The Beginner's Guide to Pay-Per-Click Advertising: Everything You Need to Know

Pay-per-click (PPC) is an excellent method for promoting your business and attracting new customers, but it can be somewhat confusing for beginners.

This guide will discuss:

Understanding pay-per-click

Key PPC terminology

The mechanics of PPC

Top PPC platforms

Pros and cons of pay-per-click advertising

PPC vs. SEM: Key differences

Initiating PPC

8 steps to effectively launch a PPC campaign

What is pay-per-click?

PPC (pay-per-click) is an advertising strategy that employs sponsored listings and advertisements to generate website traffic. While this advertising method is primarily linked to search engines like Google, PPC is also effective with other marketing channels, including video ads on YouTube and visual ads on social media platforms.

Types of PPC

Paid search marketing: This is the most prevalent form of PPC advertising and a common marketing technique within SEM. It is exclusively carried out through search engine platforms.

Social media advertising: PPC ads on social media are highly effective as they do not require users to perform a search to view your ad.

Display marketing: These consist of banners, images, or text ads on websites, usually based on your previous searches.

Affiliate marketing: Many brands utilize PPC marketing for affiliates, enabling them to earn money when users click on their individual profiles or personal pages.

Paid search vs. paid social: Which should you choose?

Examples of PPC ads:

Altracorp graphic illustrating various types of pay-per-click ads

Key PPC terms to understand

Search Engine Marketing (SEM) encompasses the primary methods of online advertising. It broadly refers to all strategies aimed at enhancing a website's visibility through search engines.

Search Engine Optimisation (SEO) involves organic strategies for marketing via search engines. SEO consists of guidelines for enhancing your website’s structure and content to achieve higher rankings in search engines’ organic results. Simply put, SEO is a technique to improve your website’s visibility in search engine results.

Keywords, also known as “keyphrases” or “search queries,” are terms that users enter into search engines, like Google, to find desired information. In SEO, keywords define your content’s topic, allowing search engines to index and rank it appropriately on the search engine results page (SERP). Discover how to perform effective keyword research.

Click Through Rate (CTR) represents the percentage of users who reach your advertised page by clicking on your ad (for instance, if your PPC ad receives 100 impressions and 1 click, the CTR is 1%). A higher CTR typically signifies better ad and keyword relevance compared to ads with lower CTRs. Google assesses your past CTR and predicts future ones to evaluate how well your ad aligns with a user’s search.

Quality Score, rated on a scale from 1 to 10, indicates how your ad quality compares to other advertisers. Your Quality Score (QS) helps Google decide your ad's ranking. A higher Quality Score suggests your ad and landing page are more relevant and beneficial to someone searching for your keyword compared to other advertisers.

Ad Rank determines the position of your ads on a page relative to others and whether your ads will be displayed at all. Ad Rank is calculated as your Quality Score multiplied by your maximum bid, and it considers your bid amount, auction-time ad quality (including expected click-through rate, ad relevance, and landing page experience). Your Ad Rank is recalculated each time your ad is eligible to appear.

Cost Per Click (CPC) bidding means you pay for every click on your ads. The CPC is influenced by the competitiveness of your keywords, maximum bids, and your quality scores.

Search Volume measures how often a particular keyword is searched within a specified period. SEO marketers use this metric to assess a keyword's popularity and competitiveness. A higher search volume indicates a more popular keyword and a higher Cost Per Click (CPC).

Keyword Difficulty is an SEO metric that evaluates the challenge of ranking on Google's first page for a specific keyword. It is rated on a scale from 0 to 100, with higher numbers indicating greater difficulty in ranking.

Domain Authority (DA) assesses the likelihood of an entire web domain ranking in the search engine results pages (SERPs). DA operates on a 0-100 scale, where higher scores suggest a stronger ranking potential. Websites with more backlinks and unique referring domains are more likely to achieve higher DA scores.

Match Types determine how closely a keyword aligns with a user's search query, allowing the ad to be considered for auction. There are three ad match types: broad match, phrase match, and exact match. Google defaults to broad match as it is the most commonly used ad match type.

Ad Groups are crucial in PPC marketing. They encompass all ads that share similar targets and focus on a set of keywords within an ad campaign. When effectively utilized, ad groups can drive traffic and leads to your site at a reduced cost, leading to more conversions.

A Landing Page is the page where a visitor arrives after clicking on a call to action (CTA).

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How does PPC work?

PPC is a business model where marketers pay each time their ad is clicked. Similar to SEM, PPC ads function based on keywords. Advertisers can bid on words or phrases that, when searched, will display their advertisement. The highest bidder pays the platform host when their ad is clicked, known as Cost-Per-Click (CPC).

Whenever there's an ad space available on the SERP, an auction occurs for the relevant keyword. The CPC is influenced by the competitiveness of your keywords, maximum bids, and quality scores. The ad that wins the auction appears on the SERP immediately.

Top PPC Platforms

PPC as a marketing channel encompasses several advertising platforms, with the most prevalent being Google Ads, Bing Ads, and Meta Business Manager (Facebook and Instagram Ads).

Google Ads

Google Ads, previously known as Google AdWords, is an online advertising platform by Google where advertisers bid on keywords to display their ads, service offerings, product listings, or videos to internet users.

With over 5 billion search queries daily, Google is a powerful platform for paid advertising. It allows you to advertise on the Google Display Network and the Google Search Network, connecting your offer with your target audience through various channels and placements, enhancing the experience for your prospects.

