PPC Glossary — 50 Google Ads Terms

From CTR and CPC to POAS and Performance Max — everything you need to understand in one place. Definitions, formulas, examples, and real Serbian market benchmarks.

📚

Basics

(12 terms)

AdWords

📚Basics🔗

Aliases: Google AdWords

The original name of Google's advertising platform from 2000 to 2018, when it was rebranded to Google Ads.

AdWords was Google's name for its PPC advertising platform from its launch on October 23, 2000, until July 24, 2018, when Google rebranded it to Google Ads. The platform itself is identical — same auction principles, Quality Score, keyword bidding, RSA — just a newer name and modernized feature set. Older agencies and marketing professionals in B2B/enterprise contexts sometimes still use 'AdWords' out of habit.

Bing Ads

📚Basics🔗

Aliases: Microsoft Ads · Microsoft Advertising

Microsoft's PPC platform, renamed to Microsoft Advertising in 2019, serving ads on Bing, Yahoo, and DuckDuckGo search.

Bing Ads (now Microsoft Ads / Microsoft Advertising) is the second-largest PPC platform in the western world. It covers 5-12% of search market share globally (higher in UK and US). CPCs are consistently 30-50% lower than Google Ads due to less competition, and the audience skews 8-12 years older on average with higher disposable income. Exclusive advantage: LinkedIn targeting through Microsoft's LinkedIn acquisition.

CPC

📚Basics🔗

Aliases: Cost Per Click · Cena po kliku

CPC (Cost Per Click) is the amount you pay Google each time someone clicks your ad.

CPC is the fundamental billing model for Google Ads Search campaigns. You don't pay for ad impressions, only for clicks. Your maximum CPC bid combines with Quality Score through the Ad Rank formula to determine your ad position in the auction. Typical CPCs: Serbia eCommerce 0.13-0.42 EUR, UK £0.40-£1.50, US $1-$5.

CPC = Ukupna potrošnja ÷ Broj klikova

Example: You spent $100 and got 400 clicks → average CPC = $0.25.

CPM

📚Basics🔗

Aliases: Cost Per Mille · Cost Per Thousand Impressions

CPM (Cost Per Mille) is the price for 1,000 ad impressions — billing model for awareness campaigns (Display, YouTube, Shopping).

CPM is used when reach is the goal, not direct click-response. You pay per 1,000 impressions regardless of whether the user clicks. Common in brand awareness, video campaigns (YouTube bumper ads), Display banner formats. Typical CPMs: Serbia Display 0.40-1.70 EUR, YouTube 0.85-4.20 EUR.

CPM = (Potrošnja ÷ Prikazi) × 1.000

Example: Display campaign: 50,000 impressions, $50 spent → CPM = $1.00.

CPV

📚Basics🔗

Aliases: Cost Per View

CPV (Cost Per View) is the billing model for YouTube video ads — you pay only when a viewer watches 30+ seconds or clicks.

CPV is exclusive to TrueView skippable video formats on YouTube. A 'view' counts as watching 30 seconds (or the entire video if shorter) or clicking the ad. CPV in Serbia is remarkably affordable — 0.004-0.013 EUR per view, making it the cheapest awareness channel per qualified attention unit.

CPV = Ukupna potrošnja ÷ Broj view-ova (30s+)

CTR

📚Basics🔗

Aliases: Click-Through Rate · Click Through Rate · Procenat klikova

CTR (Click-Through Rate) is the percentage of people who click an ad after seeing it. Formula: (Clicks ÷ Impressions) × 100.

CTR is one of the most important quality signals in Google Ads — it accounts for about 40% of the Expected CTR component of Quality Score. Higher CTR = higher Quality Score = lower CPC for the same position. Caveat: high CTR isn't always the goal. High-converting CTR is. A very broad CTR with poor conversion may mean ads are attracting the wrong audience.

CTR = (Klikovi ÷ Prikazi) × 100

Example: 1,000 impressions, 50 clicks → CTR = 5%.

