What is PPC? Your complete guide to PPC (pay-per-click) advertising

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What is PPC?
In a nutshell, pay-per-click (PPC) is an online marketing model. This form of advertising is prevalent and most closely associated with Google, though you can see PPC ads on Facebook, Bing, and other places as well. With PPC marketing, the advertiser has to pay a fee every time someone clicks on their ad — hence the name pay-per-click.
Relevance
Relevance is crucial when it comes to pay-per-click advertising. The users you’re hoping will click on your ads are searching for specific services, information, or products. With PPC, advertisers can bid for ad placement, typically through the sponsored links via a search engine, such as Google. 
The beauty of PPC is that advertisers can display a targeted ad at the precise instant that someone searches a term. For example, if someone searches “red dress,” the advertiser can bid to have their ad placed at the top of the list, relevant to red dresses. 
Basic objectives
Pay-per-click has three main goals:
Generate leads
Increase sales
Promote brand awareness
When a user clicks on your ad, you have to pay the search engine a fee. When your ads are hyper-relevant and work to your advantage, the fee is worth it. The person that visited your site is worth more to you than the fee you pay. For example, if your cost per click is about $4, but someone comes to your site and purchases your product or service for $300, the price becomes trivial in relation to the profit. 
Why choose PPC?
There are good reasons to choose PPC for small businesses and larger businesses alike. Once you understand how PPC operates and how to build effective advertising campaigns, you can examine the benefits of PPC and how to maximize them. 
Benefits of PPC
Here are some benefits of PPC, aside from choosing how much you want to spend and only paying when you get a visitor to your site. 
Track your goals
Businesses should always have a goal or two in mind. Your first goal may be as simple as attracting potential customers to your site. Perhaps you offer a service, and the purpose of your ad is to get people to complete forms to sign up for your company’s services. Tools such as Google Analytics can help you track your goals. See how your ads are performing in real-time, and decide what needs to get done to reach your goals more efficiently. 
Further reading >> Key trends in PPC, reporting and analytics
Gain rapid exposure
You can speed up your site’s visibility and get your brand out there more quickly. Platforms usually approve ads the same day, providing maximum exposure almost immediately. This could be a text ad via Google search, an image ad through Instagram, or even a video featured on YouTube. Using multiple platforms in different formats can increase your brand’s visibility. 
Reach your target audience
You can quickly and effectively reach your target audience by using a program such as Google Ads . Want to target men in their late twenties who live in Boston, making around $75,000 a year? PPC will help you target the specific demographic that you’re interested in reaching. You can even target individuals based on their behaviors and interests; social media sites like Facebook can help you get your ad to the group that’s likely to convert into a sale. 
Further reading >> Google to prohibit demographic, zip code targeting for housing, employment, credit ads
Experimentation
With pay-per-click, you can eliminate any aspects of your campaign that aren’t working to your benefit. If you’re between two different CTA’s, for example, you can test both of them with other ads, and you’ll be able to see which performs best over a set period. This is the same concept, whether it’s your CTA headline, meta description, or your landing page. 
Further reading >> How to set up a simple Google Ads testing framework for continual campaign optimization
Become more competitive
Keywords are really competitive these days! That means if a business doesn’t have domain authority, it’s more challenging for them to reach their target audience or appear at the top of search results. Nowadays, there are so many ads that organic search results appear in the middle of the page instead of at the top. That’s because many businesses are using PPC to gain exposure that they otherwise couldn’t access. 
When you use paid advertising, it allows you to excel in competitive markets. You’re able to attract users that may not be aware that your company exists. You can promote marketing initiatives, get a higher rank on challenging keyword terms, and even improve the public’s awareness of your brand.
Essentially, PPC is a shortcut to reaching the top of your pool of competitors. If you perform optimally, PPC will prove to be an integral part of your inbound marketing strategies. 
What’s the difference between SEM and PPC?
Though these terms get used interchangeably, there is a difference between Search Engine Marketing (SEM) and Pay-Per-Click. 
