Pay-per-click ads are a type of advertisement where the advertiser pays a certain amount every time someone clicks on the ad. It’s an advertising method that’s great for startups and can also serve as an additional marketing strategy for larger brands.
To help you understand what PPC is and how it works, we have created this comprehensive guide. In it, we explain the basics of PPC, its benefits and drawbacks, and offer tips on developing a successful pay-per-click strategy.
What Is PPC?
PPC stands for pay-per-click and refers to an advertising model in which you pay a fee every time someone clicks on your ad. Pay-per-click ads are placed on PPC platforms like social media platforms or search engines.
Depending on how well your PPC bidding goes, your ad will be ranked in the organic search results — the higher it is, the more clicks and sales you can expect. They usually have “Sponsored” lettering in the left corner.
How Does PPC Work?
Search engines such as Google or Microsoft Bing allow businesses to display relevant ads on their platforms. But how does this work exactly? Here’s a short step-by-step guide of the process.
1. Keyword Search
The PPC process begins when someone searches for a certain word on any search engine. Let’s take Google as an example, being the most popular search engine in the world.
Once someone asks Google a certain question, it signals the engine that there is demand for a certain keyword. This triggers the ad auction or ad bidding.
2. Ad Bidding
When you use pay-per-click advertising, you’re actually competing for ad space with other advertisers. Everyone places bids — a maximum amount you’re willing to pay if someone clicks on your ad.
Every time a user enters a search term looking for information about a service or product, a PPC auction takes place. An ad auction is when Google determines if your ad is eligible to appear at the top of search results for a query.
3. Ad Ranking
If your ad appears in the search engine results, that means you have won the auction. But that doesn’t necessarily mean your ad will get to the top of search engine result pages (SERPs). The ranking of your ad depends on many factors such as:
- Bidding amount
- Ad quality
- Ad assets
- Ad context, etc.
Google, specifically, has an Ad Rank score that is given to every PPC campaign based on different factors. The higher the score is, the higher your ad will be ranked.
4. Ad Clicks
The final step of our basic PPC 101 short guide is ad clicks. Once your ad is placed, you will measure its effectiveness based on the number of clicks you get. The more clicks you have, the more you pay for the ad and the bigger the chances of you making a sale.
PPC Advertising Benefits
Paid search advertising can help your business in many ways even if you don’t have extensive digital marketing knowledge or a large ad spend budget. Some of the PPC benefits almost every business can reap include:
1. Fast Results
While a regular SEO campaign can take months to produce results and increase your search engine rankings, PPC delivers results faster. The beauty of PPC ads is that this marketing strategy can place your business at the top of the search results instantly, without waiting for direct traffic to your website.
If you don’t have the time to wait for the results of your SEO strategy, using PPC is a great way to get more exposure and leads.
2. Budget Control
Pay-per-click campaigns let you control how much you spend. You can set the maximum amount you’re willing to pay when someone clicks on your ad or set a daily budget.
Once you meet your budget limits, the PPC platform you’re using will stop showing your ad, so you don’t spend more than you planned. And let’s not forget that with PPC ads you only pay when a user clicks on it.
3. Easy Tracking
Tracking your campaign and measuring results is very easy with PPC. For example, if you use Google Ads, you can track results with Google Analytics. With Instagram Ads, progress is tracked right from the app!
All platforms allow you to track impressions, number of clicks, conversions, and other PPC KPIs you have set for your campaign. This way, you’ll gain insights into what’s working and what needs to be tweaked to generate better results.
4. Improved SEO
Not only does PPC deliver results much faster than search engine optimization efforts, but it also aids your SEO strategy. Namely, when you set up a PPC strategy, it doesn’t take long to see which keywords are driving more traffic. You can use these insights to optimize your SEO efforts, tweak every SEO strategy you’re using, and drive results.
PPC Advertising Drawbacks
Alongside the benefits, it’s important to also list the drawbacks that every business should be aware of when diving into PPC advertising:
1. High Competition
As established earlier, PPC ads work on a bidding model, which means you must go up against other advertisers to get the best ranking possible. As a popular marketing method, the competition is fierce, which translates to high costs.
