new terminology. Some of the most commonly used AdWords terms you will need to understand are listed below.
Cost-per-click (CPC): Under its cost-per-click (CPC) pricing model, AdWords charges your account for each click your ad(s) receives. No cost will be incurred if your ad was displayed for a search query but not clicked on by the user.
Quality Score: Quality Score is the basis for measuring the quality of your keyword and ad and determining your minimum bid. Quality Score is determined by your keyword’s clickthrough rate (CTR), relevance of your ad text, historical keyword performance, and other relevancy factors. The higher your Quality Score, the lower your minimum bid and price you’ll pay per click.
Minimum bid: The amount assigned to a given keyword in your account based on its quality (or Quality Score). The minimum bid is usually the least amount you can pay per click in order for your keyword to show ads.
Clickthrough Rate (CTR): Your clickthrough rate (CTR) is a metric that helps show how your ads are performing. The more relevant your ads are, the more often users will click on them, resulting in a higher CTR. Your CTR are calculated as follows: The (number of ad clicks)/(number of ad impressions) x 100.