SEM is an umbrella term that encompasses PPC but is not limited to only this form of advertising. It references activity that intends to improve how easy it is to find a website through a search engine. SEM is both paid and unpaid, PPC, or organic traffic. 
PPC is online advertising that works with search engines and other channels such as video ads (YouTube) and picture ads (Instagram/Facebook). 
Top PPC terms and acronyms
As we continue along in this PPC guide, some phrases can be confusing, especially if you’re not familiar with the terminology. Additionally, should you plan to dive into paid advertising, there are some terms and phrases that you’ll want to be aware of. To help, we’ve assembled the top PPC terms as a reference point while you read. 
Cost-Per-Click (CPC)
This term refers to the fee that an advertiser has to pay every time someone clicks on their ad. CPC is like bidding in an auction. Advertisers have to bid between one another to determine how high of an ad placement they can obtain. A higher bid results in a higher placement. 
The advertiser will set their CPC at a maximum price. This price is the highest amount they are willing to pay for a click on their ad. The following formula is how the final cost-per-click is determined: 
(Competitor’s Ad Rank / Your Quality Score) + 0.01 = Actual CPC
*CPC and PPC are not the same; PPC is a marketing model that involves paying a fee for ads. On the other hand, CPC is the actual fee that is spent for every click your ad gets. 
Search Engine Marketing (SEM)
A pertinent objective of any form of digital marketing is to achieve a high ranking for a specific (target) keyword. This ranking can occur through various avenues. Search Engine Marketing (SEM) is paid or unpaid digital marketing on any search engine like Google, Bing, or Yahoo.
Unpaid advertising refers to search engine optimization (SEO). That means that the content of your page ranks high when people search for particular keywords, and it speaks to the relevance of your page. This form of advertising is organic, as opposed to PPC. Not all PPC occurs on search engines, however. Social media platforms have PPC ads as well, like Facebook and Instagram.
Clickthrough Rate (CTR)
Your CTR is used to read the performance of your ads, keywords, and free listings. The clickthrough rate is the number of clicks that you get on each ad, divided by the number of times that your ad gets shown. The formula is as follows: clicks / impressions= Clickthrough Rate.
Ex: Six clicks and 150 impressions would yield a CTR of 4%. 
Ad Rank
The ad rank governs the positioning of your ad on the SERP or search engine results page. It equals Maximum Bid x Quality Score. 
Quality Score
This score gets generated by the search engine based on your CTR, keyword relevance, landing page quality, and previous performance on the search engine results page. 
*Note: Your CTR gets measured in comparison to the mean CTR of other ads in the same position.
Maximum Bid
The maximum amount that you’re willing to pay as an advertiser for every click your ad receives. 
Campaign
When you first decide to set up PPC ads, you have to select an ad campaign. The campaign is the message that you’re trying to convey when you create an advertisement. It’s what you want to say to the audience. 
Cost Per Mille (CPM)
CPM is also referred to as cost per thousand. This term means the cost of 1000 impressions. It’s more frequently used for display ads and social ads. 
Ad Group
Of course, every ad won’t work for every keyword. They’re unique, and therefore, you will probably create groups of ads for your campaign. The ad groups get based on highly relevant keywords. You also have the option of setting a CPC amount for every ad group you create. 
Ad Text
Your keywords should influence your ad text. Keep in mind, your Quality Score gets dictated by the relevancy of your ad. Therefore, your ad text has to match the target keyword terms.
Landing Page
The landing page is crucial as a part of your PPC strategy. This space is where potential customers will end up after they’ve clicked on your PPC ad. Ensure that your landing page follows the best practices that will result in conversions (sales).
Your landing page may be your homepage, a specific page that speaks to the keyword you’ve selected, or somewhere else entirely. Either way, make sure it has the most helpful information to capture the attention of visitors.
Keywords
Keywords are the terms that inform search engines which inquiries you’d like your ad displayed alongside. Your ad group has to target a specific set of key terms and relevant keywords on the search engine results page. 
PPC platforms
There are a few popular platforms that use PPC ads- Google, Bing, Yahoo, etc. For the sake of brevity, we’ll focus on the two programs that stand out the most: Google and Microsoft Advertising. 
