From medical and legal services to cars, home décor, clothing and more, every day millions of people search for information online using internet search engines.
Regardless of what industry you’re in or what product or service you offer, you’re likely up against significant competition, battling it out for attention. Today, we’re sharing a secret that can provide you with that attention — pay-per-click or PPC.
But what is PPC exactly, and how does it work?
Buckle up! We’ll share everything you need to know about PPC below.
Table of Contents
- What Is PPC?
- How Does PPC Work?
- 5 Benefits of PPC Advertising
- Top 10 PPC Platforms in 2023
- How to Conduct Keyword Research for PPC Campaigns
- 5 Types of PPC Ads
- The Most Important KPIs in PPC Reporting
- Which Companies Should Use PPC?
- What Is Pay-Per-Click Advertising? Key Takeaways On PPC Campaigns
- What is PPC FAQ
What Is PPC?
Pay-per-click advertising (PPC) is an online advertising strategy that allows your company to appear on search engines and social media platforms when internet users are looking for specific information based on relevant keywords.
How? Keep reading.
How Does PPC Work?
Now that we know what is PPC let's see how PPC work.
When a user searches for specific information on search engines, and there is an ad spot on the search engine results page (SERP), an auction is activated.
To become part of an auction, you can use a PPC platform to define where and when your advertisement should pop up, along with how much you are willing to spend bidding on a specific keyword.
When and where your ad will appear to users is determined by three factors:
- The quality of your ad, denoted by your Quality Score
- Your bid or ad spend, stating the maximum amount you are willing to pay for a click on your PPC ad determines the ad rank.
- The expected impact from other ad formats and the extensions used, such as links to various pages and phone numbers
Keep in mind that even if your bid is not the highest, you can win the auction through relevant keywords and extensions.
Speaking of keywords — select the keywords based on your target audience and search queries that are relevant to your brand, products or services.
Ads show at the top and bottom of a SERP and include a headline, description and a URL leading to a dedicated landing page.
In addition to the main elements, an ad may contain call extensions or links to different pages. This encourages the user to interact with the company.
Regardless of the number of people who see your ad, you pay only when someone clicks on your advertisement.
Unlike showing up in organic search which can take a long time, you “buy” visibility and ad space immediately, through PPC.
5 Benefits of PPC Advertising
PPC has a number of advantages for your business. PPC helps you:
1. Reach Your Target Audiences on Search Engines and Social Media
Whether you want to reach people based on demographics such as age, gender or location, PPC marketing allows you to reach your target audiences quickly and effectively using specific and relevant ads based on keywords and search intent.
2. Gain Exposure in the Search Engine Results
According to a report by Google, search ads can increase your brand awareness by as much as 80%. PPC platforms typically approve your ad within hours, which means your company can begin gaining visibility almost immediately.
3. Advertise Your Company Locally and Globally
Selecting regions, countries or cities where you want to display your ad allows you to limit its appearance to the locations that make the most sense for your brand. For example, you can target audiences that live or work in close proximity to your company’s offices or shops.
4. Stay Competitive
Using paid advertising gives you a competitive edge over competitors that are not taking advantage of PPC. Making your target audiences aware of your brand and promoting your products or services helps you reach new potential customers that search for the services you offer before they consider companies of similar expertise.
5. Keep Full Control Over Your Advertising Budget
Having the ability to schedule your ad’s appearance according to the day or time frame, or even turn it off, allows you to control your daily or monthly spending and manage your budget.
Top 10 PPC Platforms in 2023
The two most common platforms used for pay-per-click advertising include Google Ads and Microsoft Advertising, which includes Bing, Yahoo and AOL.
Though very similar from a management perspective, the two platforms differ in their market size and potential reach. According to a 2021 Statista survey, Google has a market share of 85.55%, Bing’s market share is 7% and Yahoo’s is 2.85%.
Let’s look at how each of them can fit your PPC strategy.
1. Google Ads
Google’s advertising platform, Google Ads (formerly known as Google AdWords), is the most popular PPC advertising network, with 4.3 billion users worldwide.
Advertising on Google Ads allows you to reach an audience on 35 million sites and apps. Your Google ads will display on Google's search engine results and Google-owned platforms like YouTube and Gmail, allowing you to expand your reach.
Google Ads provide great targeting possibilities. Set demographics, such as age, gender, parental status and household income, to target quality leads.