Benchmarks:

  • Search kampanje (SR): 5-10% (branded 15%+)
  • Display / Banner: 0.5-1%
  • Shopping (post-launch SR): 1-3%

Impressions

📚Basics🔗

Aliases: Prikazi · Impression

An impression is every time an ad is shown to a user — on the SERP, Display Network, YouTube, or partner sites.

An impression is counted once per ad render, regardless of whether the user sees or scrolls past the ad. Key reach metric and the denominator for CTR (clicks ÷ impressions). Note: Google Ads defines impression differently from GA4 — GA4 counts 'engaged impressions' which require additional scrolling or pause.

Impression Share

📚Basics🔗

Aliases: IS · Deo prikaza

Impression Share (IS) is the percentage of total available impressions your campaign received. If it's 80%, you missed 20% of potential impressions.

IS is a key diagnostic metric. It consists of 3 components: Search IS (actual), Lost IS (rank) — lost due to insufficient Ad Rank, Lost IS (budget) — lost because the campaign hit daily budget. If you have 60% Search IS and 40% Lost (budget), the fix is to increase budget. If 40% Lost (rank), the fix is improving Quality Score or raising bid.

Search IS = Prikazi ÷ (Prikazi + Propušteni prikazi)

Click

📚Basics🔗

Aliases: Klik

A click is a user interaction with an ad — clicking the headline, image, sitelink, or call extension — that triggers a billable action.

Not every click is a 'qualified' click. Google filters 'invalid clicks' (bot traffic, duplicates, accidental clicks) and doesn't charge for them. Sitelink clicks, call clicks (on mobile), location clicks also count if billable. GA4 records 'session start', which doesn't always match 1:1 with Google Ads clicks (attribution delay, JavaScript issues).

SERP

📚Basics🔗

Aliases: Search Engine Results Page · Stranica rezultata pretrage

SERP (Search Engine Results Page) is the page Google displays in response to a query — a mix of paid ads, organic results, AI Overview, and rich features.

The modern SERP (2026) is no longer linear. It consists of: Shopping Ads carousel (top), Search Ads (top 4), AI Overview (AI-generated answer with sources), Featured Snippet, People Also Ask, Image pack, Organic top 10, Shopping Ads (bottom), Related searches. For PPC advertisers, the top 4 Search Ads slots are most valuable, but AI Overview is increasingly capturing traffic.

Bidding

📚Basics🔗

Aliases: Licitiranje · Licitacija

Bidding is the auction process in Google Ads — the maximum you're willing to pay per click, conversion, or 1,000 impressions.

Every time a user enters a query matching your keywords, a real-time auction fires. Your bid combines with Quality Score to calculate Ad Rank, determining your position. You don't pay your max bid — you pay only as much as needed to beat the next position (+ $0.01). Two main approaches: Manual (you control bid) and Smart Bidding (AI auto-adjusts by goal).

🎯

Bidding Strategies

(10 terms)

Manual CPC

🎯Bidding Strategies🔗

Aliases: Manuelni bidding · Manual bidding

Manual CPC is Google Ads' oldest bidding strategy — you manually set max bid per keyword, with no AI optimization.

Manual CPC offers the most control but requires active management. Relevant in 2026 only for specific cases: new accounts without conversion tracking (until data accumulates), extremely small budgets (<$100/mo), test campaigns, or brands with strict no-AI-automation policies. For 95% of accounts, Smart Bidding strategies outperform it.

Enhanced CPC

🎯Bidding Strategies🔗

Aliases: eCPC · ECPC

Enhanced CPC (eCPC) is a hybrid between Manual and Smart Bidding — you set a base bid, and Google adjusts it ±30% in the real-time auction based on conversion likelihood.

eCPC was popular 2015-2020 as a 'safe stepping stone' from Manual to Smart Bidding. In 2026, it's deprecated for most use cases — Google recommends direct migration to tCPA or Maximize Conversions. It remains relevant for Search Partners and Display campaigns in new account beta phases.