Google Ads
Most everyone in the world has heard someone at some point say, “Hang on, let me Google that!” That pretty much speaks to the fact that Google searches reign supreme amongst search engines; the popularity is unmatched. For that reason, the fees are higher for paid advertisements. 
Advertisers bid to have their ad displayed, their services offered, a product listed, or a video featured on Google. Google also provides the option to display your ads on mobile apps, videos, and non-search websites (search partners). 
Google Ads is the largest pay-per-click platform. Google processes more than 40,000 search inquiries per second. This figure means there’s a great chance that your ad will get seen by your intended audience, which may result in a customer/profit. Google Ads is perfect for both Fortune 500 companies and small businesses as well. 
Check out our full coverage of all things Google Ads.
Microsoft Advertising
Microsoft Advertising through platforms such as Bing has a unique set of users. Bing is responsible for 37.7% of desktop searches in the United States and around 15 billion searches worldwide every month. You’d be surprised to know that Microsoft search networks can connect you to roughly 46.5 million searchers that are inaccessible through Google. 
Partner sites for Microsoft Advertising also include Windows 10, Microsoft Office, Cortana, third-party platforms, web results for Siri, Spotlight Search, and many more. 
You even have the option of targeting your ads to different times and days of the week, different geographic regions, and diverse demographics. 
Check out our full coverage of all things Microsoft Advertising.
Targeting and retargeting in PPC
Targeting and Retargeting are significant components of PPC. For a successful campaign, both should be in your plan. Here are the differences between targeting methods and retargeting methods within paid advertising. 
Targeting
You really can’t have a fine-tuned PPC campaign without targeting, primarily because it would lack direction. Who are you speaking to? Whose needs are you meeting? Targeting involves identifying and intentionally creating content, connections, and platform usage that targets a particular group of people.
That can be a specific demographic, geographic, or psychographic audience. It all depends on the audience’s concerns and needs. You can also have targeted ads that focus on the content. Below is a breakdown of the different types of targeting strategies that an advertiser can employ.
Audience Targeting
Affinity: “With affinity audiences, you can reach people based on a holistic picture of their lifestyles, passions, and habits. Affinity audiences have demonstrated a qualified passion in a given topic, allowing advertisers to reach the people that matter most with their products or offerings,” according to Google Ads documentation .
Demographics: This category “enables you to reach broad segments of the population that share common traits, such as college students, homeowners, or new parents.”
In-market: This targeting displays ads to users that have searched for services and products similar to yours. Perhaps they’ve already made a purchase or are thinking of making a purchase, which could lead them to interact with your ads.
Similar audiences: This strategy simply means that you’re targeting people whose interests may not be precisely aligned with what you offer, but their interests are similar enough that they may interact with your site. 
Custom intent: Advertisers can choose relevant phrases or words and display ads to the people most likely to make purchases or engage the site by using “custom intent audiences.” This feature also allows you to add URLs for related YouTube content and websites that correlate to audience interest. 
Content Targeting
Placement: Focus on websites within the Display Network that your customers frequent. This type of targeting only searches your selected sites when looking for relevancy. This strategy is called managed placement, and it doesn’t require any keywords. 
This targeting differs from contextual targeting, which is more like automatic placement. It focuses on relevancy that’s directly related to the keywords that you’ve chosen. 
Topics: You, as an advertiser, can target one particular ad to multiple pages regarding specific topics at one time. This form of targeting gives you access to a broad range of results pages on a Display Network. 
For example, Google Ads will analyze the web content and consider other factors such as language, page structure, text, and link structure. Then, it regulates the integral themes of every webpage and targets certain ads based on your selected topics. 
Display expansion for search: This option allows your platform, such as Google, to find users on your behalf. Using a combination of smart targeting and automated bidding, the program does the work for you, and you reap the benefits. This targeting strategy works for both Display Network campaigns and Search Engine campaigns.
Content keywords: Select keywords that share relevancy with your service or product, target users that are making search queries using those precise words. You can opt to set a group of keywords to reach particular demographics or to meet goals. For example, you can focus on a specific product that you want to boost sales for at the moment. 