Using Google Ads for your PPC advertising, you can run video ads on YouTube, shopping and search ads on Google, display ads on the Google Display Network and Gmail ads.
2. Microsoft Advertising (Bing Ads)
Microsoft Advertising, also known as Bing Ads, allows you to reach 250 million unique users and 724 million monthly unique searchers on the Microsoft Search Network. It is the second-largest search engine PPC advertising platform after Google ads.
Microsoft provides tools for importing Google Ads campaigns, which is time-saving and facilitates the entire advertising process. It exclusively delivers Yahoo search traffic and, as they state, “Outside of LinkedIn itself, Microsoft Advertising is the only digital advertising platform to offer LinkedIn Profile Targeting.”
Using Microsoft Advertising, you can run your search ads on search engines Bing and Yahoo, Microsoft Audience Network (including MSN, Outlook and Edge), AOL and LinkedIn.
3. YouTube Ads
In 2023, YouTube will have more than 2.6 billion active users, giving you an excellent chance to reach your target audience. Ads placement and management go through the Google Ads platform, while you can find more detailed information about audience and ad performance on your YouTube account in the Analytics section.
YouTube Ads only take place on the YouTube platform, but you can choose different formats: skippable and non-skippable in-stream ads, bumper ads, video discovery ads and masthead ads.
4. Facebook Ads
In the fourth quarter of 2022, Facebook had 2.96 billion users, which makes it the most popular social media platform ever - and a great advertising opportunity! With precise demographic targeting, Facebook allows you to reach your desired audience.
Ads take place on Facebook, Messenger, Instagram and Audience Network, supporting various formats: video, single image, carousel, slideshow and canvas (mobile).
5. Instagram Ads
The number of Instagram users will reach 1.35 billion in 2023, and as we stated before - your ads should be placed where your audience is. Since the Facebook company owns Instagram, advertising campaign creation and management take place on the Facebook Ads platform.
Ads are placed on Instagram feeds and stories and on Facebook, in several forms - a single image, video, carousel ad and collection.
6. Twitter Ads
With 450 million active monthly users, Twitter is another social media platform that provides excellent advertising potential. In contrast to many other platforms, Twitter advertising is only found on Twitter and has no network partners.
Twitter offers several ad types: Promoted ads, follower ads, Twitter Amplify, Twitter Live, Dynamic Product Ads and Collection ads. Ads are displayed on the Twitter website and mobile app and can contain a combination of textual and any other content that the platform supports.
7. LinkedIn Ads
In January 2023, LinkedIn had 900.2 million users, which means that the potential reach of ads on this platform is 900.2 million! Another interesting statistic is that LinkedIn users have 2x buying power compared to average Internet users. Target the one that matters the most to your business using company targeting, contact targeting or retargeting options.
Ads are placed on the LinkedIn website and mobile app, while LinkedIn Audience Network contains thousands of mobile sites, apps, and ad exchanges. Available formats include sponsored content, sponsored messaging, and dynamic and text ads.
8. Pinterest Ads
Nearly 445 million people visit Pinterest every month, looking for ideas, the latest trends and products. Many of Pinterest’s visitors have purchasing intentions; therefore, advertising on this PPC advertising platform can significantly boost your sales.
Ads are available in the following formats: promoted pins, one-tap promoted pins, promoted video pins, cinematic pins, and promoted app pins. Ads are displayed on the Pinterest website and mobile application (no network partners).
9. Amazon Ads
Placing PPC ads on the platform users visit to make a purchase is a logical and profitable choice. If you are an Amazon seller, advertising campaigns will increase conversion rates and save money on your marketing campaigns.
Amazon ads are placed on the home page, in search, product detail pages, Twitch and thousands of websites and mobile apps from the Amazon partner network. Ads are available in several formats: sponsored products, sponsored brands and sponsored displays, video ads, audio ads and custom advertising solutions.
10. AdRoll
AdRoll is ideal for small businesses targeting a specific audience. The platform has an outstanding retargeting feature that displays ads to people who visited the website but didn’t complete the purchase.
AdRoll Ads are displayed on websites and blogs that use the AdRoll content recommendation widget, as well as on apps, Facebook, Instagram and emails.
Ads are available in static (static web ads and static social ads) and dynamic (dynamic web ads and dynamic social ads) formats.
