PPC: A Comprehensive Guide to Pay Per Click

Pay-Per-Click advertising has the power to generate thousands of website visits, leading to more leads, sales, and revenue. Discover everything you need to know in our PPC Guide.

What Is PPC?

PPC (Pay-Per-Click) is an online advertising strategy where businesses only pay for each click on their advert. 

These ads typically appear at the top of search results on Google, Bing and other search engines. 

For example, a search for ‘whey protein powder Brisbane’ brings up several Google ads, some more relevant than others.

screenshot of an example of ppc in a google search

They can also appear in other sections of the search results page and in different formats. For example, this popular products section on Google. 

screenshot of popular whey proteins in a google search

One of the main benefits of PPC marketing is its precision. You can bid on the exact words that potential customers are searching for at the same time they’re searching for them. Plus, you receive tons of user data that you can use to optimise your future ad campaigns. 

PPC vs. SEO

People often debate whether PPC marketing or SEO (Search Engine Optimisation) is the best marketing strategy. However, using them in conjunction can be a better option as they complement each other’s strengths and weaknesses.

In general, SEO focuses on building a steady stream of organic traffic. You’re rewarded with tons of free traffic if you can rank well in the search results. But the problem is that it can be challenging to rank initially, and it takes time to build a reputation. 

Conversely, PPC is much faster at generating traffic. You could launch a campaign in a single afternoon and generate leads that same day. But the main drawbacks are that PPC advertising costs money, and your traffic will slow down if you don’t run ads. So rather than thinking of it as PPC vs. SEO, think of it as PPC and SEO.

How does PPC work?

PPC marketing campaigns typically work through auctions where advertisers bid on keywords. A keyword can be as simple as ‘PPC’. Or more specific like ‘PPC agency London’. It’s also possible to bid on a group of related keywords.  

If a bid wins, the platform will show its ad to the searcher. And if the ad is relevant and attention-grabbing, it’ll attract a click where users will get sent to your website.

What is a PPC ad auction?

A PPC ad auction is what happens once a user searches for something on Google or another search engine.

A platform uses it to determine: 

  • Account eligibility and ad relevance.
  • The display order of the ads.
  • How much a click will cost for each ad.

For example, during an auction, Google analyses factors like your: 

  • Maximum CPC (Cost-Per-Click) budget.
  • Quality Score (QS) (determined by click-through rates, ad relevancy, and landing page interactions. 
  • Ad Rank (QS x Max CPC) and how it compares to other advertisers.

With these metrics, they will: 

  • Give your ad a Quality Score from 1-to 10.
  • Determine your Ad Rank from your QS and CPC budget.
  • Assign your final CPC by dividing the subsequent advertiser’s Ad Rank by your QS + $0.01.

What are the different types of PPC ads?

There are too many ad variations to mention, so these are the major categories:

Social media ads

Facebook alone has almost 3 billion monthly active users, so it’s no surprise that PPC social ads are prevalent. Users spend hours on their favourite platforms, so it’s the perfect chance to engage with them. 

They often look like organic posts, so they blend well with the platform’s experience.

a facebook advert for broadbands displaying ppc on social platforms

You can target your ideal customers based on criteria, such as: 

  • Demographics
  • Interests
  • Location
  • Behaviour
  • Connections

Besides aiming for a conversion, these ads can also help you grow your social pages.

Search ads

Search ads are the most common PPC marketing choice. They’re shown in search results from Google, Bing, and other search engines.

a google advert of keyword tools

Google shows search ads above organic results, giving advertisers the first chance to get a click. Besides text ads, there are also image ads like the whey protein example in the beginning. 

The most significant benefit of search ads is that users actively look for the keywords you’ve bid on, making them more likely to click and convert.

Retargeting ads

Retargeting ads help you reengage with people who’ve interacted with your brand. 

Some situations where you can use retargeting include: 

  • Abandoned carts.
  • Email list signups.
  • Selling to previous customers. 

Here Booking.com uses a retargeting ad on social media to convince customers that have already interacted with their site to make a booking.

Display ads

Display ads are typical on content and news sites like Forbes and Business Insider. 

They’re often banners, like the following example from Qlik. But they can also be smaller images or text-based ads.

