Web Marketing - AdWord Metrics Flashcards
actual CPC? (actual cost per click)
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.”
how does the Adwords auction market work?
How do Advertisers bid on their keywords?
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.
CPC
- “Cost per Click-through” - for ads where the advertiser pays only when a potential customer clicks through o the advertiser’s landing page.
ad relevance
- A metric developed by Google that is based on how closely advertisement text relates to the viewers’ original search terms.
expected click-through rate
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.
key words -
On Google, the words bid in AdWords auctions
landing page experience -
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.
max CPC -
The maximum cost per click-through that a Google AdWords bidder is theoretically willing to pay
quality score
- A metric developed by Google that combines expected clickthrough rates, “ad relevance” and “landing page experience.”
3 most expensive adwords?
$54 - insurance
$47- Attorney
$47- Mortgage
when does google get pays from the advertiser?
only when someone click-through a sponsored link to the advertiser’s landing page.
how does Ad Rank work?
(how could google rank the advertiser’s link to maximize its profit?)
(CPC bid)(Quality Score) = Ad Rank
Ad relevance
Landing page experience
Actual CPC, divided by the conversion rate, is the revenue metric:
Ad Rank
Quality Score
Acquisition Cost
Maximum Cost per Click-through
Acquisition Cost
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.
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.
if two investment opportunities have the same long-term return, we would prefer the one that
doesn’t have the huge range or scatter of returns and is much more consistent.
the metric that we use to calculate how clustered together or spread out our returns are is called?
the standard deviation
The standard deviation of returns is known in finance as ?
volatility of returns.
a standard measure of risk
the greater the volatility of returns, the riskier an investment is.
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?
Zero
what is The risk-free rate?
The risk-free rate is the rate for lending without risk.
