What Is PPC (Pay Per Click) & How Does It Work?

Pay Per Click is an advertising model that allows advertisers to pay only when people actually click on their ads. It’s a very popular, yet controversial marketing technique because it can lead to higher costs for businesses and lower revenue for publishers.

“Pay-per-click advertising examples” is a term that refers to the process of advertising on search engines, social networks, and other websites. It’s a type of online marketing that can be used to drive traffic to your website or app. Read more in detail here: pay-per-click advertising examples.

PPC is a kind of digital marketing that allows firms to leverage search engines to increase traffic and conversions. 

Maybe you’re trying to figure out how to get your first customers and sales for a new company, or you’re thinking about how to expand your brand’s online presence. 

PPC may be a terrific method to advertise your company and attract new clients, but it can be a bit complicated for those who are new to the channel. 

We will discuss various platforms and how they function in this tutorial to help you understand what PPC is, how it works, and how you can utilize it to create success for your company.

What exactly is PPC?

PPC, or pay-per-click, is an online advertising technique in which marketers place advertisements on platforms like AdWords by Google and are charged a fee each time someone clicks on them.

When you do a search on Google (or Bing), you will see advertisements at the top of the results page.

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Do you see the product grid on the right? They are also advertisements that appear when a search is conducted with a commercial aim. 

PPC is used by businesses to increase traffic, sales, and enquiries from their target demographic. Common PPC solutions provide a great deal of targeting flexibility, allowing you to show advertisements just to those who suit your target demographic.

People use search engines to find providers of both goods and services, and when there is an active audience seeking for what your company has to offer, there is a chance to make a sale.

PPC can let you reach out to these folks with a degree of precision that conventional advertising can’t match.

Want to find someone in San Francisco who is interested in purchasing a used Ford Mustang? It’s simple to accomplish. 

PPC allows you to contact your audience at a time when they are seeking for a company like yours while also providing statistical insights to assist you enhance the channel’s performance over time.

Paid advertising is enormous business, with Alphabet (Google) earning more than $162 billion per year from its ad networks alone.

What Is Pay-Per-Click Advertising and How Does It Work?

PPC is a marketing channel that encompasses a variety of ad platforms, the most popular of which being AdWords by Google and Bing Ads. 

There are several ad types inside each of these platforms, including:

  • Advertisements on the Internet
  • Advertisements for Shopping
  • Advertisements that appear on the screen
  • Advertisements in Video
  • Ads in Gmail

Most companies begin their PPC marketing with AdWords by Google, simply because it provides access to the greatest audience of prospective clients and consumers, as well as a variety of various methods to set up and manage campaigns based on your objectives.

However, regardless of the platform or ad type, the basic principles of PPC stay the same, and it is a rather straightforward process:

  1. Create an account with the platform to use for advertising.
  2. Create advertising (and fine-tune your targeting by include keywords or audiences, for example).
  3. Set the maximum fee per click that you’re prepared to spend.
  4. Your ad gets entered into a bidding war with other advertisers for the same keywords.
  5. The sequence in which the adverts are shown is determined by the bidding.
  6. When someone clicks on your ad, you pay.

It’s simple and clear, and although there are some variances between various ad formats (and alternative bidding tactics that may be employed, for example), the basic concepts stay the same.

But first, let’s take a look at how the auction works, since this is generally the most perplexing aspect of PPC for newcomers.

What are PPC ad auctions and how do they work?

When a user does a search, an ad auction occurs, which determines criteria such as:

  • The ability of an ad account to participate in the auction.
  • In the ad space on the results pages, the order in which qualifying advertising will display in the ad space.
  • How much will each of the sponsors whose advertisements are shown pay each click?

The maximum CPC (cost-per-click) that an advertiser sets in their ad account for a given keyword or ad group — this is the highest that they are prepared to pay for each click — is the first influencer on the auction.

However, this does not always imply that this is the utmost amount they will pay.