How to Conduct Keyword Research for PPC Campaigns
Keyword research is one of the most important components of every PPC campaign. It helps advertisers discover keywords and key phrases users enter on search engines when looking for a specific product or a service.
Gathering the most profitable keywords and using them in PPC campaigns increases the chances that the preferred audience will see the ad.
Keyword research optimizes PPC advertising campaigns for visibility, relevance, and profitability. The best way to conduct it is through the following steps:
1. Define Your PPC Campaign Objectives
In paid advertising, you’re putting your products or services right in front of people searching for them. Therefore, you must clearly see how PPC will help your business grow - aka, your business objectives.
PPC objectives can be classified into two categories:
- Metric goals refer to measurement results that show the performance of your ad - for example, the number of impressions or clicks.
- Conversion goals refer to the final action your customers should take when going through the sales funnel.
Identifying the objectives of your paid ads will help you align them with the searcher’s intent, which is essential for a successful PPC campaign.
2. Use Keyword Research Tools
Brainstorm all the relevant keywords related to your products or services that come to your mind. Some of these keywords are probably the ones your audience enters when searching for your offerings. Since your strategy won’t be based on guessing, this step will help you create a foundation for keyword research with appropriate tools.
There are many open-source (free) and premium keyword research tools. Some of the best you can use are Ahrefs, Moz Keyword Explorer, SEMrush, Ubbersuggest, Majestic and Google Keyword Planner.
These tools can help you discover primary and secondary keywords and all other relevant keyphrases that would bring qualified leads to your website. You can even spy on the competition to find out keywords they rank for.
3. Check Out Keyword’s Key Metrics
Before selecting keywords for your PPC advertising campaign, check out their two most important metrics - monthly search volume and cost-per-click (CPC).
- Monthly search volume discovers how frequently people search for a specific keyword during one month. The higher the search volume, the higher the possibility that your targeted audience sees your ad.
- CPC refers to the cost you pay each time someone clicks on your ad. CPC can drastically vary, depending on the keyword you select. Keywords with higher CPC usually perform better but require a higher budget for your advertising campaign.
4. Check The Existing Keywords
When looking for new keywords for your PPC campaign, don’t forget that your content already ranks for many. Use the abovementioned keyword research tools to discover your website's best-performing pages and the keywords they are optimized for.
Enter your competitor's website into your keyword research tool to find out their chosen keywords. You can use Google Ads Auction Insights to compare your performance with other advertisers that are participating in the same auctions as you.
5. Pair Keywords With The Right Search Queries
Google Ads provides three ways to pair your keywords with users' search queries:
- Broad match is the default matching option and it targets ads to your exact keyword as well as any related phrases.
- Phrase match is more specific than the broad match. It matches phrases in the order you specify. For example, the keyphrase “best perfume” would match with “what is the best perfume” but not “which perfume is the best”.
- Exact match pairs only with the exact keywords.
Your keywords should match the user's search queries. Therefore, you should be as precise as possible; keyword research will help you with that.
5 Types of PPC Ads
Pay-per-click advertising includes the following types of PPC ads:
1. Paid Search Ads
The most common type of PPC ad is paid search ads, for example, Google Ads. They appear on the top and at the bottom of Google search results; they are always labeled with a discrete square containing the word “ad,” which indicates that the search result is paid to advertise. These ads are textual; they don’t include images or videos.
To create paid search ad, choose relevant keywords and enter the maximum amount of money (bid) you’re willing to spend for one click on your ad. Bid and quality scores (Google’s perception of your ad’s quality and relevance) will determine your position in Google paid search results. Once you’ve entered all the necessary data, your PPC advertising campaign will start.
2. Display Ads
Another popular and often-used type of PPC ad is display ads. They are shown in the articles and videos in Google search results and on other websites users browse. Unlike paid search ads, display ads' text is enriched with images.
Setting up display ads is pretty much the same as with paid search ads, but with one significant difference - ad copy is checked by Google, so you’ll have to wait for approval before the ad launch. Check out image ad requirements regarding quality, relevance and forbidden content to meet Google’s standards.
3. Social Media Ads
Considering that billions of people use social media platforms daily, social media ads are the most popular among marketers. They are placed on various social media platforms - Facebook, Instagram, Twitter, Pinterest, Youtube and even LinkedIn.
