Pay-per-click Advertising: A Detailed Overview

What Is PPC & How Paid Search Marketing Works

Marketing is the art of enhancing the popularity of products or services, which boosts revenues and results in organizational success. It involves employing multiple promotional techniques to improve awareness about the products or services and create a need for them. PPC or Pay per click advertising has long been used in digital marketing, however, there are still many organizations that are unaware of its usefulness.

Pay Per Click Advertising

Source: searchengineland.com

So let’s get started with the basics.

What Is PPC Advertising?

Pay-per-click (PPC) is an advertising model which lets advertisers place ads on promotional platforms when their ad is clicked. The objective of the PPC advertisement is to lead the user that clicks it to the advertiser’s website, page, or app, where the user can complete an action such as registering themselves, buying a product, or subscribing to a service.

To understand what is pay per click is, we must understand the role that search engines play in paid promotions.

we must understand the role that search engines play in paid promotions. Search engines are popular host platforms that allow advertisers to showcase ads relevant to what users are looking for. Promotional services like Google Ads and Microsoft Ads operate primarily with real-time bidding, where promotional inventory is sold via private automated auctions using real-time data.

How does Paid Search work?

Each time there is an advertisement on a search engine results page (SERP), an auction for the keyword instantaneously takes place. A number of factors, including the ad quality and bid amount, factor in the decision to choose the winner, whose PPC advertising appears at the top position in results.

Advertisers interested in showing their ads related to a user’s search query participate in auctions based on search keywords. Advertisers bid on such auctions, and the ads that win are featured on the search engine results page.


Advertising Components
Source: indiamart.com

In order to get involved in pay per click advertising auctions, advertisers create accounts on platforms such as Google Ads, Microsoft Ads, etc. for setting up their ads and choosing when and where they want their ads to appear. These accounts can be further split into campaigns for better management and reporting according to various geographies, product lines, demographics, etc.

A PPC campaign can further be divided into advertisement groups that contain keywords and relevant ads. Keywords are intrinsic to PPC advertising since they connect advertisers to the search queries of users. Queries are the actual words or phrases being typed by users in the search boxes of search engines like Google to find suitable results. On the other hand, keywords are what marketers use to advertise these users by matching their searches.

Keywords work as general abstractions for a range of search queries and are prone to irregularities such as misspellings. Depending upon the keyword match types used, advertisers can match user search queries with somewhat precision. For instance,  an advertiser can choose to match keywords with search inquiries exactly or decide to allow for variations in spellings, order or words, or the inclusion of synonymous words

Keywords can also be negative in nature. They are used to prevent advertisements from being triggered through search queries containing those keywords. They are used by companies to avoid irrelevant traffic that increases a website’s bounce rate statistics.

Ads are an essential component of pay per click advertising. An advertiser also needs to create ads for each of their campaigns. Such ads are nestled together within groups targeting shared keyword sets and are mostly organized by common themes.

Since ads are what users will be able to see if the auction is won, advertisers ensure to get them right. The whole purpose of PPC is to take users to a certain page to see an advertisement that will influence them to purchase a product or service. Typically, they contain a headline, a few description lines, and a URL.

When ads arise on a SERP, they are displayed on top of the results or at the very bottom of the results page. PPC advertising service providers like Microsoft Ads and Google Ads also provide features known as ad extensions to further enhance the look and feel of ads. For instance, many ads nowadays have siteline extensions that populate an ad with additional links to multiple pages on a website.

Modern extensions can also include calling links, which add a phone number to the advertisement during a company’s business hours. Ad extensions play a vital role in increasing the visibility of ads and making them more engaging to users while providing more information about a business.

Budgets & Bids

To participate in a PPC auction, advertisers have to decide how much they are willing to pay for a given keyword. This is done either by using bids at the keyword or ad group level, or by using campaigns at the budget level. Although budgets are set on the campaign level and could get exceeded daily, budgets are not overspent monthly.

Budgets are typically set according to the account strategy, whereas bids are a more accurate way of controlling ad expenditures. The general rule is that all ad groups must have bids but keyword-level bids will override ad group-level bids.

Many advertisers today employ automatic bidding strategies for PPC advertising. These strategies allow advertisers to set a specific goal for each campaign type and have advertising platforms determining the aptest bid for each of the auctions.

