Web Marketing - AdWord Metrics

Question 1

actual CPC? (actual cost per click)

Answer 1

is typically $1- $2.

Because winning an AdWords auction only requires paying $0.01 more than the next highest bidder, Actual CPC will be lower than Max CPC - especially when an advertiser has a high “quality score.”

Question 2

how does the Adwords auction market work?

Answer 2

Question 3

How do Advertisers bid on their keywords?

Answer 3

by setting a maximum cost per click-through,

or Max CPC for each keyword they are interested in.

CPC bidding is also sometimes called pay per click, or PPC.

Question 4

CPC

Answer 4

• “Cost per Click-through” - for ads where the advertiser pays only when a potential customer clicks through o the advertiser’s landing page.

Question 5

ad relevance

Answer 5

• A metric developed by Google that is based on how closely advertisement text relates to the viewers’ original search terms.

Question 6

expected click-through rate

Answer 6

When used to generate a “Quality Score” - Google’s estimate, based on historical data or mathematical models, of the percentage of viewers who will click-through a particular sponsored link.

Question 7

key words -

Answer 7

On Google, the words bid in AdWords auctions

Question 8

landing page experience -

Answer 8

A metric developed by Google that is based on how focused, factual, current, and informative the landing page text is, relative to key word and sponsored link text.

Question 9

max CPC -

Answer 9

The maximum cost per click-through that a Google AdWords bidder is theoretically willing to pay

Question 10

quality score

Answer 10

• A metric developed by Google that combines expected clickthrough rates, “ad relevance” and “landing page experience.”

Question 11

3 most expensive adwords?

Answer 11

$54 - insurance

$47- Attorney

$47- Mortgage

Question 12

when does google get pays from the advertiser?

Answer 12

only when someone click-through a sponsored link to the advertiser’s landing page.

Question 13

how does Ad Rank work?

(how could google rank the advertiser’s link to maximize its profit?)

Answer 13

(CPC bid)(Quality Score) = Ad Rank

Ad relevance

Landing page experience

Question 14

Actual CPC, divided by the conversion rate, is the revenue metric:

Ad Rank

Quality Score

Acquisition Cost

Maximum Cost per Click-through

Answer 14

Acquisition Cost

Question 15

Why is relying upon the Life Time Value (LTV) of a customer when determining web ad spending potentially risky?

1 / 1 point

• Life Time Value is a profitability metric, not a risk metric.
• Life Time Value is a difficult metric to calculate accurately.
• Life Time Value does not take into account the high negative cash flow associated with initial customer acquisition; cash that it may take years to recoup.
• Life Time Value is only useful if the CPC divided by the conversion rate is less than the LTV.

Answer 15

relying upon the Life Time Value (LTV) of a customer when determining web ad spending potentially risky because:

Life Time Value does not take into account the high negative cash flow associated with initial customer acquisition; cash that it may take years to recoup.

Question 16

if two investment opportunities have the same long-term return, we would prefer the one that

Answer 16

doesn’t have the huge range or scatter of returns and is much more consistent.

Question 17

the metric that we use to calculate how clustered together or spread out our returns are is called?

Answer 17

the standard deviation

Question 18

The standard deviation of returns is known in finance as ?

Answer 18

volatility of returns.

a standard measure of risk

the greater the volatility of returns, the riskier an investment is.

Question 19

An investment with a fixed pay-out, like a bond,

that also has effectively zero chance of loss is known as a risk-free investment.

What is it’s volatility of returns?

Answer 19

Zero

Question 20

what is The risk-free rate?

Answer 20

The risk-free rate is the rate for lending without risk.