Excellent display ads are eye-catching and build awareness of your brand. They’re also perfect for eCommerce retargeting, as you can display abandoned products.

Steps to launch your PPC ad campaign 

Launching your first PPC ad campaign might seem like a challenging task, especially if you’re new to the experience. Here’s a breakdown of the steps you need to know to get started.

1. Choose a platform and create an ad account

Once you know which type of PPC marketing campaign you want to run, you need to choose a platform. You don’t need to always stick to one, but focusing on one will be less stressful in the beginning. 

Most ad accounts require basic information, such as your: 

  • First and last name (or business name)
  • Email address
  • Website

But some platforms, like Google Adwords, require payment information to set up even though you won’t begin paying immediately.

2. Find your target keywords

PPC advertising is all about bidding on target keywords. And to get the most out of your ads, you need to target the right ones.

It’s not as simple as choosing relevant keywords off the top of your head. Sometimes your first choice is highly competitive, which will increase your CPC, so it’s better to use a close match. But you’ll only find the best keywords through research. 

Keywords fall into two categories: 

Short tail: These are more general terms like ‘cat toys’ or ‘exercise equipment’. Short tail terms tend to bring you many unqualified, low-converting traffic as these users aren’t searching for something specific.

Long tail: These are more specific terms like ‘content marketing agency in Melbourne’ or ‘translation services in LA’. Long-tail keywords are often less competitive as they apply to fewer businesses. They also bring less traffic than shorter keywords, but this traffic is ready to buy. 

You may already have an idea of the keywords you want to target, but it’s essential to double-check their metrics with a keyword planning tool. 

Keyword planning tools

Keyword planning tools give you estimates on how keywords may perform. They highlight a keyword’s competition, average cost-per-click, average monthly searches and more. 

You’ll generally want to target keywords with low competition and CPC but high search volume.

There are tons of keyword planning tools out there. But Google Ads is one of the most popular as it’s the main source of search information—and it’s free. You can access the planner as soon as you create a Google Adwords account.

Other keyword planning tools include: 

  • Ahrefs
  • SEMrush
  • Moz
  • Keywordtool.io

3. Have a clearly defined budget

A consistent budget will make monitoring your PPC performance and making any necessary changes easier. 

There are a few ways to define your PPC budget: 

  • Figure out how much you’re willing to spend daily or monthly.
  • Decide how many conversions you need X conversion rate X estimated CPC.
  • Set it based on your ideal number of clicks each day.

Advertising platforms won’t follow this exact daily budget as you won’t get consistent clicks. But across the month, the platform will stay under budget.

4. Create your first PPC campaign

You’ll need to know your max CPC budget to set up your campaign. Keyword planners often give you average CPC numbers, so there’s an excellent place to start. 

If you’re not confident, most platforms also provide automated bidding so that everything is taken care of once you input your information. 

If you want to set your bids manually, a few guidelines include: 

  • Setting your bid within Google Adwords’ (or another platform’s) suggested range. Bids under this range may still show, but there’s less chance of this happening.
  • Ensuring your daily or monthly budget is sufficient for the number of clicks you want. If your daily budget is $5 and the keyword’s CPC is $4, your ad will only show briefly. 
  • Don’t use a budget that brings in more clicks than you can handle. You’ll waste advertising budget and time on customers you can’t serve

Once you know your budget, you’ll need to add other information like the keywords you’re bidding on and searcher locations. 

Next, you’ll submit your bid, write your ad and link it to a relevant landing page to drive conversions. 

Finally, you can add your payment and billing information and let your ads run.

5. Monitor your ad performance

The beauty of PPC campaigns is the mountains of data you receive from user interactions. You can analyse your CTR (Click-through Rate), CPC, landing page conversion rate, and other factors to improve your ads. 

If you’re running PPC ads on Google, you can create a Google Analytics account to dive into the data from your campaigns. 

To capture your ad data, you’ll need to set up conversion actions in your account. These actions can include purchases, form interactions, clicks or anything you deem necessary. 

Google Ads’ help docs show you how to set up conversion tracking

Some ways to improve your ad performance include: 

  • Adding negative keywords: If associated keywords aren’t relevant to your ad, it’s a good idea to add them as a negative keyword to avoid bidding on them accidentally. 
  • Cut expensive keywords: If your CPC is too high for your offer, you should cut the keyword straight away. Otherwise, you’re setting yourself up to lose money. 