Maximize Clicks

🎯Bidding Strategies🔗

Aliases: Max Clicks

Maximize Clicks is an automated bidding strategy that spends your daily budget to get the maximum number of clicks — without optimizing for conversions.

Used for awareness campaigns, new accounts without conversion tracking, or test phases when you need to accumulate keyword data. Often combined with a 'Max CPC bid limit' to prevent Google from overpaying for spam clicks. In 2026, most accounts replace it with Maximize Conversions (without tCPA target) as a more efficient signal.

Maximize Conversions

🎯Bidding Strategies🔗

Aliases: Max Conv

Maximize Conversions is a Smart Bidding strategy that uses AI to spend budget to achieve the maximum number of conversions — without a strict tCPA target.

The best first Smart Bidding strategy for new accounts because it doesn't require a minimum conversion count. Google automatically bids 'as much as needed' to win each conversion within the daily budget. After 30+ conversions/month, consider moving to Target CPA or Target ROAS for tighter cost control. Tip: don't cap CPC bids in the early phase — it stifles AI signals.

Maximize Conversion Value

🎯Bidding Strategies🔗

Aliases: Max Conv Value

Maximize Conversion Value targets the highest total revenue (conversion value), not just the number of conversions — used for eCommerce with varying AOVs.

Requires conversion value tracking (revenue imported from GA4 or directly from the Google Ads tag). Ideal for eCommerce where average order value is variable ($30 to $300). Differs from Maximize Conversions because the AI won't bid equally for a $30 and $300 conversion — it prefers higher-value ones. Minimum 30 conversions/month with revenue tracking for stable results.

Target CPA

🎯Bidding Strategies🔗

Aliases: tCPA · Target Cost Per Acquisition

Target CPA (tCPA) is a Smart Bidding strategy where you set a target cost per conversion, and Google's algorithm bids to average that target.

tCPA works best for Lead Gen with clear CAC (Customer Acquisition Cost) economics — if you know a conversion is worth $50, you can set tCPA at $20-30. Minimum 15-30 conversions in 30 days for reliable operation. Common mistake: too aggressive target (e.g., $10 when real average is $30) → algorithm stops bidding, impression share drops 80%+. Strategy: start with tCPA = current average CPA, then gradually reduce 10-15% monthly.

tCPA cilj = Max CAC × 0.6-0.8 (safety margin)

Target ROAS

🎯Bidding Strategies🔗

Aliases: tROAS · Ciljni ROAS

Target ROAS (tROAS) is a Smart Bidding strategy where you set a target ROAS percentage, and Google bids to ensure the campaign achieves that target.

tROAS requires conversion value tracking (revenue). You set a target value — 400% means $4 revenue for every $1 spent. Google automatically bids higher for clicks likely to produce high conversion value, lower for ones that won't. Used in mature eCommerce accounts (50+ conversions/30 days). For new accounts: start with Maximize Conversion Value → after 2-3 months, move to tROAS with target = then-current average ROAS.

tROAS cilj = (Target Revenue ÷ Ad Spend) × 100

Example: You set tROAS 400%. For $1,000 spent in a month, the algorithm targets $4,000 revenue.

Smart Bidding

🎯Bidding Strategies🔗

Aliases: AI Bidding · Automated Bidding

Smart Bidding is an umbrella term for all Google Ads Smart Bidding strategies (Max Conv, tCPA, tROAS, Max Conv Value) that use AI for real-time bid adjustments.

Smart Bidding AI uses 70+ billion signals per auction: device, location, time of day, browser, OS, audience match, search query intent, cart content (for eCommerce), weather (for certain industries), and more. A human bidder can't process 70 signals in the millisecond an auction lasts. This is why Smart Bidding outperforms Manual by 20-40% in most accounts with enough conversions (30+/mo).