Retargeting
Now, shifting to retargeting , the focus is placed exclusively on users that have already engaged with your site. This interaction may be a visit or an actual conversion, meaning they performed the task you wanted them to perform. The actions that they have taken will trigger a retargeting ad. 
For example, they could have clicked on a particular product, filled out a form, put items in their shopping cart, or even just visited a site page multiple times. Once these actions happen, a pre-set cookie in the person’s web browser permits businesses to retarget them. They will get targeted through ads based on whichever action they executed. 
Here are some retargeting triggers:
Users that have engaged your site by interacting with digital content like ads, social media posts, videos, and so forth
A visitors history of searches online
Used that have recently visited a site similar to yours
Subscribers that were willing to interact with any emails that you sent them
Users that share mutual interests based with your current target audience, with relation to the content
Retargeting ads are also on third-party websites via the Display Network of your chosen platform. An example of this is that both Google and Microsoft let businesses access their site visitors when they’re browsing other sites after leaving your site. 
This strategy increases your chances of the user coming back to your site because you’re getting their attention on other websites that they view often. 
On-site interactions, the most popular form of retargeting, mean you’re trying to re-engage users, which is why we previously described. 
Here are a few ways that you can go about retargeting visitors that have already frequented your site:
Be sure to deliver content to those subscribers that have engaged your emails and may not have made a purchase or completed your desired action but have shown interest.
Re-engage some visitors through the same medium that they originally found your site through, like social media.
Try to engage visitors by showing them ads with a specific product that they previously interacted with when they were on your site.
The other approach to retargeting is off-site interaction. This method allows for engagement with consumers that have not interacted with your site directly, but their search engine behavior indicates that they may be a successful conversion. 
These users would share similar interests (based on keyword searches) with those who have been previous customers of your services or products. They may also have had interactions with partner sites that have similar content as your website.
This strategy is excellent for businesses trying to attract new leads and drive users to their site. 
Other aspects of your campaign
You may want to try a combination of ad types to determine which works best for your business goals. The most common form of PPC is search ads, displayed through search engine results. Display ads let you place images on external websites, including media sites. Social ads are featured on LinkedIn, Twitter, Facebook, and Instagram. You can pay a fee to have your ads displayed in the social feeds of your target audience. 
Remarketing is a strategy that collects the information of users who previously interacted with your website. You then send emails to them to remind them to come back to visit your site and re-engage in some way. This could be filling out forms, purchasing a product or service, or simply visiting a specific page of your website. 
How to structure your PPC account
It takes a lot of thought and effort to build a successful PPC campaign. You have to do some keyword research and select the most relevant terms, organize those terms into ad groups and campaigns, and set up landing pages that have been optimized to result in conversions. 
The search engines tend to reward the advertisers that have created uniquely targeted PPC campaigns by charging less for every ad click. If your ads and content prove to be satisfying and useful to consumers, Google charges less money per click, which leads to a higher profit for your company. That’s why it’s important to know the right way to structure your account.
The following is an overview of the structure:
Campaign Settings
Ad Copy
Ad Extensions
>>> Read more about PPC account structure in Chapter 6 of our PPC Guide: Introduction to Search campaign structure: Ad groups, keywords, ads and ad extensions
Different PPC settings
There are three types of campaigns that you can run: search network, display network, and search network with a display opt-in. 
Search Network
This is the most popular choice for targeting. The search network features google.com and their search partners like amazon com, aol.com, and many others. Microsoft uses bing.com, yahoo.com, and other affiliate sites as well. This is for the most part, keyword-based; ads are shown based on search queries. 
Display Network
This refers to the network that consists of millions of other sites that have agreed to display Google/Microsoft images, video, and text ads. The ads are shown throughout the site, but they don’t use the standard keyword research targeting. Instead, these ads focus on demographics and audiences. 
An example of this form of targeting would be researching marble, the material. Ads that are linked to sites that sell marble countertops may be featured, even though the user wasn’t looking to purchase anything necessarily. They have now become aware of your brand when they otherwise would not have known about your company. 