Optimise your landing page: Platforms often use landing page experiences to rank your ads. Improve your page by making it more engaging, test different calls to action and use optimised landing pages for each keyword.

How Much Should I Bid For PPC?

How much to bid on PPC campaigns depends on your offer and the keywords you target. 

If you’re selling a product or service where customers are worth $1,000, then a $5 CPC is likely fine unless you have a conversion rate under 1%. And if a keyword’s average CPC is $5, it’s wise not to bid too much higher as you could waste money. 

To start, you can bid slightly under the average and increase your bid until you find the CPC sweet spot.

Controlling the costs

The good part about PPC campaigns is that they never exceed your monthly budget. So if you set your CPC too high, you won’t lose millions of dollars if you set your budget to $10,000. 

Conversely, you don’t want to create a budget that’s too tight. For example, most users won’t see your ad if your target keyword has a $5 CPC and your daily budget is $10. So you’ll need to increase your budget or find a keyword with a lower CPC.

The Benefits of PPC

PPC campaigns are an online advertising staple for reasons including: 

Speed to Market

You can set up your first ad—and even start generating traffic—in a single day. The longest part of the process is waiting for ad approval from the platform, which typically takes a few hours. 

This speed makes PPC advertising excellent for new businesses and companies that want to generate traffic quickly or test a new product. 

Targeting and Tracking

PPC campaigns let you target hyper-specific keywords and geographical areas. This feature ensures your marketing budget isn’t wasted and improves conversions. 

And since many online actions can be tracked and analysed, PPC campaigns provide you with valuable data. You can use this data to shape future campaigns, optimise current ads and inform other marketing efforts like SEO. That way, you won’t waste your time ranking in organic searches for unprofitable keywords. 

Advert Variation

Split or A/B testing is a must in marketing, and PPC campaigns make them easy to run. Small changes like using one word instead of another can improve the CTR and CPC of your ads. 

And with PPC, you can quickly gain feedback on your ads and landing pages for the price of a few clicks. Above all, PPC ads can help you optimise your keywords, CTAs, copy and landing pages much faster.

On the Downsides of PPC

While there are tons of benefits to PPC, it does have some drawbacks, including: 

  • Monitoring and optimising: Running PPC campaigns requires constant monitoring and tweaking to stay profitable. Different keywords may become more popular, or competitors may outbid you, so you must stay vigilant. 
  • Ad avoidance: Some users avoid paid search results like the plague. While this won’t cost you money, it’s a reminder that you should also focus on organic marketing to maximise revenue. 

Costing money: PPC campaigns can be expensive if you target high-competition keywords. And in the beginning, you may not have enough experience to reap a good return on investment. But as long as you’re optimising your ads and improving your skills, PPC will become a profitable channel.

PPC Tips & Latest Trends

The PPC landscape is always evolving. SEJ asked top marketers what trends they expect for 2022 and beyond. 

Here are four top trends: 

  • Automation: People generate tons of data, and automation is necessary to analyse it well. While humans will still take charge of strategy, AI and data will play a significant role in identifying trends and customer behaviours.
  • First-party data: Due to privacy updates, companies need to capture and manage their own data. Otherwise, their targeting accuracy will begin to drop. One way to do this is with Google’s Offline Conversion Tracking tool. 
  • Diversification: Algorithm updates can hurt companies relying on one marketing platform. Instead, diversification ensures your business can survive until you figure out how to market after new updates. 

Responsive Search Ads (RSAs): RSAs are different to the Expanded Text Ads we’re used to. It seems they’re here to stay, so it’s vital to work out best practices for them.

Quick-fire PPC Tips

  • Always set aside time to analyse and fine-tune your keywords. 
  • Keep an eye on your bid amounts to ensure your ad is showing and you’re not overpaying.
  • Ensure your ad, keywords and landing page share similar language as this is what the user is searching for.
  • Conduct regular split testing on ad formats, copy, keywords and other variations. 
  • Make it easy for customers to take action with simple landing pages. 
  • Always use a CTA on your landing page to drive conversions. 
  • Ask for customer information on your landing page so you can contact them later.
  • Use conversion tracking to optimise your PPC campaigns.

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