What Is PPC (Pay Per Click)?
Pay-per-click is an internet advertising model used to drive traffic to websites, in which an advertiser pays a publisher when the ad is clicked. Pay-per-click is commonly associated with first-tier search engines.
Businesses use PPC to drive traffic, sales, or inquiries from their target audience. Common PPC platforms allow an outstanding depth of targeting, meaning that you can serve ads in front of those only who you deem to fit your customer demographic.
Search engines are the number one way that people look for suppliers of both products and services, and when there is an active audience looking for what your business offers, there is an opportunity to make a sale.
PPC can help you get in front of these people with a precise level of targeting that traditional advertising doesn't allow for.
How Does Pay-Per-Click Advertising Work?
PPC as a marketing channel covers a number of different ad platforms, with the most common of these being Google Ads and Bing Ads.
And within each of these platforms are different ad formats, including:
Most commonly, you will find that businesses start their PPC marketing on Google Ads, for the simple reason that it gives access to the largest audience of potential clients and customers, as well as a number of different ways to set up and run campaigns depending on your goals.
But regardless of the platform and ad format, the way that PPC works remains largely unchanged, and it is a pretty simple process:
Sign up to an advertising account with the platform.
Create ads (and select the right targeting by adding keywords or audiences, etc.).
Set the maximum cost you are willing to pay for each click.
Your ad goes into an auction with other advertisers who are bidding on the same keywords.
The auction determines the order in which the ads are shown.
You pay when someone clicks your ad.
It is fairly straightforward and easy to get to grips with, and while there are differences between different ad formats (and other bidding strategies that can be used, as an example), the main principles remain.
But let's take a look at how the auction works, as this is often the part that's the most confusing to those getting started with PPC.
How do PPC ad auctions work?
When a user performs a search, an ad auction takes place that is used to determine factors including:
An ad account's eligibility to enter the auction.
The order in which eligible ads will appear in the ad space on the results pages.
How much a click will cost each of the advertisers whose ads are showing.
The first influencer on the auction here is the maximum CPC (cost-per-click) that an advertiser sets in their ad account either for a specific keyword or ad group — this is the most that they are willing to pay for each click.
But it doesn't necessarily mean that this is how much they will actually pay, just the maximum.
The other influencer is the Quality Score (QS), a metric that consists of a number of different factors such as the expected CTR (click-through rate) of an ad, the relevancy of an ad to the query being searched for, and the experience of the landing page that the ad will send traffic to.
We will dive deeper into Quality Score shortly.
The position of an ad on the results page is determined by the Ad Rank, which can be defined in simple terms as:
Ad Rank = Quality Score x Max CPC
Google's actual formula is a little more complex, but to gain a general understanding, this is a brilliant way to look at it.
What determines how much an advertiser pays for a click?
Ad Rank plays a big part in this but isn't the only contributing factor to CPC. We can understand the cost that an advertiser pays to appear in their position as:
Cost Per Click = Ad Rank of the advertiser below / Quality Score + $0.01
Why Use PPC?
If you are considering PPC as a marketing channel for your business, you will want to know the benefits and why you should invest your budget here and not elsewhere.
Here are some of the most common reasons why PPC could be the right advertising channel for you:
You can start receiving clicks very quickly.
Once you have set up your ad account and created an ad, these will typically need to be approved by the platform, but this usually takes no more than a few hours.
Once your ads are live, so long as you are eligible to appear in the auction and your bid is high enough, you can start appearing (and receiving clicks so long as the volume is there) very quickly.
Compared to channels such as SEO, PPC allows you to start seeing returns very quickly; and this is absolutely one of the reasons why it is so popular with marketers.
PPC can easily be measured and tracked.
One of PPC's main benefits over traditional advertising channels is the ability to easily measure and track the returns from the platform.
All popular platforms, like Google Ads and Bing Ads, allow you to track conversions, including order or lead values. They also enable you to see, at a granular level, the ROI of not just of the overall account but specific ad groups and keywords, too.
This means that you are able to use data and insights to effectively refine the efficiency and performance of a campaign over time to increase the ROI of the channel.
Does PPC really work?
PPC can be extremely effective for small budgets. Targeting.: You can use PPC to target visitors at all stages of the buying funnel. Start by focusing on the key words people type in when they are ready to buy. The lower in the funnel, the higher conversion rate you should expect.
What types of PPC are there?
Social media advertising.
How to Launch a Successful PPC Campaign For The First Time
Let the brainstorming begin.
Use keyword tools to check the demand.
Structure and organize your PPC keywords.
Include negative keywords in your first PPC campaign.
Know your budget and work backwards.
Research the competitive landscape.
Write better ad copy.
Create a powerful and relevant call to action.
How long does it take for PPC to work?
PPC takes three months to work, on average. The first three months of a PPC campaign should focus on gathering data from your ads, which you can then use to improve your keyword targeting, audience targeting, and bids.
What is a good PPC?
The average PPC conversion rate across all industries is about 3.75% for search. And it is at about 0.77% for display networks. This conversion rate, of course, varies with each industry. For instance, the conversion rates for the Dating and Personal industry is as high as 9% for search.
Why is PPC so important?
PPC or pay-per-click advertising is a way to market and gain higher visibility on search engines such as Google and Bing. With PPC visitors 50% more likely to make a purchase than organic visitors, this advertising tactic is one of the most effective online marketing tactics.
Does PPC affect SEO?
Clients often ask us if PPC (pay-per-click) advertising helps with SEO (search engine optimization) results. It's a great question to ask. ... But in short, no, PPC does not help with SEO results…at least not directly.
Oftentimes, we see our clients start with PPC campaigns and then tack on SEO. As a result, many experience indirect benefits of a dual marketing strategy.
So, how can PPC indirectly affect or benefit SEO results? There’s no cut and dry answer, as many experts are unable to point to direct and concrete facts. According to Moz, some indirect effects and benefits can include:
Searchers who see your ad may be more likely to also click on your organic search result
Searchers who have previously been exposed to your brand are more likely to click and convert
Searches with high paid traffic can impact organic CTR
Links in paid ads can produce increased site traffic. Which, in turn, can lead to greater site exposure via media or social media coverage
Google also uses traffic and site interaction as part of its ranking algorithms. If your paid ads effectively drive traffic to your site, then your site’s organic ranking could see an indirect benefit. However, this is one small piece of 230+ factors in Google’s algorithms, so the impact would not be significant.
Whether marketers can directly tie PPC efforts to improve organic rankings shouldn’t ultimately decide your digital marketing plan. Your company and your unique goals should define your marketing strategy.
If you’re considering unleashing the power of digital marketing or considering adding an additional strategy, let me know. i’d love to talk you through it.