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Learn the definition of some of the most commonly used terms in search engine marketing (SEM), which is also called paid search and pay-per-click advertising (PPC). If you’d like, learn more about SEM and how to sign up for Microsoft Advertising.

Audience: The group of potential customers that you care about most and try to reach with your SEM ads.

Bid: Like an auction, this is the amount you’re willing to be charged for a click on your ad. It is usually a “not to exceed” amount, so the cost may actually be quite less than your bid.

Click: The action a potential customer takes when selecting a link in your ad, via a mouse-click or touchscreen, for example. The clicked link may take the person to your website, to an app store page, trigger a telephone call from a mobile device or show directions to your location.

Click-through rate (CTR): The percentage of people who clicked an ad that was presented in search results. Measuring CTR is a common indication of how well ads or keywords are performing.

Conversion: A desired action that a person takes as a result of clicking your ad. Conversions are most commonly defined as completing a purchase, registering for an event, making a phone call, visiting a store and subscribing to a newsletter.

Cost: In pay-per-click advertising, this is the amount an advertiser pays for their ads that were clicked. You control costs by setting budget limits and improving the targeting of your ads. 

Cost per acquisition (CPA): A calculation of total cost spent divided by the number of conversions the advertiser received, such as the number of new customers or purchases occurred.

Cost per click (CPC): The price an advertiser pays for a click on an ad from a potential customer. Advertisers watch this number closely as they evaluate the effectiveness of their ads.

Impressions: In PPC advertising, the number of times an ad appears as a result of a search on a search engine.

Keyword: Words or phrases that ad campaigns are based upon. You choose them depending on what you feel potential customers are looking for when searching with those words or phrases. The campaign keywords are what trigger the ad to display.

Landing page: The page on your website where searchers arrive after clicking on your ad.

Optimisation: The process of enhancing an ad’s performance by adjusting aspects of the campaign. A few examples of optimising might include modifying bids, changing keywords and adding targeting.

Pay per click (PPC): Also known as pay-per-click advertising, this term is synonymous with SEM and paid search. It describes the billing method for this kind of advertising.

Search engine marketing (SEM): The process of advertising on search engines, which involves bidding on keywords to make your ads appear on the first page of search results. Also known as PPC, paid search and search advertising.

Search engine optimisation (SEO): Tactics and strategies used to improve a Web page’s position in the non-paid, “organic” area of the search engine results page.

Targeting: A way for advertisers to narrow the focus of their SEM campaigns to a subset of possible audiences. Targeting works like a set of filters to make your ad appear based on geography, time, age, gender or device.

URL: This is more commonly known as a website address, like The acronym stands for Uniform Resource Locator.