Bid Adjustments

🎯Bidding Strategies🔗

Aliases: Bid Modifiers · Bid modifikatori

Bid Adjustments are percentages you use to adjust bids up/down by dimension — device, location, time, audience — in Manual or eCPC strategies.

Bid adjustment types: Device (-100% to +900%), Location (±90%), Ad Schedule / Day-parting (±90%), Audience (±900%), Top Content (for Display), RLSA (remarketing for Search). Most common mistake: mobile bid -20% set in 2018 and never updated, while today 60%+ of traffic is mobile. In Smart Bidding, most bid adjustments are IGNORED because the AI self-optimizes across all dimensions.

Portfolio Bidding

🎯Bidding Strategies🔗

Aliases: Portfolio Bid Strategy

Portfolio Bidding is a Smart Bidding approach where multiple campaigns share a single bidding target (e.g., tCPA $30) — the AI optimizes the portfolio holistically.

Portfolio strategy is useful when you have multiple campaigns with similar goals (e.g., 5 Search campaigns for different product categories). Instead of separate tCPAs per campaign, the portfolio shares 'budget' across campaigns and optimizes cross-campaign. Advantage: better overall result. Downside: loss of per-campaign control. Recommendation: use portfolio for mature campaigns with stable KPIs, keep Standard bid strategies for new and experimental ones.

📊

Tracking & Measurement

(8 terms)

Conversion

📊Tracking & Measurement🔗

Aliases: Konverzija

A conversion is the desired action a user takes after clicking an ad — purchase, form submit, call, download, signup, or custom event.

You define which actions count as conversions in Google Ads UI: Purchase (ecommerce), Lead form submit, Phone call (>30s), Newsletter signup, Download, Contact button click. Important: not all conversions are equal — for eCommerce use Conversion Value (revenue), for Lead Gen use lead quality (MQL/SQL filter). Count 'One' vs 'Every' setting: 'One' counts max one conversion per click (for forms, leads), 'Every' counts all (for repeat purchases).

Conversion Rate

📊Tracking & Measurement🔗

Aliases: CVR · CR

Conversion Rate (CR) is the percentage of users who complete a conversion — purchase, form, call — out of the total clicks on an ad.

Typical CR for eCommerce is 1-3% (varies dramatically by industry — luxury items 0.3-0.8%, impulse buys 3-6%). For Lead Gen (forms, calls) 4-12%. High CR = strong landing page Quality Score signal → lower CPC. Improving CR via CRO (landing page optimization) is often cheaper than raising CPC to scale conversions.

CR = (Konverzije ÷ Klikovi) × 100

Example: 100 clicks, 3 purchases → CR = 3%.

Conversion Value

📊Tracking & Measurement🔗

Aliases: Vrednost konverzije · Revenue

Conversion Value is the monetary value (revenue) tied to each conversion — required for Maximize Conversion Value and Target ROAS bidding strategies.

Conversion Value is sent to Google Ads via 3 channels: (1) Enhanced Ecommerce in GA4 with a 'purchase' event carrying the 'value' parameter, (2) Direct gtag conversion event with transaction_id and value, (3) Offline Conversion Import (CSV/API) for COD orders that settle later. Advanced: use dynamic value (actual order value) instead of static value ('$50 default') — without this, tROAS can't optimize effectively.

GTM (Google Tag Manager)

📊Tracking & Measurement🔗

Aliases: Google Tag Manager · Tag Manager

Google Tag Manager (GTM) is Google's central system for managing tags (Google Ads conversion, GA4, Meta Pixel, etc.) without requiring a developer to modify the site code.

GTM uses one 'container' snippet on the site (installed once). Within the GTM UI, you add tags (Google Ads conversion, GA4 event, etc.), triggers (when to fire — on button click, form submit, page view), and variables (what data to send). This means marketers can add new conversions without developers. The biggest benefit: central change history, versioning, debug mode.

