What is Pay Per Click Advertising?

Image used for blog post on pay per click published by Netilly on its official blog

Pay Per Click (PPC) is a form of online marketing where advertisers are required to pay a fee only when their ad is clicked by an online user.

The intent behind PPC is to buy traffic for a site rather than earning those visits for free.

You must have noticed an ‘Ad’ icon pre-fixed to the top search results while searching in Google or Bing. Such links are search engine advertisements which happen to be one of the most successful implementations of PPC.

Pay Per Click allows marketers to bid, on a specific keyword that is related to their business offering, for ad placement in a search engine’s sponsored links.

So, when someone searches on that keyword, the search engine software will display those paid ads mostly at the top of the search engine results page (SERP).

Let’s take an example of Bajaj Allianz (an insurance company) which has bid on the keyword “Life Insurance,” their ad might rank at the top on the Google search engine result pages.

Image showing a sample of paid Google Ads in search engine results
PPC Ads pre-fixed with Ad button

Whenever a user clicks on their ad and lands on their website, Bajaj Allianz must pay a fee to the search engine.

Usually, this fee is small provided the ad is set up correctly and results in a sale.

For example, if an advertiser pays $2 per click and the click results in a $100 sale, then it’s a good deal for the advertiser.

PPC Statistics

Let us have a quick look at some latest PPC statistics:

  • 65% of all clicks on paid ads are made by users who intend to make a purchase. (Wordstream)
  • According to a survey conducted by Clutch, a research agency, 75% of respondents said that paid ads make it easier to find the information they are looking for on a search engine.
  • 49% of people click on text ads; 16% on video ads, and 31% on shopping ads (Search Engine Land)
  • PPC visitors are 50% more likely to make a purchase than organic search visitors. (Unbounce)
  • More than 40% of clicks go to the top 3 paid ads in search engine results. (Wordstream)
  • Google AdWords, Facebook, and mobile are the most popular PPC platforms, and up to 80% of the marketing budget is likely to be allocated to paid ad (search, social, display, remarketing ads) budget. (Social Media Today)

Why the shift from traditional advertising to the digital one (PPC Advertising) makes sense?

Image showing the comparison of traditional and digital advertising pictorially

With traditional offline advertising, if you have ever published an ad in a newspaper or magazine, you probably realize that it is far too complicated to measure how many people flipped to that specific page and paid attention to your ad.

Further, there is no way to ascertain if that ad was responsible for any sales at all.

But with digital or online marketing, one can expect accurate results in real-time and also measure the ROI of the marketing efforts.

There are many tools available such as Google Analytics which can record the exact number of people who have viewed your website, how many pages they visited and which location are they from, in real time.

With digital advertising techniques like Pay Per Click, the fee that advertisers pay is irrespective of how many times the ad was displayed on the search engine result page.

So, PPC is less expensive than traditional advertising where one must pay for each advertisement placed in a newspaper or telecast on television.

Paid ad clicks at least make the visitors aware of the product or service offered though they may not necessarily result in sale conversions.

In fact, PPC advertising filters irrelevant traffic and ensures that only quality traffic is attracted who are more likely to convert.

Most importantly, PPC provides options to advertisers to target a specific segment based on demographics like location, age, gender, interests, and behaviours.

In a nutshell, Pay Per Click advertising is highly targeted, cost-effective, measurable, and yields good ROI. All one needs to do is to use the right tools, the appropriate resources and have a focused approach.

PPC Advertising Platforms

Google Ads

Google Ads, formerly known as Google AdWords, is by far the most popular and successful PPC platform.

Whenever a user searches for anything, Google selects a set of bidding advertisers from a pool of users who have bid on keywords.

A combination of various factors such as relevancy and quality of keywords and ad text are considered for selecting the winning advertisers.

Once the winning advertisers are selected, then Google displays their ads on its search results page.

Google is one of the most popular search engines and gets huge traffic. Hence running a PPC Ad campaign through Google Ads is a useful way of diverting traffic on a site via clicks on the displayed ads.

Across various business domains, the average CTR (click-through-rate) is 3.17% for Google Ads search and for display, the number is lower averaging around 0.46%. Both of these averages are higher in comparison to what they were a couple of years ago.

Depending upon which keywords and match types the advertisers select, the frequency to display their ads on the search results page is decided.

Further, it also impacts the cost-effectiveness of the paid ad campaign.

For a successful Pay Per Click advertising campaign, there are several factors involved, but one can achieve a lot by focusing on the below factors:

  • Keyword research: Finding the right and relevant keywords for your specific product or service, forming a tight ad set and creating a compelling ad copy.
  • Quality Score:  Google’s rating for your keywords and landing pages depending upon how relevant they are for a paid ad campaign. One can get more ad clicks at a lesser cost when the quality score is better.
  • Optimized Landing Page: It helps to have a well-designed landing page with relevant and compelling content along with a clear call to action.

 Bing Ads

Like Google Ads, Bing Ads is a Pay Per Click platform displaying ads on the Bing and Yahoo networks. The platform utilizes search partners including Yahoo and Microsoft Sites whose searches are powered by Bing.

Bing Ads too follows a keyword-based advertising model. Bing Ads has over 137 million monthly unique desktop searchers on the Bing Network in the US alone. 