The Quality Score (QS) is another thing to consider. It is a measure that takes into account a variety of criteria such as an ad’s predicted CTR (click-through rate), relevance to the query being searched for, and the experience of the landing page to which the ad will direct people.

Soon, we’ll go further into Quality Score.

The Ad Rank determines the position of an ad on the results page, which may be summarized as follows:

Quality Score x Maximum CPC = Ad Rank

The real Google method is a bit more complicated, but this is a great approach to get a broad concept of it.

What factors influence the cost of a click for an advertiser?

CPC is influenced by several factors, including Ad Rank, but it isn’t the only one. We may comprehend the fee that an advertiser pays to appear in their position if we consider the following:

Cost Per Click = Advertiser’s Ad Rank / Quality Score + Cost Per Click = Ad Rank of the advertiser below / Quality Score + $0.01.01.

Why Should You Use PPC?

If you’re thinking about using PPC as a marketing channel for your company, you’ll want to know the advantages and why you should spend your money here rather than elsewhere.

Here are some of the most popular reasons why Pay-Per-Click (PPC) may be the best advertising channel for you:

You may begin getting clicks right now.

After you’ve set up your ad account and generated an ad, you’ll need to wait for the platform to approve it, which should just take a few hours.

Once your advertising are online, as long as you are qualified to participate in the auction and your offer is high enough, you may begin appearing (and collecting clicks) pretty fast.

When compared to other marketing channels, such as SEO, PPC enables you to see results immediately, which is one of the reasons it is so popular with marketers.

PPC is simple to monitor and quantify.

The ability to quickly assess and track the platform’s results is one of PPC’s primary advantages over conventional advertising channels.

Conversions, including order or lead values, may be tracked in all prominent platforms, such as AdWords by Google and Bing Ads. They also allow you to monitor the ROI of not just the total account but also particular ad groups and keywords at a detailed level.

This means you may utilize data and insights to improve the efficiency and efficacy of a campaign over time, hence increasing the channel’s ROI.

You have complete control over when and how much your adverts run.

Do you need to put a temporary halt to your advertising during a busy period? Do you want to run advertising just when you need new leads? 

PPC is an ideal way to do this because you have complete control over when your ads run (including the time of day and day of the week) and can easily turn them on and off as needed; however, a high-performing campaign should always be used to drive overall business growth rather than as a stop-start tactic.

In contrast to other channels that don’t allow you this degree of flexibility in managing a channel’s cost and budget, you also have complete control over how much you spend each day (or month) and how much you pay each click.

You can precisely target your consumers.

Unlike conventional advertising, PPC enables you to target your specific consumer based on your data, even adjusting bids depending on devices, time of day, and region.

You may use these data to cut wasted advertising expenditure if you know your consumer and how they search.

There are a variety of ad formats to choose from.

Run an ecommerce store? You can use Advertisements for Shopping to display your products right on the SERPs in prime position.

Do you want to convert basket abandoners into sales? To urge a desired activity, use display remarketing to provide an offer.

PPC comprises a wide number of ad styles, all of which may be utilized to achieve success for various organizations and circumstances. 

SEO vs. PPC

Businesses often view SEO and PPC to be two comparable avenues for driving visitors from search engines.

And, although they both require showing on search engines and receiving clicks from them, they are two quite distinct routes.

  • Pay-per-click (PPC) is a kind of advertising in which you pay for each
  • Clicks on SEO (organic search) are completely free. 
  • PPC allows you to instantly start driving traffic from the search engines, but organic ranking takes time.

But the two networks aren’t truly rivals. They’re both part of a larger digital marketing mix, and they may and should complement each other to achieve online success.

Try to avoid comparing these two channels whenever feasible, and instead regard them as complementary components of promoting digital development.

The Most Popular PPC Platforms

When it comes to PPC, this typically entails using one (or both) of the two major platforms: AdWords by Google and Bing Ads. 

Let’s take a look at these and other ad platforms to see whether they’re right for you. 