Search Network with Display Opt-In 
This combination strategy employs the use of both networks. The way this option works within Google is that you can create a search network campaign, select the display opt-in, and Google handles the rest. Google regulates where and when your ad might perform the best, as opposed to you choosing for yourself. 
Keyword Selection
As an advertiser, you’ll start by selecting a theme and constructing individual campaigns. Your PPC campaign may be “Countertops”. Within your campaign, you would want to choose subcategories that go along with your theme; these are known as ad groups. 
Your ad groups could include:
Granite Countertops
Every ad group has to contain keyword variations that match the theme. View the following example:
Marble countertops for sale
Countertops marble
Marble countertop companies
You must then pick a match type for a keyword. Here are the match types that you can choose from:
Exact: Keywords must be typed in verbatim (“Marble countertops”)
Exact with a Close Variant: Keywords must be typed exactly, but there can be variations or misspellings (“Marbul countertops”)
Phrase: Keywords have to be typed in the right order, even in the presence of additional words before or after the phrase (“Nice marble countertops”)
Phrase with a Close Variant: Keywords have to be typed in the right order, even in the presence of additional words before or after the phrase; there can be some misspellings or variations (“Marble countertops that are nice”)
Microsoft Advertising announced that they will do the same beginning in May 2021.
Negative Keywords
You can add negative keywords to your campaign that will remove traffic that you don’t want. For example, let’s say your company sells expensive products. If you add the word “cheap” to your list of negative keywords, queries that feature this word won’t return your ad. 
Further reading >> Proactively building negative keyword lists in Google Ads is now more important than ever
Location targeting
Advertisers must be specific with showing their ads in the desired locations unless it is an online service and location has no bearing on their target audience. 
Time Targeting
Just as you can program your ads to be shown on specific devices or a particular location, you can also set your ads for certain hours and days. Weekends, for example, could generate more revenue; bids could be higher on Saturday and Sunday as a result of popularity. 
Budget
Work within your daily budget. Your budget should be based on your account and performance goals. Test the waters first and see what works best for your company. 
Delivery Method
You can choose to have standard or accelerated delivery when you set up your campaign. Standard delivery means that your ads will be shown throughout the day at an even pace. This is a good choice for advertisers that have budget concerns. Accelerated delivery will ensure that your ads get shown continually until your budget has been exhausted. 
Types of ad copy
After you’ve created the ad groups and chosen your keywords, you can now write ads. Ads should have the keyword theme, any intended value propositions, and finally, a call to action. 
Expanded Text Ads
Here is a sample search ad structure for Google Ads (text):
Headline 1 – Including spaces, up to 30 characters
Headline 2 – Including spaces, up to 30 characters 
Description Line – Including spaces, up to 80 characters 
Path 1 – Not including spaces, up to 15 characters
Path 2 – Not including spaces, up to 15 characters
*No excessive punctuation, capitalization, or misleading statements are allowed. Ads cannot contain excessive capitalization, punctuation, or misleading statements. 
Every ad group that you create should include at a minimum, two ads for purposes of testing. Make sure that these ad copies are formatted for both mobile and desktop viewing. 
Product Listing Ads 
These are eCommerce PPC ads that contain images, product titles, and prices. These types of ad copies use Google’s product feeds, and they are tied to a Google Merchant Center Account. With Microsoft Advertising, they have a similar feature that’s known as Product Ads; this setup requires a Bing Merchant Center Account. 
Dynamic Search Ads
These are search ads that are shown based on your website content. Google scans your website and matches closely related keyword terms to your content. At that point, the landing page and headline are dynamically generated to be matched with keywords. 
Further reading >> Are your DSAs really outperforming standard ads? Find out with this ad copy length performance analysis script
Image Ads
If advertisers choose Display Network campaigns, they can use image ads. These ads will be shown around and within millions of sites. Your selection can also be tailored to automatically adjust the size of your image, depending on where it gets displayed. 