The more popular and demanded a keyword is, the higher the initial bidding amount will be. So, for businesses with limited budgets, PPC can sometimes present a costly strategy.
2. Must-Have Follow Ups
Creating a PPC ad is not enough — it needs a quality website or landing page behind it. If you just have a campaign, it will drive in traffic. But it’s the website that will make the customer stay and convert.
Focus on creating good landing page designs, improving the speed of your site, and developing an engaging journey for the potential buyer. Navigation should also be seamless and you can even include gated content like newsletters to interest your audience even more.
3. Ad Blindness
The final drawback in our PPC guide is the fact that pay-per-click ads can create so-called ad blindness. Constantly overwhelmed with various ads, people are becoming increasingly likely to ignore them.
You can create a website banner ad, but you must know how to market it right, as over 80% of people suffer from banner blindness according to an Infolinks study.
Today, if an ad doesn't clearly explain why you should click on it and provide a direct link to answer your question, the likelihood of being ignored will only increase.
How To Develop Your PPC Strategy
Now that you know how PPC works and what your business can gain from it, you can start crafting your own PPC strategy. Before you start, let us give you a few more tips on how to develop a good PPC strategy:
- Define your goals
- Define your KPIs
- Decide on a budget
- Conduct keyword research
- Create ad groups and landing pages
- Decide on a bidding strategy
- Test your ads
1. Define Your Goals
The first step when developing your PPC strategy is to define the specific goals you want to achieve with your campaign. These might include:
- Increasing sales
- Boosting conversions
- Enhancing lead generation
- Improving website traffic
- Building brand awareness
Your goals don’t necessarily need to include all of the above. Take some time to determine what you really want to achieve before you set up your PPC campaign.
2. Define Your KPIs
Once you have determined your goals, define your key performance indicators or PPC KPIs. Depending on your objectives, you might track some or all of the following KPIs:
- Impressions share
- Conversion rate
- Return on investment (ROI)
- Return on ad spend
- Click-through rate (CTR)
- Quality score
Tracking the right metrics is important for PPC reporting and PPC campaign optimization because it shows how effective your ads are and whether you should adjust your keywords, landing page, or another part of your campaign.
For example, if a keyword isn’t performing well, you can test other related keywords to see if they work better. Another example is if you have a solid click-through rate, but users leave your website immediately. In this case, you must consider optimizing it to provide what users expect from your websire.
3. Decide on a Budget
Before setting up a PPC campaign, you need to decide exactly how much you want to spend on it. Since you pay a fee every time someone clicks on your ad, you can set a daily maximum budget so when the target is met, the PPC platforms will stop showing your ad.
Compare different platforms to see where you can gain the most for the lowest price. Make a list of Bing Ads vs. Google Ads, for instance, and based on the results, see which platform is a better fit.
As the most frequented SERP, Google is always the number one option but Google Ads costs also tend to be higher. Make the choice based on your needs and budget limits, not the generally accepted method.
4. Conduct Keyword Research
Keywords are the core of PPC advertising so going thorough keyword research is vital. It’s all about using the right terms to ensure you rank better.
When considering the keywords for your PPC campaign, think about your customers. You need to identify the terms that they’re looking for the most and are linked to your product or service. It’s also worth checking the keywords your competitors use.
When conducting keyword research, prioritize those with high search volume since it means most people are interested in them. However, don’t forget that the more popular the keywords are, the more expensive their bids will be.
If you have a tight PPC budget, you might want to avoid bidding on high-search volume keywords. Instead, you can bid on similar, long-tail keywords that are more specific and carry a lower cost per click.
5. Create Ad Groups and Landing Pages
Once you’re done researching keywords, organize them into PPC ad groups or groups of ads that target the same set of keywords that tell the search engine when to show your ad.