AdWords by Google

AdWords by Google (formerly known as Google AdWords) is the ad platform that allows you to run search and Advertisements for Shopping on Google, Advertisements in Video on YouTube, Ads in Gmail, and Advertisements that appear on the screen on the Google Display Network (GDN).

It is by far the most popular PPC platform, and it provides a multitude of options for almost any organization to benefit from it.

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Advertisement by Microsoft (Bing Ads)

Bing Ads, also known as Microsoft Advertising, in a similar way to AdWords by Google, lets you run ads on Bing, as well as on Yahoo and AOL.

The two platforms are relatively similar in terms of administration; the key difference is the market size and potential reach. 

Google’s market share in the United States is expected to be 87.71 percent in June 2020, with Bing at 6.99 percent and Yahoo at 3.44 percent. 

That said, Bing Ads can still drive traffic and conversions, and the ROI is often cited as being better than AdWords by Google, albeit at a lower volume.

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Other Advertising Networks

AdWords by Google and Bing Ads aren’t the only ad networks that you might consider to drive growth with PPC; others include:

  • Bidvertiser
  • RevContent
  • AdRoll
  • Advertisements on Facebook
  • BuySellAds
  • Advertise.com
  • AdBlade
  • Ads on LinkedIn
  • Advertisements on Twitter
  • Advertisements on Amazon
  • AdRecover

For the most part, we will mainly be covering AdWords by Google and Bing Ads. If you are looking to expand on these popular platforms, the options listed above are worth looking into (social ads are often seen within their own channel, separate to search engine PPC). 

Check out the video below from our Weekly Wisdom with Joel Bondorowsky if you want to learn more about picking the correct PPC channel.

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Search Ad Campaigns: The Fundamentals

The most common ad types used by most firms are search and shopping campaigns.

Let’s take a look at Search Ad Campaigns: The Fundamentals, helping you understand what the different components mean when using this type of PPC ad for the first time. 

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Ad Groups and Campaigns

The main structure of Advertisements on the Internet sees an account split up into ‘campaigns’ and ‘ad groups.’

You must understand both of these principles since they are the basis of your account; they are both quite easy and clear.

Campaigns

You will normally just have a few campaigns in your account unless you are setting up a huge account. A campaign is made up of many ad groups, each of which comprises advertisements and keywords.

Campaigns should, in most cases, be based on how you wish to distribute funds or establish targets. 

Consider the following scenario: you own a car dealership. You may want to create distinct campaigns for ‘used vehicles’ and ‘new automobiles’ so that finances, targeting, and other modifications can be kept separate. 

Ad Groups

Ad groups are sub-campaigns that include both advertising and keywords.

Ad groups may be thought of as subsets of advertising that are activated by keywords.

“An ad group comprises one or more advertisements that have comparable goals,” according to Google. You establish a bid, or price, to be utilized when the keywords in an ad group cause an ad to appear.”

The amount of ad groups in a campaign is mostly determined by your company and the number of keyword groups on which you’ll be advertising. 

Within an ad group, you may use numerous keywords (and match kinds). To give themselves the most control over targeting and bidding, some PPC experts choose to employ a structure known as SKAGs (single keyword ad groups), which comprises just one term per ad group.

Keywords

Keywords are what cause a Google ad to appear.

When a user does a search for a query, the keywords in an ad account are compared to the query in order to display advertising.

Different match types may be used for keywords, and they determine whether or not variants of a keyword cause an ad to appear.

Each term in an ad group may have its own maximum CPC bid.

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Types of Keyword Matches

You may choose which search phrases activate your adverts and how broad the variations are by using match types.