Bidding strategies for pay per click advertising can be applied to individual campaigns or a group of campaigns. The actual amount that is paid by the advertiser depends on ad rank and competitor activity, and not only on the maximum bid placed.

Ad Rank

Winning an auction for PPC advertising depends on several factors apart from the highest bid being placed. All search engines look for factors to ascertain which advertisements should be at the top of the SERP. Since it is a highly-valuable spot, each search engine has its own parameters to determine the ranking of an ad.

For instance, Google considers the following while determining the rank of an ad:

  • Ad quality & relevance
  • Bid amount
  • Context of the search
  • Format impact (whether an ad includes extensions to enhance its format)

The relevance of an ad is determined by its ‘Quality Score’. The Quality Score of an ad is decided by the following factors:

  • Landing page quality
  • Relevance of the keyword to the ad
  • Relevance of the keyword and the ad to the search query 
  • Historic click-through rate (CTR)

The image below shows the factors that determine the Quality score for Google Ads.

Ad RankSource: digitallogic.co

The relevance of an ad correlates directly to its quality score. All search engines penalize advertisers that bid on keywords having poor Quality Scores. Such advertisers rarely get their PPC ads shown, even if they make high bids. This makes it extremely essential to have a relevant and engaging pay per click advertising copy that includes high-volume keywords.

Landing page quality is another important factor that mustn’t be overlooked. All search engines value landing pages that offer a premium user experience along with relevant information. Thus, if the quality of your landing page is poor, ads are far likely to be displayed for your landing page. Page load speed, relevance to the user, and overall visit experience also affect the number of PPC ads you receive.

Targeting with PPC Advertising

PPC advertisers show their ads to relevant audiences by selecting the right set of keywords. However, besides keyword-based targeting, there are many other targeting alternatives present in PPC advertising, including:

  • Location-based Targeting
  • Device-based Targeting
  • Day & time Targeting
  • Demographic Targeting
  • +Many more.

The above techniques allow advertisers to target specific types of users within a given location, for a set period of time. This optimizes their advertisements significantly and produces much better results. 

Types of PPC targetingSource: dswshop.com

Advertisers understand that different versions of an advertisement copy can perform differently for different user types. Therefore, targeted PPC advertising yields much faster results through more specific targeting and messaging. Apart from using remarketing tools that allow for more precise advertisement copy messaging and budget adjustments, PPC campaign management can also target/exclude past website visitors who make follow-up searches.

Bids in pay per click advertising can automatically be adjusted for keywords based on the targeting options available. This gives advertisers more control over the expenditure and traffic by digging into when prospects/customers become more valuable to a business.

Conversions

The whole point of the above exercises is not just to get clicks, but to acquire conversions. The purpose of advertisers bidding for ad spaces, running ads, and linking them to keywords is to make them perform at least one of the actions below on you click on an ad:

  • Purchasing a product
  • Subscribing to a service
  • Signing up for a newsletter
  • Requesting for a demo
  • Placing a phone call 
  • Scheduling an appointment

The performance of a PPC campaign can be tracked through the conversions it makes and the number of conversions that can be attributed to paid searches rather than other promotional channels. Analytics services like Google Analytics can help you decide how credits are assigned conversion paths for each type of conversion.

PPC advertising platforms such as Google Ads help track conversions using a code snippet placed into the source code of the ‘Congratulations’/’Thank You’ page which is reached after conversion. This helps in tracking the source of the conversion and helps you understand how good/bad the ad is.

Tracking conversions can be a tricky task since conversion paths tend to be more complicated as compared to a single click on an ad leading to a direct purchase. There are various types of conversions that include multiple website visits and searches. It can also happen that your PPC advertisement leads to a phone call, email, or an in-store visit, which is difficult to factor in and ascertain.

Benefits of PPC Advertising

PPC advertising can have a major impact on brand awareness and help businesses in achieving accelerated growth. Pay per click advertising offers brands a quick and impactful entry into highly competitive markets and helps achieve promising results with relatively low investments.

Benefits of PPC

Source: ibasesolutions.in

Effective PPC campaign management yields positive results which are easy to track and measure. It also offers a cornucopia of useful data, runs well with other marketing channels, and improves both revenue and traffic. Let us look at the advantages of PPC advertising in a bit more detail.

