Pay-Per-Click Advertising: What Is PPC & How Does It Work?

If you have ever noticed the advertisements that appear alongside search results on Google and other search engines, you are already familiar with pay-per-click, or PPC advertising.
This article will introduce you to everything you need to know about paid search marketing: keywords, ads, budgets and bids, ad rank, targeting, and conversions.

 

What Is PPC?

 

PPC or pay-per-click is an internet marketing model also referred to as CPC (cost-per-click) where advertisers bid to have their ads shown on search engine results and websites to promote an offer.
There are different types of PPC ads, but one of the most common types is the paid search ad. These ads appear when people search for things online using a search engine like Google. Especially when looking for a product: it could be anything from a mobile search (someone looking for “pizza near me” on their phone) to a local service search (someone looking for a dentist or a plumber in their area) to someone shopping for a gift (“Mother’s Day flowers”) or a high-end item like enterprise software. All of these searches trigger pay-per-click ads.

 

 

How Paid Search Works

 

Advertisers cannot simply pay more to ensure that their ads appear more than their competitor’s ads. Instead, ads are subject to what is known as the Ad Auction, which is an entirely automated process that Google and other search engines use to determine the relevance and validity of advertisements that appear on their Search Engine Results Pages (SERPs).
Auctions begin when someone searches for something on a search engine; if there are advertisers interested in displaying ads in the results of a search page, Auctions start and advertisers bid on the terms they want to “trigger,” or show in their ads. These terms are known as keywords.
Advertising inventory is sold in a private automated auction using real-time data. And to get involved in this ad auctions, we use accounts on platforms like Google Ads to set up our ads and control when and where we would like these ads to appear.

We begin structuring the accounts by choosing keyword themes and creating individual campaigns. Within this campaign are themed subcategories, called ad groups which contain themed keyword variations.

 

Keywords

 

Selecting high-quality keywords (words or phrases) helps the advertisers to connect to users’ search queries.

  • Queries: real-world terms that people use to find result pages through paid and organic search.
  • Keywords: it’s what advertisers use to target these users by matching their search queries.

A search query as the real-world application of a keyword, it may be misspelled, out of order or have other words tacked on to it, or conversely, it might be identical to the keyword. These forms are the potential search queries,
by looking at this search queries we can find new keywords to target in our search marketing campaigns
Along with the positive terms, negative keywords can be added to help remove unqualified traffic. For example, “bargain” or “cheap” related terms may make good negative keywords for a company selling high-end products
As a result, the advertiser’s ad will not show when a query containing these terms is typed.

 

Ads

 

Once ad groups are created and the keywords are chosen, ads can be written. Ads should include the targeted keyword theme, and value propositions, and a call to action.
Creating an ad consists of adding a:

  • Headline
  •  URL
  •  Description

It’s important to run tests on your ads so you can find the message that will relate most to your audience, and can drive clicks and conversions.
Services like Google Ads and Bing Ads offer features called Ad extensions that boost ads performance:

  •  Sitelink Extensions: to promote additional links to your website page within a singular ad.
  •  Call Extensions: add a phone number to the ad to make it easy for customers to call you directly from your ad
  •  Callout Extensions: additional snippets of text that form an extra line of copy (but are not clickable).
  •  Location extensions: to offer physical business information

 

Budgets and Bids

 

Budgets and bids both directly affect how much you’re spending and what you’re spending it on. Your budget dictates how much you spend on a campaign overall. While Bidding sets a limit on how much you’re willing to spend on a single click on your ads, or other designated action like views or conversions.

All ad groups must have bids, but keyword-level bids override ad group level bids.

Typically, daily budgets are set up for each campaign, but because of the Real-Time Bidding System (RTB), charges can change depending on the competitor activity and ad rank.
So bidding higher isn’t enough to win the auction?

 

Ad Rank

 

The exposure of an ad depends on its position, which depends on the position of each keyword included in the ad, which is determined by your bid for that keyword or ad group multiplied by the matched keyword’s Quality Score.
A quality score is a metric that determines an ad relevance based on:

  • Historical click-through rate (CTR)
  •  The relevance of the keywords of the ad
  •  The relevance of the keyword and ad to the search query
  •  Landing pages’ quality

The more relevant your keywords, ad text, and landing pages are, the higher your Quality Score, and the higher your ad ranking.

To determine an ad rank, Search engines consider many factors:

  • Bid amount
  •  Ad relevance and quality
  •  The context of the search (device, time …)
  •  Format impact (does it include extensions or not?)

On top of that, a quality website must provide relevant content with a responsive design and fast delivery.

 

Targeting

 

Higher ad ranking typically results in a greater display for your products or services, that’s why it is crucial to use relevant keywords to your product and audience.
To achieve a top listing in Search Engines, advertisers use multiple targeting alternatives, including:

  • Location
  •  Day and time
  •  Device
  •  Demographics

Therefore, we can target users who are on mobile in the morning or users who are above 20 within a certain radius of a particular location.
Using different targeting options allows us to target different groups of customers and adjust messages to create various impacts, we can also target or exclude past visitors to a website who do follow-up searches.
Bids adjustments allow you to manage budgets and optimize PPC campaigns based on your targeting objectives. But proper keyword research is vital to determine which keywords your business should be targeting.

 

 

Conversions

 

A conversion occurs when a visitor to your website completes a desired goal, such as filling out a form or making a purchase. The percentage of total visitors that convert is called your conversion rate. Depending on your site’s or business’s goals, conversion types might include:

  •  Online sales
  •  Leads
  •  Newsletters signups
  •  Form completions
  •  Interaction

But how to monitor these conversions?
Conversion tracking is a way to determine the effectiveness of an advertising campaign, design change, and other marketing components as consumers move toward conversion.
You can use Google Analytics tools to have greater insight into how to allocate marketing budgets and resources.

 

Refine marketing campaign

 

After analyzing conversion data, improve your marketing campaigns to optimize elements that influence conversions, such as content, page designs and more.

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