Adwords Terminologies, Nomenclature & Formulas

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Adwords Terminologies, Nomenclature & Formulas



What are seed keywords?

Seed keywords are that keywords you use to begin determining keywords. that keywords are the words which will be used as our base keywords. The long tail keywords are used to form modifying the seed keywords.

Example: The keywords you enter into the keyword planner to determine more keywords.

ROI (Return on Investment)

Definition: How much profit you’ve made from your ads compared to how much you’ve spent on those ads.

Formula: ROI = (Revenue – Cost of goods sold) / Cost of goods sold.


Let’s say you have a product that costs $100 to produce, and sells for $200. You sell 6 of these products as a result of advertising them on AdWords. Your total sales are $1200, and your AdWords costs are $200. Your ROI is ($1200-($600+$200))/($600+$200), or 50%.

In this example, you’re earning a 50% return on investment. For every $1 you spend, you get $1.50 back.

ROAS (Return on ads spend):

Definition: ROAS (Return On Advertisement Spending) is a KPI (Key Performance Indicator) that is used to determine media effectiveness. It can be calculated for online and offline media campaigns. ROAS can also focus on campaign elements such as Google AdWords Ad Groups or even individual keywords within PPC advertising.


Let’s say you’re measuring sales for your online women’s shoe store and you want to optimize your bids based on the value of a shopping cart total. Your goal is $5 worth of sales (this is your conversion value) for each $1 you spend on ads. You’d set a target ROAS of 500% – for every $1 you spend on ads, you’d like to get 5 times that in revenue.

Here’s the math:

$5 in sales ÷ $1 in ad spend x 100% = 500% target ROAS

Then, AdWords will automatically set your max. CPC bids to maximize your conversion value, while trying to reach your target ROAS of 500%.

CTR (Click Through Rate): Click-through rate (CTR) is the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement.

CTR = Clicks/Impressions

CPA (Cost Per Action):

CPA bidding is a method of paid advertising that allows you to tightly control your advertising spend. Rather than paying Google for every time someone clicks on one of your ads (as with CPC bidding), CPA bidding only requires you to pay for each conversion, a metric you define yourself when you set up each campaign.

To maximize results and give machine learning algorithms enough data to make informed bidding decisions, we recommend that you have at least 30 conversions in the past 30 days.

CPA = Cost/Conversions

Cost Per Action (CPA): How to Lower Your CPA in AdWords

Like most things PPC, your CPA is directly affected by your Quality Score, Google’s all-important metric based on the quality of your keywords, ads, and landing pages.  In general, the higher your Quality Score, the lower your costs – in fact, for each point your score is above the average Quality Score of 5, your CPA will drop about 16%.

Google AdWords Bidding Strategies: The Complete Guide

Manual CPC

This is the classic setting for having total control over bids with a focus on driving click traffic. AdWords will take the ad group default bid first, unless a different bid is manually specified at the keyword level.

Automatic CPC

In this setting, advertisers focus on driving click traffic but give AdWords control over individual CPC bids. Set a daily budget and AdWords automatically adjusts your bids with the goal of getting the most clicks for the budget. With automatic bidding, AdWords does all the work to get the most clicks.

There is also the option to set a CPC bid limit. Setting a limit can help control costs, but might also potentially limit clicks.

Enhanced CPC

This bidding option is for the conversion-focused advertiser. Conversion tracking must be enabled, so that based on conversion tracking data, AdWords will automatically increase or decrease CPC bids to drive most conversions.

Bids can be raised up to 30 percent for clicks that are more likely to lead to conversions. Bids are lowered for clicks less likely to convert.

CPA Bidding

With a focus on conversions at a specific cost-per-acquisition, use CPA bidding. This is also known as Conversion Optimizer.

Flexible Bid Strategies

More options compared to enhanced CPC and Conversion Optimizer options that were previously available and also allow you to mix and match bid rules across campaign and ad groups.

