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What is PPC (pay-per-click) advertising, and how does it work?

Heard of pay-per-click advertising, but aren’t quite sure what it is, and how it can help your business? You’ve come to the right place! Here’s our beginners guide to what PPC advertising is all about, and how it works.

First of all, what is PPC Marketing?

PPC is an advertising strategy that allows advertisers to pay only when a user clicks on one of their online ads. It’s a category of advertising that falls under Search Engine Marketing. It lets advertisers target web visitors with relevant ads when people search for particular keywords and phrases. 

The most common type of PPC Ads are ‘paid search ads’. These are the ads that appear on search engine results pages (SERP) on the likes of Google and Bing.

The main goal of PPC ads is to lead the person viewing it to click through to the advertiser’s website, where that visitor can convert into a customer - whether that means purchasing a product, filling out a contact form, or simply clicking on ‘sign-up’.

It’s an effective advertising method to help businesses reach potential customers and promote their products and services.

How does PPC Advertising work?

In order for an ad to appear on a search engine results page (SERP), a hidden auction takes place. The Ad auction is a bidding system which allows advertisers to bid on certain keywords they want to “trigger” or display their ads. 

The auction begins when a web user searches for something on a search engine. If there are advertisers who are interested in displaying ads related to the users search query - an auction will be triggered based on the keywords that are bid on by advertisers. The ad that wins the auction will appear on the results page.

How do I win the Ad Auction?

There are a number of factors that determine which ad will win the prize spot of being first place on the results page. Things like your bid amounts, the quality of your ad, and its relevancy will influence your ad rank and where your ad will sit on the results page.

For example, Google considers these elements to determine Ad Rank

  • Your bid amount
  • Ad Quality: including CTR, relevance, and your overall quality score. 
  • The context of the search: device, time of day, terms etc.
  • Format Impact: The use of extensions to enhance the format of the ad.

As mentioned above, the quality of your ad is absolutely crucial. Google uses quality scores to determine your ad’s relevance. It helps to determine your cost per click (CPC) and is multiplied by your maximum bid to determine your ad rank in the ad auction process. 

Your Quality Score is influenced by multiple factors, including: 

  • Your click-through rate (CTR).
  • Relevance of the keyword to the ad.
  • Relevance of the keyword and ad to the search query.
  • Landing page quality and relevance.
  • Your historical AdWords account performance. 

The higher your quality score, the lower your CPC will be. Search engines penalise advertisers who bid on keywords with low quality scores by rarely displaying their ads - even if they’ve got high bid amounts. 

So it’s important to ensure your ad has relevant and engaging copy, that includes high-volume keywords. 

Still not convinced? Here are some benefits that come with PPC advertising. 

 

 

While you may be unsure about the benefits of paid advertising, it plays an important role in helping a business grow and build brand awareness. Both paid and organic strategies are essential in helping a business thrive - check out our blog article to find out why!

For more digital and social media marketing insights, head to The Blackdrop Blog.   

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