Social Media Paid Campaigns

Social media platforms such as Facebook and LinkedIn have also adopted Pay Per Click as one of their advertising models.

To run a Facebook campaign, one need to set up the below three parts:

  • Campaign Objective for each of your ad campaign
  • Creative for the ad account
  • Schedule, audience, placement, budget etc. within the ad set

Having a clear understanding of how each of these parts work together is necessary to get the desired results by reaching the intended target audience.

Image showing a snapshot of the facebook ads manager screen
Example of a Facebook Ad Campaign Creation

PPC Keyword Research

The process of optimizing a site for the specific words, which people generally type in the search box of a search engine, is called keyword research.

The entire PPC campaign is usually setup around the right keywords.

Conducting keyword research for PPC is usually a time-consuming activity, but it is an essential component of a successful ad campaign.

It allows advertisers to connect with the right audience by keeping their keyword list relevant and refined.

In fact, one shouldn’t only rely on the keyword research done at the time of setting up the first campaign.

Instead, the advertisers need to keep revisiting the list to include low cost, relevant and long tail keywords that might drive more traffic to their site.

The keyword list for a PPC Campaign should be:

  • Complete– Your keyword research should be comprehensive and should not be restricted only to the most commonly used terms in your business. Preferably you should also include long tail keywords which are less common and more specific. Such keywords are less expensive as they are less competitive.
  • Relevant– You need to think like a customer and bid on keywords which are more relevant to your business offerings. Targeted keywords mostly lead to a higher CTR (click-through-rate) and cost-effective CPC (cost-per-click).
  • Expansive– To continually refine and expand your campaigns, you must continuously grow and improve your keyword list.

Value proposition of PPC Marketing

Pay Per Click marketing is beneficial for all stakeholders – searchers, advertisers as well as the search engines.

Advertisers

Advertisers can reach out to the target audience using PPC marketing. Marketers can make out a user’s intent based on the searched keyword and can offer the product or service that matches the query.

Also, the quality of the traffic generated via paid ad clicks can be measured which is useful information for advertisers.

Searchers

As per research by search engine land, 75% of people who click on paid ads say, whatever information or product or service they are looking for, they generally find in search ads.

Further, Google has a wonderful process in place which ensures that PPC ads meet the requirement of the searchers.

Search Engines

The search engines fulfil the requirement of both searchers as well as advertisers through PPC Marketing.

They provide relevant information through search results to the searchers looking for specific information.

At the same time, search engines enable advertisers to reach their target audience.

One of the main advantages of Pay Per Click advertising is that Google (and other ad platforms) don’t just prefer the highest bidders for that ad space, they also reward the highest quality ads (ads that are most popular with searchers).

Cost of a paid ad is lower when the ad is better and CTR is higher.

Managing PPC Campaigns – Monitor Regularly & Keep Adjusting

Do not set up your paid ad campaigns and then forget about them – that’s a sure shot way to overpay and underperform.

PPC ad campaigns need to be monitored frequently until you get the desired results. Make the required changes to optimize your campaigns by adding relevant keywords to expand the reach for your business.

Also, add negative keywords to cut down the unrequired cost by not showing your ad for negative keywords.

For example, someone searching for ‘free book on PPC’ is not looking to buy. By adding ‘free’ as a negative keyword, the paid ads will not show when a user types this text in the search.

You can also improve your site CTR and quality score by splitting your ad groups into multiple smaller groups. This helps to create more targeted ad text.

Another important thing that one needs to do is a regular review of the expensive keywords which are not performing well. Just stop using them to cut down the cost.

Further, one can also refine his/her landing page by adding a relevant call to action (CTA) pertaining to the user search query to increase the conversion rates.

However, don’t be in a rush to change your campaign in case your keywords are not frequently searched.

Rather wait for a few weeks before you make any changes to your campaign else you will end up spending more money which is not required.

All campaigns, even a well-designed one, should be reviewed and refined weekly.

If you want to manage within your PPC budget, you must also track ROI in the form of conversions.

 A conversion is not necessarily a sale, but a desired action taken by a visitor to your site.

Example of such activities can be a visitor making a purchase or registering for an event or filling details in a ‘contact us’ form.

There is no point of spending money on PPC advertising if you can’t identify a useful result of a user visit to your site.

 Conclusion

Due to ever-increasing competition in the current internet landscape, it becomes challenging for businesses to generate fast results.

PPC turns out to be one of the methods to get results rapidly provided your campaign serves the users searching for your business offerings.

However, a lot of effort goes into setting up a successful PPC advertising campaign.

From exploring and choosing the right keywords to formulating those keywords into organized ad groups and campaigns, to setting up landing pages that are optimized for conversions.

Search engines charge less for ad clicks which comes from an ad which is relevant and well targeted. 

So, to start leveraging Pay Per Click (PPC) advertising, it’s essential to learn how to do it right. The other option is to hire professional PPC experts (like Netilly) to help you out.

If you’d like to discuss how PPC can help your business or brand, then please drop us an email or leave your contact details and we will be happy to schedule a free consultation with one of our PPC experts.

8 thoughts on “What is Pay Per Click Advertising?”

    1. Hi Saurabh. Thanks for your feedback. We are glad that you found the post insightful. Do keep visiting our blog space for more such posts.

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