The Types of Keyword Matches you can use are:

  • Broad Match: Ads may be shown for searches that include misspellings, synonyms, related queries, and other variants. When you search for ‘women’s dress,’ you’ll see ads for ‘ladies dress.’ This provides you the least amount of control over the keywords that cause an ad to appear.
  • +Broad +Match +Modifier: Similar to broad match, but only for search terms that include the words preceded by a + sign.
  • “Phrase Match”: Ads for keywords that contain extra words before or after the keyword will be shown.
  • [Precise Match]: This will only appear if the keyword is exact or extremely near to it. This provides you the most precise control over the phrases that cause an ad to appear.

1636528306_589_What-Is-PPC-Pay-Per-Click-amp-How-Does-ItGoogle is the source of this information.

Keywords with negative connotations

Quite simply, Keywords with negative connotations allow you to prevent an ad from showing for searches that include that term.

When paired with information from the search terms report, this gives you a lot of power, allowing you to prevent your advertisements from showing up for keywords that are similar but aren’t relevant or won’t convert. 

Using Keywords with negative connotations is an effective way to prevent wasted budget and traffic that isn’t deemed to be relevant.

Ads

When you win a bid auction, ads appear on the search engine results page, and they entice users to click.

Within an ad group, you may have many advertisements and specify how they are cycled. Make sure to develop interesting commercials that properly explain your message and unique selling proposition.

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Writing appealing ad content requires talent and thought about your sales message, and we strongly suggest that you check out Joel Bondorowsky’s Weekly Wisdom on the philosophy behind good PPC ad and sales text.

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You can use our Ad Builder tool to create and build out your PPC campaign, using your competitor’s ads as a template and customize to your own business and export these so you can import to AdWords by Google.

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Experiment with the Ad Builder

You need a time saver!

ADS illustration

Adjustments to Bids

For various devices, times of day, or specialized audiences, you may raise or lower the maximum CPC for a campaign.

You may change bids in this manner depending on the possibility of a user converting, as well as other criteria.

Let’s imagine your conversion rate on mobile devices is lower. To compensate for the decreased conversion rate, you might apply a negative bid adjustment to lower the maximum CPC you’re ready to pay for clicks from mobile devices. 

Targeting by Location

If you are a local business and only serve customers in a specific geographical area, you can use Targeting by Location to control who sees your ad.

You can target multiple locations (with different Adjustments to Bids) within an ad group, either by choosing a city or region or setting a radius target.

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We hope you’ll like Daria Voronina’s guide on geo-targeting and local PPC tips to learn more about how to use this option successfully. 

Schedule of Ads

Is your statistics indicating that visitors to your website are more likely to convert at various times of the day?

Ad scheduling allows you to adjust bids (or stop bidding all together) based on the time of the day and create a custom Schedule of Ads to not waste money on clicks that aren’t converting.

Many advertisers, for example, switch off advertisements overnight.

Budget for the Campaign

You may determine the daily budget for your campaign depending on how much you wish to spend.

One thing to be aware of here is the fact that AdWords by Google can, and will, overspend by up to two times your daily budget, but never by more than you spend in a month.

“Up to 2 times your campaign’s average daily budget may be utilized to display your advertisements on certain days of the week or periods of the month depending on traffic swings — but not more than you spend on your campaigns each month,” Google says. If your normal daily budget is $10, you may spend up to $20 to display your advertising on certain days depending on traffic swings.”

Extensions for Ads

Extensions for Ads let you add more information to your ads and occupy more screen real estate. They allow you to enhance a standard search ad to encourage a user to click and stand out and help showcase that your result is the most relevant to a query.

An ad extension click is the same price as a click on the main ad.

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You may have noticed that some ads on the SERPs are enhanced with site links, callout text, phone numbers, and reviews — these are all Extensions for Ads. 

If you run an ecommerce store, the most effective PPC ad format is likely going to be Advertisements for Shopping, as these allow you to serve your products straight onto the SERPs with both images and prices clearly displayed.

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While the main principles of how Advertisements for Shopping work are the same as with Advertisements on the Internet, there are a few subtle differences that you need to know about. The main one being that you cannot specify your own keywords for this type of campaign (but you can control visibility with Keywords with negative connotations). 

