Google Adwords Basic Grammar

Below is the basic vernacular for anyone who uses Google Adwords. Please take the time to familiarize yourself with these terms and try to understand them in the context of creating a paid Google Ad Campaign

Ad Rank
An ad's position is based on its Ad Rank, which is determined by your keyword(s) and Ad Group's maximum cost-per-click (CPC) times the matched keyword's Quality Score. For the top positions above Google search results, however, we use your ad's actual CPC to determine its position.
Click-Through-Rate (CTR)
Click-Through-Rate (CTR) is the number of clicks your ad receives divided by the number of times your ad is shown (impressions).
Conversion
When a user completes an action on your site, such as buying something or requesting more information.
Conversion Rate (CR)
The number of conversions divided by the number of ad clicks. Conversions can be calculated through Google and some Google Network partners. Conversion Rates can also be tracked on the hosting server independently of Google using appropriate coding techniques.
Cost-Per-Click (CPC)
The pricing structure used by some online channels to charge an advertiser each time a user clicks on the advertiser's ad. The amount is usually set by the advertiser, not by the channel.
See pay-per-click (PPC).
Daily Budget
The amount to spend on a specific AdWords campaign each day.
AdWords displays your ad as often as possible while staying within your daily budget. When the budget limit is reached, your ads will typically stop showing for that day
Destination URL
When you create your ad, you'll specify a display URL and a destination URL. The
destination URL is the exact URL within your website that you want to send users to from your ad.
Display URL
This is the URL displayed on your ad to identify your site to users. The green text in the sample ad below is the display URL. Users clicking on this ad have a clear idea of the website or landing page to which they'll be taken when they click on that ad.
Keyword
The keywords you choose for a given Ad Group are used to target your ads to potential
customers.
https://adwords.google.com/select/KeywordToolExternal?defaultView=3
Landing Page
An active web page where customers will 'land' when they click your ad. The web address for this page is often called a 'destination URL' or 'clickthrough URL.'
Pay-Per-Click (PPC)
The pricing structure used by some online channels to charge an advertiser each time a user clicks on the advertiser's ad. The amount is usually set by the advertiser, not by the channel.
See cost-per-click (CPC).
Prospect
A candidate: someone who is considered for something (in the context of this book, a
potential customer or client)
Return on Investment (ROI)
The benefit gained in return for the cost of your ad campaign. Although exact measurement is nearly impossible, your clickthrough rate and your conversion rate combined with your
advertising costs, can help you assess the ROI of your campaign.
URL - (Uniform Resource Locator)
The address/location of a webpage or file on the Internet.

Having reviewed the above you should have no problem understanding the following:

I recommend that in order to increase the number and quality of prospects from your adword campaigns you should always institute some means of conversion tracking through Google conversion tracking or the like. Knowing the click through rates gives you no information regarding ROI.

Translation:
The real measure of the success of an adword campaign is not the number of people that saw the ad or clicked on it but the number of people that clicked on the ad and then MADE A PURCHASE. If you can't tell which ads are generating sales and which are just getting clicks you cannot optimize your marking campaigns.

Once you have established a means of tracking your conversion rates, then you should create a series of keyword focused campaigns with minimal daily budgets and reasonable CPC so your ads will be visible on the first page and your destination URL should be directed to a landing page that reflects the product or service you are advertising.

Translation:
Once you can track sales, then you should create a series of Google Ads with low daily budgets and a reasonable cost per click that will enable your ad to show on the first page of search results and the ad should link directly to the page of your web site where your product or service is sold.

A good technique for increasing ROI for your various campaigns is to create 2-3 ad variations for each keyword campaign and then track the resultant click through rates and conversions. Compare the results and invest and make changes accordingly.

Translation:
Make 2-3 variations on each ad observe the changes in the number clicks and resultant sales. Based on this information, put more money on the campaigns that make more money than they cost and change or eliminate those that don't.