These are the 19 standard image sizes:
200 x 200
320 x 100
General types of ad copies:
Short-Form Ad Copy: Includes display ads, Google ads, and social media posts. Usually encompasses a headline and a call to action. This type of ad copy has to hit home quickly for viewers, use few words, and be intensely effective. Your wording should be clear, persuasive, and focused on one compelling benefit.
Clickbait: Most people hate this type of ad copy because it’s not necessarily the most reliable or honest. However, it does at least, for the moment, capture the viewer’s attention. To be considered less sketchy, effective clickbait should have numbers, frequently asked questions, and verifiable information.
Long-Form Ad Copy: This type of ad copy gives you room to disclose relevant details about your company such as the history, testimonials, and additional benefits that customers get by choosing your company. Sometimes users won’t want to read paragraphs of information. For others, it gives them a more comprehensive understanding of your business, which works in your favor. 
Testimonials: These reviews of your product or service work extremely well because it makes potential customers feel more secure about the purchase or desired action. It offers validity for the quality of your company and builds trust with consumers. 
Ad extensions
An ad extension is an additional link that gives supplementary information regarding your business. This enhances basic forms of PPC advertising. Some ad extensions are manual, while others are automatically generated. 
The main benefit of an ad extension is to improve the CTR of the ad’s headline since the ads are more prominent on the results page. There are numerous ad extensions. 
Sitelink Extensions
These extensions are additional links to assist searchers with deeper navigation on your website. Sitelink extensions are manual, and you can add them in the editor or within the interface for Microsoft or Google and Microsoft. Remember that site links should be relevant to your keywords.
Location Extensions
These extensions are excellent for brick-and-mortar companies. A location extension displays the company address, and you can choose this extension through both Microsoft and Google. 
Call Extensions
Also available for Google and Microsoft, call extensions give advertisers two choices. For moving devices, a call extension supplies ads with the ability to make a call by clicking the link. That’s easy access to your business that users will appreciate. 
For a desktop ad, the phone number is displayed near the ad, giving users the option to click the ad or call your company. 
App Extensions
Exclusive to Google, app extensions are perfect for businesses that want to expand to promote app downloads and interaction. 
Further reading >> Microsoft Advertising now offers Filter Link Extensions
Automation in PPC
When it comes to PPC automation , think of Artificial Intelligence (AI). This feature is when technology like machine learning and AI is used, to optimize search engine marketing strategies. Automation has become a necessity for most companies, due to the sheer number of networks and platforms available. It’s nearly impossible to manage it all, especially if you have a large company with a lot of PPC campaigns. 
By using PPC automation you can generate higher conversion rates, capture the right traffic, and optimize your ads, all while using the data you currently have. 
Benefits of PPC Automation
Marketing managers can focus on internal processes and top-level strategies when using automated services. Some common benefits to automation include:
Creative Ad-Copy: Large PPC accounts with numerous ad groups can optimize their content using the data feed. 
Reporting: Get instant access to the data that you need, as soon as you need it. These tools will produce insight that’ll help inform strategic decisions without organizing all of the data manually.
Bid Management: This is very time-consuming and can be done efficiently by PPC automation. Having done the calculations for you, the automated system can manage your bids to ensure maximum profitability and with more accuracy as well.
Increased Efficiency & Productivity: With more free time, marketing strategists can get other work done in areas that help the company reach their tech goals faster. 
Further reading >> When to use PPC automation (and when not to)
PPC tools and software
There are a lot of variables that need to be tracked with PPC ads. Certain PPC tools and resources can make the process smoother before, during, and after. You can monitor ads from the platform, have well-organized spreadsheets, and more. 
Be sure that you select tools and software that offer tracking, scheduling, reporting, multi-user support, ad grading, and cross-platform management. 
A few highly-rated PPC tools and software:
Google Keyword Planner
And more!
PPC can help businesses small and large
Hopefully, this PPC guide has helped you begin to understand pay-per-click advertising. How to properly structure your PPC account is daunting at first, but eventually, it gets easier. 
There are numerous benefits associated with using paid ads to boost your search engine results. Exposure and brand awareness can help small and large businesses to reach their goals for consumer satisfaction and profit. 
Pay Per Click advertising tips & tactics
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