Let’s have a look together at some of the most common terms used in search engine marketing and explain their meaning from an analytic point of view.
Advertisers refer to impressions to the total number of times a given advertisement shows up to a client. Receiving 100 impressions does not mean you got 100 people clicking on your advertising message but it means 100 people POTENTIALLY saw it.
Example: You are advertising on www.sitenumber1.com through the use of a banner. If 200 people visit this page you get 200 impressions but it can happen that only a part of those people click on the banner so even though you get 200 impressions you can end up getting from as low as 0 clicks to a maximum of 200 (which is usually a difficult achievement!).
It is the number of people that click on an advertising message. This number can be between 0% and 100% of the total number of impressions.
Example: Your advertisement on www.sitenumber1.com generated 200 impressions and 50 clicks. Your total number of clicks is 25% of the total number of impressions.
The CTR is simply the total number of clicks divided by the total number of impressions. As it is easy to understand, the number is a percentage between 0% and 100% and refers to the 25% we already talked about in the previous example.
50 clicks / 200 impressions = 25% CTR
The term conversion refers to the execution of a desired action by a site visitor. This can be a purchase, a form submission, or a phone call. As you can imagine, you cannot get more conversions than the number of clicks you generated (exception made for those businesses where a client can execute more than one conversion).
Example: www.sitenumber1.com gets 50 clicks and 25 of those people generated a conversion. As you can read, the total number of conversions (25) is not bigger than the total number of clicks (50).
The Conversion Rate is simply the total number of conversions divided by the total number of clicks. As it is easy to understand, the number is a percentage between 0% and 100% and in case of our last example it is 50%.
25 conversions / 50 Clicks = 50% Conversion Rate
Do not worry about those numbers as you would not need to calculate them manually. All advertising software would give you those numbers and “all” you need to know is their interpretation.