Advertisements for Shopping are triggered by terms relating to your product name, description, and landing page copy.

Google Merchant Center is a service provided by Google.

To run Google Advertisements for Shopping (as well as take advantage of free product listings), you need to set up a Merchant Center account to get your products into Google. 

To launch a shopping campaign, you’ll need to manually add goods or use a product feed from your website (which is suggested).

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Feeds for Products

While a product feed isn’t the only method to get data into Merchant Center, it’s the most popular. It contains information about each item, such as the product name, description, picture, price, unique identifiers, product category, and more.

You may be able to export a product feed pretty easy depending on the ecommerce platform you use, or you may need to work with your developer, but be sure to follow the needed standard.

Dive Deeper into Advertisements for Shopping

Including shopping campaigns in your ecommerce store’s PPC campaign may result in some really appealing returns, but to get the most out of it, you’ll need to get to know the platform and understand how to optimize feeds and manage these campaigns.

We suggest checking out this presentation from our ‘Drive Profitable Growth at Scale with Google Shopping Campaigns’ webinar, which delves further into running effective campaigns.

Other Bidding Techniques to Consider

While PPC used to entail paying per click on ad networks, platforms have evolved and now provide a variety of bidding options.

You are no longer limited to a pay-per-click model; depending on the ad type and your objectives, you may be able to use methods such as:

  • Cost per action (CPA) goal (CPA)
  • Return on ad spend (ROAS) goals (ROAS)
  • Conversions should be maximized.
  • Conversion Value Maximization
  • Cost per click has been improved (ECPC)
  • Increase the number of clicks

Rather of establishing a maximum CPC, you may have Google automatically set bids for you and pay depending on an action, a target ROAS, or a focus on obtaining the most hits or conversions for your budget using these additional bidding tactics.

For PPC campaigns, keyword research and competitor analysis are essential.

Successful PPC campaigns aren’t created on a whim, and the key to getting a good return on investment from the channel is to spend time learning about the following:

  • What keywords should you bid on, and how much will it cost you?
  • What platforms are your rivals advertising on, and what message are they using?

With the Webinomy Keyword Magic tool, you can locate the perfect keywords to employ in your campaign, as well as all of the keywords you’ll need to develop a lucrative campaign.

Simply type in a beginning term, and you’ll be presented with a slew of campaign options.

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With the Webinomy advertising research tool, you can track and evaluate what your rivals are doing, dissect their approach, and figure out how much they are spending on PPC and how much traffic they are receiving, among other things.

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When implementing your own sponsored search campaign for the first time, this may be quite beneficial, as it allows you to compare your own performance to that of your nearest rivals.

Examining other firms’ commercials, as well as seeing their ad history and how their approach has evolved over time, may help you develop exceptional text that sticks out and distinguishes from everyone else.

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Also, if you’re a local firm that only advertises in a small geographic region, the CPC Map might provide you with some valuable information.

Choose your state to see how the average CPC stacks up against the rest of the nation, as well as benchmark CPC prices for a variety of sectors.

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This information is quite valuable.

Where Can You Learn More About PPC and Campaign Optimization?

Understanding all elements of PPC and learning how to develop and optimize a lucrative campaign takes time, but there are lots of useful manuals and tools available to assist you.

Here are some of our favorite tutorials and resources for improving your pay-per-click marketing skills:


For your company, PPC can and should be a successful marketing channel. It comes with a slew of advantages that other platforms lack, and it’s pretty simple to get started on the most prominent platforms. 

Take the time to learn how to properly start and optimize a campaign, as well as how to create objectives and track your results, and you’ll have more visitors and conversions in no time.

Experiment with the Ad Builder

You need a time saver!

ADS illustration

PPC is a type of advertising that allows advertisers to pay per click. This means that the advertiser pays only when someone clicks on their ad, not every time they see it. The “ppc example” gives an overview of how PPC works, and what kind of results you can expect from it.

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