If you are new to using the AdWords system even the simplest things to the advanced user can seem overwhelming. I have outlined 3 basic elements within any AdWords account with which you should become familiar with and if you don’t I would suggest you let someone who does understand these manage the campaign.
1. Clickthrough Rate (CTR)
Clickthough rate (CTR) is the total number of clicks received divided by the total number of times that your ad is displayed (impressions). Both your keywords and ads have their own unique CTR’s, but you can also view the average keyword-CTR at an ad group or campaign level to give you a broader view of what is going on.
CTR provides a good indication as to the health and performance of keywords, ads, ad groups and campaigns. For example, a good keyword CTR usually indicates a high level of relevance to the particular users who are searching at the time, and the more you can relate your keywords and ad copy the more likely that person is to click on your ad.
A good CTR aids in improving Quality Score (QS) which usually equates to lower costs across the campaign.
Impressions is a pretty basic concept, basically, impressions is the number of times your Ad is shown when a search is performed for one of your keywords on either the Content Network or via Google.
3. Average cost per click (CPC)
Average cost per click, or CPC is the average cost you pay each time someone clicks on your Ad. For example, if your ad is clicked on 4 times and the cost per click is $1, $2, $3 and $4 respectively then the average CPC would be $2.50.
These are not definitive and you should endeavour to learn many of the other AdWords campaign aspects such as, conversion rate, relative CTR, view-through conversions, etc. Once you learn all these you should be able to have a good understanding of how your account is performing and what steps you need to take in order to make it work better. I will go over these other aspects in more detail in the next few weeks but until then, good luck!