GA4 (Google Analytics 4)

📊Tracking & Measurement🔗

Aliases: Google Analytics 4

GA4 is the current version of Google Analytics (since 2023) — an event-based model that tracks web + app actions in a single property and integrates with Google Ads via audience and conversion import.

GA4 replaces the old Universal Analytics (UA) which was deprecated in July 2023. The event-based model means everything (page view, scroll, click, form submit) is an event with parameters, giving more flexibility but requiring more complex setup. Critical for Google Ads: GA4 conversion events are imported as 'Primary' conversions in Google Ads (replacing direct gtag tracking), and GA4 audience segments are used for remarketing and Smart Bidding signals.

Enhanced Conversions

📊Tracking & Measurement🔗

Aliases: EC

Enhanced Conversions is Google's privacy-safe conversion tracking system that hashes customer data (email, phone) and matches it against Google accounts for more accurate attribution.

Cookies are slowly disappearing (Chrome will phase them out by end of 2026). Enhanced Conversions solves this by sending SHA-256 hashed customer data (email, phone, name) alongside each conversion. Google then matches that hash against its own sign-in data — if matched, the conversion is attributed accurately without relying on cookies. Mandatory for 2026+ accounts. Setup via GTM or Google Ads UI (select 'User-provided data' in conversion action settings).

Offline Conversion Import

📊Tracking & Measurement🔗

Aliases: OCI · Offline Conversions

Offline Conversion Import is the process of sending conversions that happened off-site (phone, physical store, COD order) back to Google Ads for more accurate Smart Bidding optimization.

Critical for Lead Gen (lead → sale happens weeks later) and COD eCommerce in Serbia (order → delivery and payment 3-7 days later). Process: Google Ads click gives a GCLID (Google Click ID), you capture it in CRM, when the lead converts to sale — you upload a CSV (or Google Ads API call) with the GCLID + value. Google matches back to the original click. Without OCI, the algorithm thinks the lead is the conversion and optimizes for quantity instead of quality.

Attribution Model

📊Tracking & Measurement🔗

Aliases: Atribucijski model

Attribution Model is a rule for assigning credit for a conversion across multiple touchpoints in the customer journey — First Click, Last Click, Linear, Position-Based, Data-Driven.

The default in Google Ads since 2021 is Data-Driven Attribution (DDA) — an AI model that uses machine learning to assign credit to each touchpoint based on actual impact. Last Click (old default) is deprecated for most accounts. Advanced: Data-Driven often shows that Display/YouTube campaigns 'assist' conversions even though Last Click doesn't count them — which justifies the awareness budget. Tip: check Attribution reports in Google Ads → 'Path Metrics' → see how many touchpoints a typical customer goes through before conversion.

⚙️

Optimization

(10 terms)

Quality Score

⚙️Optimization🔗

Aliases: QS · Ocena kvaliteta

Quality Score (QS) is Google's 1-10 rating per keyword that measures ad relevance, expected CTR, and landing page quality. Higher QS = lower CPC.

QS is calculated per keyword, not per campaign or ad. It consists of 3 components: Expected CTR (40%), Ad Relevance (30%), Landing Page Experience (30%). Average QS below 5 is a red flag — you're paying 100-200% more in CPC than competitors with QS 8+. Improving QS is the simplest optimization for quickly reducing CPC.

QS = fn(Expected CTR, Ad Relevance, Landing Page Experience)

Ad Rank

⚙️Optimization🔗

Aliases: Pozicija oglasa

Ad Rank is Google's formula for ranking ads in the auction — it combines your bid, Quality Score, and expected extension impact to determine position.

Ad Rank is calculated for each auction (not globally). If you have max bid $2 and QS 8, while a competitor has max bid $3 and QS 4, your Ad Rank can be higher — and you actually pay less. This is why Quality Score is so important: it lets you beat richer advertisers. The formula is more complex than just described — it also includes Ad Relevance thresholds and context-specific factors.

