Pay-Per-Click Advertising: What Is PPC Advertising?

As you look for different ways to promote your brand, you have multiple options available to you. You can connect with customers on social media, invest in search engine optimization (SEO), and develop content marketing materials, such as videos. Using multiple channels to market your business can help you grow your brand and reach new people. One option to consider is pay-per-click advertising (PPC). Learn more about this promotional tool and how it works.

What is pay-per-click advertising (PPC)?

As its name sounds, with PPC you only pay for an advertisement when someone clicks on it. For example, if you show your ads to 100 people, but if only 10 people click on the ad you only pay for those 10 clicks. PPC is a direct contrast to broadcast advertising, where you pay a flat fee to reach a large audience of people. Broadcast advertising includes radio and TV ads, newspaper ad placement, and some banner ads or sponsored posts in digital content.

PPC has become increasingly popular for two reasons: it is easy to track, and it is cost-effective. First, many PPC systems can account for every click that comes through. They have to in order to bill clients effectively. Next, businesses can set clear budgets for how much they want to spend. They can stop their ads after they hit a certain number of clicks, or hit a spending limit. This differs from a newspaper or TV ad where the media outlets have flat fees for advertising.

How does PPC work?

Each PPC platform is unique, but two of the most widely used pay-per-click platforms are Google Adwords and Bing Ads. This article will primarily focus on Google ads for the sake of clarity.

Within the Adwords interface, you can create a PPC campaign. This is a high-level group of keywords that you want to target, which are then sorted into ad groups. For example, a shoe company might create ad groups for heels, boots, sandals, and running shoes. An ad group for heels might contain specific keywords like red heels, high heels, or pumps.

These keywords are common search terms that your customers use. When someone searches for “red heels,” they see PPC ads for companies that sell that specific product. You can bid on any search term and show your ad related to it. If the ad is relevant, then customers will click on it. If it isn’t, then your customers will not. You won’t get charged for the ad view, but you also won’t get the website traffic you need.

How do you evaluate the success of PPC campaigns?

Within the Adwords interface (or any system you use), you will see different metrics you can use to evaluate your success. The click-thru-rate (CTR) is the percent of people who click on your ads. This takes the number of clicks and divides it by the number of impressions. Adwords can also track conversions, or the number of customers who buy your products after clicking on an ad.

Google, in particular, measures success through a quality score. This is the relevancy of the ad and the landing page to the search term.

A high quality score means your ad and business is exactly what customers are looking for.

PPC campaigns are built on supply-and-demand bid systems. You pay more for more competitive terms and less for less popular terms. However, a high quality score may increase your average position or bid cost because it provides such a good ad experience for customers.

Developing and managing PPC campaigns can quickly get overwhelming — especially if you have a lot of products and a large audience. Consider hiring a PPC advertising agency to manage your campaigns for you and maximize your ROI.


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