To set up social media advertising campaign, choose the platform your target audience uses the most. Choose the ad format, depending on the goals you're aiming to achieve. Use demographic targeting to precisely reach the audience your ad will resonate the most with.
Many SM platforms provide ad analytics; monitor them to get insights into what’s working and what’s not to adjust your campaigns if necessary.
4. Remarketing Ads
Many people get intrigued by your ads and become your prospects aka leads. They visit websites to learn more about products or services but don’t make a purchase. Sometimes they need more time to decide, but other times they need a slight push in the back.
That’s where remarketing ads barge in. Remarketing ads remind leads of your brand, inviting them to revisit your landing page and finish what they started.
This type of PPC ad brings a high conversion rate. To set it up, you’ll need to use Google’s remarketing code, aka tracking pixel.
Place tracking pixel on your website to see what pages the audience visits the most and to sort them according to products/services they are interested in. Create relevant campaigns for each product - one cannot cover them all.
Launch remarketing ads and Google will display them to leads who abandoned your pages without conversion.
5. Google Shopping Ads
Google’s shopping ads focus on putting compelling images of similar products from different companies right in front of your audience’s eyes.
Ads display information about the product (name and price) in carousel format, right above Google search results. Clicking on the ad will lead to the advertisers' website.
Select the " shopping " section on your Google Ads account to create a Google shopping ad. Enter all necessary information - campaign name, bid, inventory filter, daily budget, location, and devices you want your ad to be displayed.
After filling up all the required information launch the ad and check out how it is shown to your audience (with this type of ad, you’ll have a preview).
The Most Important KPIs in PPC Reporting
One of the key features of PPC advertising is the fact it can be tracked and measured easily using the reporting and analytics tools of the respective PPC advertising platform.
The main metrics you should monitor and analyze include clicks, cost per click, click-through rate and conversion rate. They will provide information on how many people clicked on your ad and how many converted so that you can evaluate if your campaign was a successful one.
When examined separately, PPC metrics will not give you a full understanding of how your ad is performing. The metrics should be analyzed together to help you:
- Determine the efficacy of your campaign
- Tweak your ads to optimize performance
- Give you ideas about what is working well so that you can implement it in your future campaigns
- Optimize your website
Here are some of the main metrics to consider when evaluating the performance of your PPC ad:
1. Clicks
Clicks show how many people clicked on your ad and were navigated to your landing page.
Although clicks as a metric do not provide information about your return on investment, make sure your ad is being clicked on — this means it is engaging and meets the user’s search intent.
2. Cost Per Click
The cost per click (CPC) shows how much money you’re spending for each click on your ad.
A revenue-to-ad ratio of 5:1 is considered acceptable for most industries. This means you will produce a revenue of $5 for every dollar spent. Another way to express the same ratio is 20% cost-per-acquisition.
3. Click-Through Rate
The click-through rate shows how many people clicked on your ad out of the total number of people who have seen it.
A high click-through rate demonstrates people are clicking on your ad and your ad is meeting your goal to raise interest and boost your brand visibility
CTR varies by industry and network used.
The average CTR on Google Ad’s paid search where your ad appears at the top and bottom of the search results is approximately 2%. It is 0.35% on display networks where your ad shows as an image-based ad during consumers’ browsing sessions.
4-5% is considered a good CTR on the search network. Make sure you compare yourself to your competitors to evaluate your ad performance objectively. A low click-through rate means you must reconsider your:
- Your ad placement
- Your ad appearance and copy
- Your selected keywords
To improve your CTR rate:
- Add the keywords to your headline
- Use the keywords in your copy
- Focus on the benefits rather than on the features of your product or service
- Use visuals in your ad
- Include CTA buttons
4. Quality Score
Quality score is not a KPI per se. Measured on a scale from 1 to 10, it is a diagnostic tool that shows how your advertisement quality compares to other ads.
A high-quality score is indicative that your ad and landing page are more useful and relevant to users who search by specific keywords, in comparison to other companies.
The quality score depends on the type of selected keywords:
- For high-intent commercial keywords, a good quality score is between 7 and 9
- For branded keywords, a good quality score is between 8 and 10
- For low-intent keywords, a good quality score is 7
5. Conversion Rate
From filling in a contact form or subscribing to a newsletter to making a purchase, conversion is any action you want your consumer to take when engaging with your company.