Ad Rank = Max Bid × Quality Score × (Extensions + Context factors)

Landing Page Experience

⚙️Optimization🔗

Aliases: LP Experience · LPE

Landing Page Experience is the Quality Score component that measures how useful, fast, and relevant your destination (landing page) is for the user who clicks the ad.

Google measures LP through multiple signals: Core Web Vitals (LCP, CLS, INP), mobile-friendliness, page load speed, text relevance (keyword match between ad and LP), presence of a clear value proposition, absence of 'deceptive practices' (bait-and-switch). Rating: Above Average, Average, Below Average. Below Average = QS drops 2-3 points. Most common issue: slow mobile loading (LCP >2.5s).

Expected CTR

⚙️Optimization🔗

Aliases: Očekivani CTR

Expected CTR is Google's prediction of how likely your ad is to be clicked — adjusted for position. Component of Quality Score (40% weight).

Expected CTR is always normalized to the top 4 position — so it fairly compares an ad in position 1 to an ad that would be in position 1. Google looks at historical CTR for your keyword + ad combination (historical performance), then compares that to competitors for the same query. Rating: Above Average, Average, Below Average. Below Average = competitive ad copy is mandatory to recover QS.

Ad Relevance

⚙️Optimization🔗

Aliases: Relevantnost oglasa

Ad Relevance is the Quality Score component that measures how closely your ad matches the query that triggered it — semantic match between keyword and ad copy.

If an ad for 'buy clothes' contains only generic text like 'Online shop. Best prices.' — Ad Relevance is Below Average. If the headline contains 'Buy Clothes Online' — Ad Relevance is Above Average. Tip: use Responsive Search Ads (RSA) with 15 headlines and 4 descriptions, and pin the primary keyword headline to position 1 (so Google can't hide the most relevant copy).

Negative Keywords

⚙️Optimization🔗

Aliases: Negativne ključne reči

Negative Keywords are words you actively DON'T want your ad to show for — they block budget waste from irrelevant searches (free, used, diy, jobs, etc.).

Negative keywords are the strongest budget protection tool. Typical negative lists for eCommerce: 'free', 'download', 'torrent', 'used', 'jobs', 'careers', 'diy', 'how to make'. Every campaign should have a minimum 50-100 negative keywords. Match types for negatives: Broad (blocks all phrase variations), Phrase (blocks only within phrase), Exact (only exact match). Tip: every month review the 'Search Terms' report and add new negatives.

Match Types

⚙️Optimization🔗

Aliases: Tipovi poklapanja

Match Types determine when Google shows your ad relative to a user query — Broad Match, Phrase Match, Exact Match. Control precision vs reach.

Broad Match: widest reach, least control — Google may show the ad for synonyms, translations, and semantically 'similar' queries (often too stretched). Phrase Match: ad shows if the phrase appears in the query or in a modified form (order matters). Exact Match: most precise — only for exact match or very close variants. 2026 trend: Google pushes Broad Match with Smart Bidding (claiming the AI 'understands' them), but Phrase Match + negative keywords remains a safer strategy for controlled budget.

Broad Match

⚙️Optimization🔗

Aliases: Širok match · Broad

Broad Match is the widest match type — Google shows the ad for any query it considers 'semantically relevant' to your keyword.

Broad Match is controversial. With Smart Bidding, Google claims the AI can understand 'user intent' and show relevant ads even on loosely related queries. In practice: on new accounts, it often leads to budget waste on totally irrelevant queries. Recommendation: use Broad Match only with (a) active negatives list (50+ words), (b) Smart Bidding strategy (tCPA, Max Conv Value), (c) stable conversion tracking infrastructure. Without all 3, prefer Phrase Match.

Exact Match

⚙️Optimization🔗

Aliases: Tačan match

Exact Match is the most precise match type — ads show only for very precise variants of your keyword (including plurals, typos, close variants).