1. PPC is measurable & traceable

One of the biggest benefits of pay per click advertising run through Google Ads is that its results are easy to measure. By using Google Analytics with Goods Ads tool you can view key performance details such as impressions, clicks, and conversions based on the business goals defined.

Your PPC campaign’s performance does not have any mystery to it and all statistics are available readily to show how each ad and campaign has performed. This transparency helps you understand the kind of traffic and conversions you are getting for the amount paid, which helps you in making effective business choices.

When your PPC traffic reaches your landing pages and converts into a customer/client, Google Analytics can easily track it, allowing you to realize the kind of traffic you can receive for a given budget. This isn’t possible with any other media channel.

PPC advertising yields even more promising results than SEO. Using call tracking, advertisers can isolate their PPC efforts, surpassing marketing methods like call and print advertising.

2. Rapid Penetration

Even if you are decades behind the competition, PPC advertising allows you to get into the thick of things quickly. With a little optimization, it allows you to get your campaigns running quickly and be on par with competitors faster. In contrast to initiating SEO efforts, which require much time and attention for the same positioning, PPC ads offer identical traffic within minutes of the campaign launch.

Organic social media and email marketing do not provide much scope to target people aren’t already aware of your brand. Typically, you can target only a handful of individuals who like and subscribe to your social channels/mailing list. Pay per click advertising allows you to cast a much wider net to discover new prospects and reach out to your target audiences faster.

While using other advertising media, one has to invest significantly in developing a team, brainstorming ideas, creating branding materials, and publishing them. However, PPC advertising allows you to get up and running rapidly through minimum involvement with marketing teams.

3. Better Control

PPC campaigns offer greater control over a wide range of parameters, which allow you to reach your potential customers faster. You can choose between time slots, geographies, and specific dates when you want your ads to be shown.

Modern pay per click campaign management tools help you easily figure out the keywords and placements you wish to target and how specific/restrictive you want to be. Such campaigns also offer a lot of flexibility in budgets, in case you want to start small.

PPC advertising helps you to select your own budget and bids, while also allowing you to choose what you wish to spend on. If your campaign picks up well, you can instantly scale up; and if it doesn’t, you can take a break at any moment. Such flexibility is hard to find in other ongoing advertising campaigns.

In the case of pay per click advertising, the algorithm and auction of Google Ads have the final say about where your ads would be positioned and how much you need to spend. Thus, the correlation and alignment between your landing pages, keywords, and ad copies ascertain the fate of the campaigns.

One of the advantages of a PPC setup is that you can make quick modifications in ads and see what works better each day. There isn’t a long cycle between editing and deployment, as seen with other mediums. Moreover, if a campaign is not working well, you can pull it down immediately without having to run it for the entire contracted cycle.

4. PPC Aligns With Business Goals

PPC allows you to achieve a vast set of marketing and business objectives, ranging from high-level brand exposure to an eCommerce sale or a hot lead submission. Nearly all types of commercial goals can be tracked through PPC advertising, as it aligns web traffic drivers to specific goals.

Typically, advertisers have to work hard to make people do things (like signing up for newsletters, entering contests, downloading apps) — all for advertising and marketing products or services. Pay per click advertising takes a more direct route, targeting intended audiences only.

Conclusion

PPC is a unique, advanced, and powerful tool that has proved to be a credible and profitable advertising channel for thousands of organizations worldwide. Whether it is B2B, B2C, non-profits, or any other type of organization seeing instant and quality traffic with quick conversions.

If you have been using traditional advertising channels till now, PPC advertising can help you break away and take your place among the best rapidly. Not only does it save your time, but you also get great returns on your investments and better conversions with less effort involved.

There is very little that can go wrong with PPC campaigns, and even if things don’t fall into place initially, you can quickly adjust your strategy to gain better traction. PPC also makes you much more aware of your customers’ tastes and preferences, enabling you to modify your approach when needed.

The insights offered by PPC marketing campaigns can help you create strategies for years to come, and may even assist your marketing teams in the future. You also get far better control over the results and keep improving your strategies for better results.

The newest addition to SoftwareSuggest's writing armada, Joydeep Das has extensive experience with both technical and non-technical content. However, marketing and promotional topics have remained his true love since over a decade.

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