A pay-per-click campaign (PPC) is a form of digital advertising where advertisers run ads on search engine result pages (SERP) and you pay a fee each time someone clicks on your ad. The fee you pay depends on whether people click on your ad and the SERP displays your ads to direct visitors to your website or landing page.
PPC is used to drive traffic and conversions from search engines and is an effective way to grow your brand’s presence online and increase traffic and sales from your website. It’s also a great way to connect with new customers looking for services or products you offer.
PPC advertising is most common on search engine result pages like Google or Bing, but it is also used on social media sites such as Facebook and Instagram (however CPM is more commonly used here).
Today we want to focus on the purpose of PPC campaigns, how they work and the key benefits of running them…
Why run PPC ads?
Businesses across all industries use PPC to drive traffic and sales from their target audience. PPC makes it easy to target and serve ads directly to those that fit your customer demographic. Because search engines are the number one way people look for products and services, running pay-per-click campaigns is an easy way to direct prospects to your website and to close a sale. It targets demographics traditional advertising doesn’t.
How does it work?
PPC campaigns run on different platforms with the most common being Google Ads and Bing Ads. Within the platforms there are different ad formats such as search ads, display ads, Gmail ads, video ads and shopping ads.
It’s common for many businesses to start PPC campaigns on Google because it offers the largest audience and a variety of different ways to set up and run campaigns. However, no matter which platform you choose to use, the process is similar for each of them and usually includes the following…
- Sign up for an account.
- Create ads and select your target audience, keywords, etc.
- Set up your maximum cost you want to pay per click.
- Your ad will then be entered into the auction with other advertisers bidding on the same keywords, which determines the order the ads are displayed in.
- You pay only when someone clicks your ad.
Sometimes the most confusing part is understanding how the auction works, so let’s take a closer look at that…
How the PPC auction works
The auction that occurs when a search happens on a search engine includes the following factors:
- The ad account’s eligibility
- The order the eligible ads appear on the results page
- How much the click will cost each of the advertisers whose ads show up
The first influencer in the auction is the maximum cost-per-click that an advertiser sets up for a specific key word, or the most they’re willing to pay per click.
Quality Score also influences the auction because it’s a metric that includes factors such as the expected click-through rate of an ad, how relevant the ad is to what is being searched for and the legitimacy of the landing page the ad is linked to.
The position on the results page is determined by Ad Rank which is the Quality Score x Max CPC.
So, what factors in to how much an advertiser pays for a click?
Ad Rank plays a big role, but it isn’t the only factor. The cost an advertiser pays to appear where they do can be best understood by this formula:
Cost Per Click = Ad Rank of the advertiser below / Quality Score + $0.01
Key benefits of PPC ads
There are many benefits of PPC ads. Here are a few to note…
They are cost effective. You are always in control of your budget, when your ads run and how much you pay when you run PPC ads. You can determine how much you spend per day and how much you pay per click. You’ll get your money’s worth because you only pay when visitors click on your link on the ad taking them directly to your website where there’s a high chance of conversion.
You see results fast. Organic ranking is great but can take time for you to rank high on SERPs. And if you’re a small business, you probably don’t have the time for this. With PPC ads you can launch to the top of results pages within hours or days of creating a campaign.
You can test campaigns. PPC campaigns make it easy to control, test and change keywords, ad placement and budgets. You can also run A/B split tests with different ads to see what performs best with the highest return on investment.
It’s easy to target your customers. PPC ads make it easy to target your exact audience and to adjust bids according to devices, time of day, location and other specifications. PPC ads also make it easy to create retargeting campaigns aimed towards visitors who visited your website but didn’t purchase from you.
PPC ads are easy to manage and track results. From PPC ads you can easily track conversions and see your ROI on your overall account as well as specific ad groups and keywords. Using this data, you can refine campaigns over time to increase ROI.
If you’re looking for help setting up, running and/or tracking results from PPC ad campaigns, contact us today!
We are happy to help determine what platforms and ads will best suite your digital marketing needs and goals.
Read about how our client Mountain State Waste had huge success with digital online ads on Facebook, Google and Instagram here.