Exact Match is written in square brackets: [google ads serbia]. Since 2014, it's no longer 'literal' exact — it includes 'close variants': typos (googel ads), plurals (google adses), reordering (serbia google ads). Ideal for branded terms (your business name) and high-intent high-value keywords where you want maximum control. Combining branded Exact + non-branded Phrase is a proven foundational structure for Search campaigns.

Phrase Match

⚙️Optimization🔗

Aliases: Fraza match

Phrase Match is the middle match type — ads show if the query contains your phrase in the exact order (with possible additional words before or after).

Phrase Match is written in quotes: 'google ads agency'. The ad shows for queries like 'best google ads agency london' or 'google ads agency for eCommerce', but NOT for 'agency google ads' (reordered). Sweet spot between Broad (too wide) and Exact (too narrow). Recommendation: use Phrase Match as default for 70-80% of keywords in a new campaign.

🚀

Advanced

(10 terms)

ROAS

🚀Advanced🔗

Aliases: Return on Ad Spend · Povraćaj na potrošnju

ROAS (Return on Ad Spend) is the ratio of revenue generated from ads to budget spent, expressed as a percentage or multiplier.

ROAS is the fundamental eCommerce metric. ROAS 400% means $4 revenue for every $1 spent. But — ROAS is a vanity metric if it doesn't account for margin. A company with 60% COGS and ROAS 400% actually has a POAS of only 60% (profit after product cost). ROAS is still a useful benchmark, but POAS is a more accurate profitability indicator. The Target ROAS bidding strategy uses this metric directly.

ROAS = (Revenue ÷ Ad Spend) × 100

Example: Spent $1,000, got $4,000 revenue → ROAS = 400%.

POAS

🚀Advanced🔗

Aliases: Profit on Ad Spend · Profit-Based ROAS · Margin ROAS

POAS (Profit on Ad Spend) is the evolved version of ROAS that accounts for profit (not just revenue) — a realistic indicator of whether a campaign is making or losing money.

POAS subtracts COGS (Cost of Goods Sold) and ad spend from revenue to calculate real profit per dollar spent on ads. Critical for businesses with multi-SKU assortments where different products have different margins. Shopify, Magento, and other eCommerce platforms export COGS data directly to Google Ads via 'custom label' on the feed — enabling Google to optimize for POAS via Maximize Conversion Value bidding. Industry standard in 2026.

POAS = (Revenue − COGS − Ad Spend) ÷ Ad Spend × 100

Example: Revenue $4,000, COGS $2,400, ad spend $1,000 → profit $600. POAS = 60%.

AOV

🚀Advanced🔗

Aliases: Average Order Value · Prosečna vrednost narudžbine

AOV (Average Order Value) is the average amount per order — total revenue divided by number of orders.

AOV is a critical eCommerce metric because it directly impacts campaign profitability. If AOV is $50 and target CPA $15, margin is solid. If AOV is $20 and CPA $15, you're barely profitable. Strategies to increase AOV: bundles (buy 2, get 3), free shipping threshold ($50 free shipping → user adds one more item), checkout upsells. Bing/Microsoft Ads users typically have 15-25% higher AOV than Google.

AOV = Ukupan Revenue ÷ Broj narudžbina

LTV

🚀Advanced🔗

Aliases: Customer Lifetime Value · Životna vrednost kupca

LTV (Customer Lifetime Value) is the total revenue a customer generates over their entire period as an active customer — not just the first order.

LTV is key for eCommerce with repeat purchases (subscription, FMCG, skincare) and SaaS businesses. If LTV is $300 and the first order is $50, you can 'overpay' acquisition (CPA $80) because you know the user will bring in another $250 over a year. Advanced: Dynamic LTV tracking via GA4 + CRM → audience segmentation 'high-LTV customers' → remarketing with more aggressive bidding. Google's 'Value Rules' in Smart Bidding allows 1.5x or 2x bidding for predicted high-LTV customers.