There are five types of flexible bid strategies:

  1. Maximize clicks:This is a flexible version of the Automatic CPC bidding strategy.
  2. CPA bidding:This is a flexible version of Conversion Optimizer used in the target CPA (average CPA) capacity.
  3. Enhanced CPC: Flexible version of the existing enhanced CPC capability.
  4. Search page location:AdWords will increase or decrease bids to target a top-of-page or first page position with ads. This bid strategy works with keywords, ad groups, and campaigns targeting the Search Network only. This doesn’t specify a position on the page (e.g., an advertiser can’t choose to be in third position on the page).
  5. Return on ad spend (ROAS): AdWords predicts future conversions and values based on conversion values advertisers set up. To target ROAS 30 conversions in 30 days is required. Used for Search Network only or the Search and Display Networks. AdWords will try to reach the ROAS targets across all keywords, ad groups, and campaigns.

Negative Keywords: A type of keyword that prevents your ad from being triggered by a certain word or phrase. It tells Google not to show your ad to anyone who is searching for that phrase.

Negative Broad: if used correctly, this can filter out a lot of different variations. If a keyword is Negative Broad, then your ad will not show anytime the entire term is used within a search query. For example, if your negative is video game, your ad will not appear for someone searching for game video or video game deals. BUT know that this will not prevent ads from showing for variations of the word. That means that if you want to exclude both video game and video games (plural version) you need to add in BOTH as negative keywords. Also, Negative Broad match will not restrict ads from showing if someone searches on only one of the words. So if someone searches for board game you will still appear, as the word game on its own is not a negative.

Negative Phrase: this match type works similarly to traditional search terms in that it will exclude the phrase. A negative keyword is designated as phrase match when quotations are used around the phrase. If someone searches for only one of the terms in your phrase, your ad will still appear. For example, if your negative is “fiction novels” and someone searches for history novels, your ad will still appear. This also means that if additional words are used in the search query, such as fiction romance novels, your ad will still appear as fiction and novels are not next to each other in the search query.

Negative Exact: this match type will eliminate very little traffic as it only excludes searches for the exact term(s) in the order they are used. To designate a negative term as Negative Exact, include [ ] around the term. If someone uses any other terms in his or her search, your ads will still appear. For instance if your negative is [green sweater] and someone searches for ladies green sweater your ad will still appear as it does not match the negative term exactly.

Ad Delivery:

If you’ve chosen a campaign type with “All features” enabled, you have two options for ad delivery methods: “Standard” (the default setting for all campaigns, and optimizes your budget by spending it throughout the day) or “Accelerated” (which is not recommended for most advertisers).

Ad rotation is the practice of showing multiple advertisements in a single location on a web page. Ads may be rotated with each new page load, within a single page load, or both. Because the ads are placed in the same location, they are typically the same format.

What is ad scheduling?

Scheduling Specific Times: You can set an ad schedule for particular hours of the day, or specific days of the week. In most campaigns, you can include bid adjustments for particular days or times. To determine when you want your ads to show, you may want to run an hourly report.

Opportunity Tab

  • Think of the tab as a personal assistant who customizes opportunities for your account. It can help you discovernew keywords, improve your bids and budgets, and more.

What the Opportunities tab helps you do

If you have an account history to work with, the tab can help you:

  • See performance estimates based on historical data

While the Opportunities tab doesn’t predict whether your ads will do well, it does tap into a lot of data from the past like your campaign performance and what people search for on Google, to give you an idea of how each opportunity might improve your performance.

  • Make improvements without spending a lot of time

The Opportunities tab looks for opportunities for you, so that you can focus on making decisions instead of conducting research.

  • Keep your campaigns fresh

Have you been using the same keywords for awhile? When’s the last time you changed your bids? The Opportunities tab can help you keep your account fresh.

Dynamic Search Ads

How they work: Use the content of your website to target searches instead of keywords. They look like text ads, but headlines are dynamically generated from the search phrase and your website content, and landing pages are dynamically selected from pages on your website.

Ad Extension

  • Location: Extend my ads with location information 
  • Sitelinks: Extend my ads with links to sections of my site
  • Call: Extend my ads with a phone number
  • App: Extend my ads with a link to a mobile/tablet app
  • Reviews: Extend my ads with reviews
  • Callouts: Extend my ads with additional descriptive text
  • Structured Snippets: Extend my ads with structured snippets
Digital Marketing Professional
After completion of my BE (Computer Science) in the year 2009. I started my career with as a Data Analyst. There I explored myself in the field of Analytics & performed many operational tasks in SAS & SPSS, afiliate Marketing, SEO & SEM. Currently I am working as Inbound marketer with new strategies in marketing rather than following the traditional methods.

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