Your PPC campaign can consist of one or more ad groups. It’s important to note that each ad group should have its own landing page. Of course, your ad as well as the keywords you choose need to be relevant to your landing pages. This way, your customers will be directly guided to the answer to their question — the reason why they clicked on your ad in the first place.
Hence, focus some of your time on landing page optimization. Ensure the copy is benefit-driven and concise. For example, if your ad says, “affordable windows,” the landing page should display a similar headline and message.
Aside from the copy, it’s essential to include visible and specific CTA buttons. This will lead the user to complete an action without wasting time trying to navigate your website.
6. Decide on a Bidding Strategy
A bidding strategy defines how your money is used when displaying your ads. There are a variety of bidding strategies for pay-per-click campaigns but not all of them might be suitable for your business.
You can choose between manual or automated bidding, depending on your experience, budget, and goals. Automated bidding is more convenient as it saves time. Some of the automated bidding strategies include:
- Cost per click: You pay for every click on your ad
- Cost per mille: You pay a sum based on one thousand impressions
- Cost per acquisition: You only pay if someone clicks on your ad and completes a conversion
Choose a PPC bidding strategy according to your campaign, the keywords you’re targeting, the platform you’re using, and your goals. For example, if you’re looking to get more website traffic, the cost-per-click strategy might be your best choice.
7. Test Your Ads
The final step in creating a PPC strategy is testing it. This is where A/B testing comes in.
In A/B testing, you run two similar versions of a paid ad but with one different element. This can be a headline, CTA, or ad copy. Once the testing period ends, you can compare the results and see which ad would bring you more clicks and conversions. This will also tell you whether you need to change something and improve your PPC ads.
PPC Best Practices
Our PPC guide won’t be complete without including a few PPC best practices. The following four strategies can help you set up a successful campaign and maximize your return on investment:
- Factor in ad targeting and retargeting
- Craft compelling ad copy
- Use numbers in your ads
- Track and adjust ad performance
1. Factor in Ad Targeting and Retargeting
Targeting defines who you’re speaking to and what problems you’re solving so you can create content that targets a particular group. On the other hand, retargeting is shaping your ads to target users who have already interacted with your website in some way, from completing a form to putting an item in the shopping cart.
You can look at targeting as the first step and retargeting as the second. With targeting, you’re trying out your initial audience — seeing whether they’ll be interested in your product or service. Once you’re sure there’s interest, you can dive deeper and start retargeting — going for those customers that have expressed interest in a particular product or service.
2. Craft Compelling Ad Copy
Once you know your audience’s pain points, craft your copy to address the problem and grab your audience’s attention.
Since ad copy is very limited, you need to focus on the benefits your products or services can offer and be as clear as possible. Make sure that you use the keyword you’re trying to rank for and ensure the language and messaging is consistent with your landing page copy.
Collaborating with content writing agencies that can help you create effective ad copy which will make customers click on the ad is a great idea.
3. Use Numbers in Your Ads
Another good PPC practice is using statistics in your ads. Numbers grab users’ attention as they give a certain assurance, so using them in your paid ads can increase the click-through rate and boost your authority as a trusted source of information.
An article by the University of Southern California states that while the majority of ads (31%) have an emotional pull, there is a good number (16%) that are geared toward rationality. While creating an ad that resonates emotionally with customers is important, it’s a good idea to also include relevant statistics and numbers to increase CTRs.
4. Track and Adjust Ad Performance
The final PPC tip we have in our PPC 101 guide is connected to ad tracking. Once you set your PPC campaign, don’t just forget about it. Follow its performance and make adjustments as needed.
For example, if you notice that a keyword isn’t performing well, you can apply it as a negative keyword to block your ad from displaying for irrelevant searches that won’t lead to any clicks. That way, when a user searches for that term, your ad won’t appear. Instead, it will focus on more relevant and effective keywords.
Pay-per-Click Takeaways
Regardless of the size of your business, paid search advertising can bring an abundance of benefits, including fast results, budget control, improved SEO, and more.
Pay-per-click advertising can be a rewarding journey if you know how to do it right.
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