COGS

🚀Advanced🔗

Aliases: Cost of Goods Sold · Trošak prodatih proizvoda

COGS (Cost of Goods Sold) is the direct cost of products you sell — manufacturing, materials, inbound shipping. Necessary for POAS calculation.

COGS is the 'floor' below which you shouldn't go with discounts. Margin = (Revenue - COGS) ÷ Revenue. For eCommerce Shopify/Magento, COGS is typically exported to Google Merchant Center feed as 'custom_label_0' — Google then uses it for POAS-based bidding strategies. Without accurate COGS in the feed, you can't use Value-Based Smart Bidding effectively.

PMax (Performance Max)

🚀Advanced🔗

Aliases: Performance Max · PMax kampanja

PMax (Performance Max) is Google's AI-driven campaign that automatically distributes ads across all Google channels — Search, Shopping, Display, YouTube, Gmail, Maps — from a single campaign.

PMax launched in 2021 and became the dominant format in 2026. Instead of separate campaigns for Search and Shopping, PMax combines everything into a single campaign with 'Asset Groups' (images, headlines, video, descriptions) that Google dynamically combines for each channel. Minimum requirements: 50+ conversions/month, conversion value tracking, good feed (for eCommerce variants). Downside: less transparency (Google doesn't show per-channel metrics in detail), less targeting control. Upside: best reach + AI optimization.

RSA (Responsive Search Ads)

🚀Advanced🔗

Aliases: Responsive Search Ads · RSA oglas

RSA (Responsive Search Ads) is the only type of text ad in Google Search campaigns since 2022 — you provide up to 15 headlines and 4 descriptions, Google AI dynamically combines them.

RSA replaced the old Expanded Text Ads (ETA) format. Google AI dynamically combines 3 headlines and 2 descriptions from your list for every query. Best practice: don't fill all 15 headlines randomly — 7-8 quality angles produce better results than 15 mediocre ones. Pin strategy: pin primary keyword to position 1 (so Google can't hide the most relevant copy). Each RSA gets an 'Ad Strength' rating: Poor, Average, Good, Excellent — tied to headline diversity and keyword inclusion.

Remarketing

🚀Advanced🔗

Aliases: Retargeting

Remarketing is the strategy of re-targeting users who have already visited your site or interacted with the brand — they convert 2-5x better than cold traffic.

Basic remarketing system: (1) Google tag or GA4 on the site records visitors, (2) Audience lists are created by behavior (all visitors, cart abandoners, product viewers, past purchasers), (3) Remarketing campaign shows Display, Search, YouTube ads to that specific audience. Typical audience lists: Cart Abandoners 7-14 days (warm), Product Viewers 30 days (medium), All Visitors 90 days (cold). Bidding: 2-3x higher CPC than prospecting because LTV is much higher.

Microsoft Audience Network

🚀Advanced🔗

Aliases: MSAN · Audience Network

Microsoft Audience Network (MSAN) is Microsoft's equivalent to Google Display Network — serves native and display ads on MSN, Outlook.com, premium partner sites.

MSAN is separate from Bing Search — these are ads that appear in 'feed' context on partner sites. CPCs are typically 30-50% lower than Google Display, and the audience is 'premium' (older, wealthier). It's integrated with LinkedIn targeting (exclusively) — you can target by job title, industry, company size. Ideal for B2B brands.

Google Merchant Center (GMC)

🚀Advanced🔗

Aliases: Merchant Center · GMC

Google Merchant Center (GMC) is Google's platform for uploading and managing product feeds — required for Google Shopping campaigns and PMax campaigns with a Shopping segment.

GMC connects your eCommerce site with Google Shopping. The feed contains: title, description, price, availability, image, brand, gtin (barcode), and optional 'custom labels' (use for POAS bidding). Feed must be updated at least daily (ideally real-time via Shopify/Magento API). Site verification (via Google Search Console or Google tag) takes 1-4 weeks. For Serbia — GMC becomes active for Shopping Ads in November 2026.

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