The conversion rate shows the total number of conversions, divided by the total number of clicks on your ad.
This number is not indicative of the ad quality or the success of your PPC campaign. Rather, your conversion rate gives you insights into the effectiveness of your landing page, and whether it’s designed and optimized to meet users’ needs.
The average conversion rate for a PPC ad is 2.35%, but aim for a target of 5% or higher.
To improve your conversion rate:
- Improve your quality score
- Select the right keyword match type
- Optimize your landing pages
- Optimize your sales funnel
- Conduct A/B testing
6. Cost Per Conversion
Cost per conversion is one of the most important PPC metrics. It shows how much you paid to generate a conversion. To understand if your PPC campaign was cost-effective, compare it to the amount each conversion brings to your business.
If you spend $1,000 on pay-per-click advertising and you generate 20 sales, your cost per conversion is equal to $50. To sum it up, you’re spending $50 for each sale.
The ideal cost per conversion rate varies based on the industry. If you are in the law firm business, for example, $50 is negligible to the cost of your services. On the other hand, if your product price is $35, a cost per conversion of $50 is clearly a loss.
To decrease your cost per conversion:
- Select high-converting keywords
- Implement negative keywords lists to limit your audiences
- Analyze your keyword bids
Note that even if you consider your campaign effective, the results can be improved further. Test various ad versions, schedules and budgets to optimize your campaign.
Analyze your PPC reporting metrics holistically to estimate the success of your campaign and the efficacy of your website page
Which Companies Should Use PPC?
Although PPC can be valuable for any business, its implementation is especially beneficial for:
- Recently launched companies
- Companies that are in the early stages of growth
- Companies that are planning to expand their areas of expertise
- Companies that operate locally
- Companies that operate in a highly competitive environment
- Companies that offer hard-to-find products such as supplies for unusual hobbies
- Companies that offer seasonal or event-based services such as florists or wedding vendors
- Companies offering high lifetime values such as dentists, doctors and universities, along with utility, cable and internet providers
- Companies that offer high-margin services such as legal firms, repair companies, home appliance businesses and luxury brands
If you do not recognize your company among the categories listed above but are considering a PPC campaign, contact a PPC agency with a proven track record.
Their experts will look into your industry and competitors and create a PPC campaign for your brand.
Key Takeaways On PPC Campaigns
What is PPC? PPC means pay-per-click. It is an online advertising strategy that secures intent leads based on keywords that are entered into search engines.
While companies of any size and industry can reap the benefits of PPC, it is especially useful for new companies, companies that plan to expand their services or businesses that wish to reach customers based on geographic location.
The benefits of PPC include:
- Reaching your target audiences
- Gaining exposure for your company
- Advertising your company locally and globally
- Staying competitive
When measuring the performance of your PPC campaign, consider the following metrics:
- Clicks
- Cost per click
- Click-through rate
- Quality score
- Conversion rate
- Cost per conversion
If you’re not sure where to start, contact an agency for help. Outsourcing the services of some of the best PPC companies as well as Google Adwords agencies can help you with this.
What is PPC? - FAQ
What's the difference between PPC and CPC?
PPC stands for "pay-per-click," a type of paid advertising where advertisers pay each time someone clicks on their ad. CPC, on the other hand, stands for "cost-per-click," which is the amount of money advertisers pay for each click on the ad.
So, the main difference between PPC and CPC is that PPC is a broader term that refers to the overall advertising model where advertisers pay for each click on their ad, while CPC is a metric used to measure the cost of each click in a PPC marketing campaign.
What is the difference between PPC, SEM and SEO?
PPC (Pay-Per-Click), SEM (Search Engine Marketing) and SEO (Search Engine Optimization) have one similarity - they are all online marketing strategies developed to drive traffic to a website, generate leads and boost conversions. However, the way they’re achieving these results differs:
- PPC is paid advertising model where advertisers pay each time someone clicks on their ad. PPC ads are primarily displayed on search engines and websites relevant to the advertiser's target audience, but also on social media platforms.
- SEM (search engine marketing or search engine advertising) refers to all search engine marketing strategies, paid and unpaid, that aim to improve a website's visibility in SERPs (search engine results pages). SEM includes PPC advertising and SEO.
- SEO (Search Engine Optimization) is the practice of optimizing all website performances to improve its ranking in SERPs. This is done by a number of on-page, off-page and technical procedures.
