Pay Per Click Terms to Use When Setting Up Your Google Adwords Campaign

CPC - Cost Per Click: This is the amount you pay each time someone clicks on your ad. Costs per click are driven by bids.

CTR - Click Through Rate. This is the relationship between the number of impressions your ad gets and the number of people who actually click on the ad. For example, if Google showed an ad 100 times, and 20 people clicked on it, then the Click Through Rate (CTR) is 20%. High click through rates are rewarded by Google with high Quality Scores.

Quality Score - This is an internal algorithm that assigns value to advertisements. Ads with high quality scores can hold higher positions while paying less than the competition.

CPM - Cost per 1000 impressions of an ad. This measurement is mostly used for banner ads.

ROI - Return on Investment. If you invested $1000 and got back $3000, then your ROI is 200%.

CR - Conversion Rate. This is the percentage of visitors who become customers. For example, if 100 people clicked on the ad and four became customers, then your conversion rate is 5%. Average Internet conversion rates are 2%- 3% and 7% is considered quite a high number.

Read more at http://www.seochat.com/c/a/Google-Optimization-Help/Google-Adwords-Guide/#soc4PHjkv2iVpeRQ.99