The Search Network allows marketers to create text ads that appear on the search engine results page (SERP). These ads are shown above or below search results on Google Search, or alongside, above, or below search results on Google Play, the Shopping tab, Google Images, Google Maps, and the Maps app.

The Display Network allows marketers to create display ads that appear on over 2 million websites, videos, and apps across the internet, including Google Finance, Gmail, Blogger, and YouTube.

Google Display Network reach fact

Start setting up your Google Ads with LOCALiQ’s comprehensive guide to Google Ads.

Bing Ads

Bing Ads, also known as Microsoft Advertising, allows you to run ads on Bing, as well as on Yahoo and AOL. The platform operates similarly to Google Ads, but there is a significant difference in market size and potential reach.

Globally, Google holds an average 86–96% market share, making it the leader in paid advertising. However, Bing Ads offer a lower CPC compared to Google Ads, albeit with a smaller audience. The average cost-per-click on Microsoft Advertising can be up to 70% lower than on Google Ads.

While Google dominates the search engine market, the Microsoft Search Network is rapidly expanding. Over 626 million monthly searches are conducted through the Bing Network from the UK alone. More importantly, Microsoft Ads reach 63 million searchers that Google Ads cannot, making it a worthwhile platform to invest in.

UK market data for Bing ads

Image source

Meta Business Manager (formerly Facebook Ad Manager)

The Meta Business Manager (or Meta Business Suite) platform allows marketers to manage all Facebook Pages, Instagram accounts, and business assets in one place. From the dashboard, you can create or schedule posts, stories, and ads for your business, with helpful insights to optimize your campaign.

Meta is a popular and effective platform for paid ads due to its wide audience reach and detailed targeting options. Like Google Ads, you can target Facebook ads to specific users at a highly granular level. Additionally, the Meta Business Suite platform offers a range of features and analytical tools to help you optimize ads and monitor campaign performance.

Explore our comprehensive guide to targeting audiences and setting up ads on Facebook.

These platforms offer various ad formats, including:

Search Ads

Shopping Ads

Display Ads

Video Ads

Gmail Ads

Single Image Ads

Carousel Ads

The fundamental principles of PPC remain largely consistent regardless of the platform and ad format:

Create or log into an advertising account with the chosen platform.

Build the ads (select relevant keywords, target audiences, ad copy, and images, etc.).

Decide how much you are willing to pay for each click and set a budget.

Once the campaign is live, your ad enters an auction with others targeting the same keywords. The auction determines when and in what order the ads are displayed.

Whenever someone clicks your ad, you pay (CPC).

Advantages and Disadvantages of Pay-Per-Click Advertising

PPC offers many benefits, such as generating quality leads, gaining insights into your audience, and increasing your online visibility to make your business stand out. However, paid advertising also has its limitations and risks.

Recognizing the strengths and constraints of PPC advertising will enable you to develop a search campaign strategy that aligns with your business goals.

LOCALiQ illustration highlighting the pros and cons of PPC

Benefits of PPC advertising:

Boost brand visibility and website visits

You can display your paid ads across various sites and networks, enhancing your website traffic. For online businesses, paid ads are a highly effective method to attract customers and generate qualified leads. Moreover, placing your ads at the right moment and location can be highly advantageous.

Attracts qualified leads and interested users

The aim of a PPC campaign is to draw qualified visitors to your website and encourage them to take action (e.g., make a purchase, complete a form, get in touch). PPC not only generates leads and revenue but also guides businesses on where to strategically place ads to reach those most likely to convert.

Worldwide reach

Search engines and social media platforms offer geotargeting, allowing advertisers to achieve both local and global reach with their PPC ads, enabling them to target users in specific, relevant areas.

Provides immediate and measurable outcomes

Paid ads are highly time-efficient; they can be launched in under an hour, and your listing will instantly appear in the sponsored results. Typically, paid search advertising delivers rapid results, which is why it is frequently used by marketers. Unlike organic search, paid search can drive a large number of visitors to your site in a short period, provided your ads are optimized for your target audience.

Yields a remarkable return on investment (ROI)

According to Google Economic Impact, for every $1 a business invests in Google Ads, they earn $8 in profit through Google Search and Ads (approximately £6.55 profit for every £0.820 spent).

Comprehensive data analytics

PPC grants access to extensive data. You can track all results and monitor campaign performance using tools like Google Analytics. Search engine and social media platforms offer conversion tracking and detailed analytics, allowing you to observe PPC ad performance in real time and gather insights about the users interacting with them. This can be a valuable tool for developing a more complete understanding of your target audience as part of a long-term marketing strategy.

Cost-effective and budget-conscious

With PPC, you pay only when a user visits your website, making it cost-effective. You can customize paid campaigns based on your overall spending capacity. You can set a maximum budget to ensure you don't overspend on the keywords you choose to bid on and only pay when someone clicks on your ad or search link.

Drawbacks of PPC Advertising:

PPC can be hazardous.

Traffic may fluctuate, and clicks do not ensure sales.

Managing PPC ads requires significant time.

Time must be invested in optimizing and enhancing to achieve optimal results. It demands expertise to create effective campaigns, and many businesses opt to hire a specialized agency.

Highly competitive environment

Given how search engines operate, users encounter numerous options for the same product, making it easy to be compared with competitors. Moreover, in certain sectors, paid search can be fiercely competitive as some keywords are highly valuable for driving engagement, leading to high cost-per-click.

PPC ads might reduce your credibility

Consumers are increasingly hesitant to click on paid ads, preferring to trust organic results. Most users recognize that paid ads are positioned high on the SERP because a company has paid for that placement, and they often skip paid results in search of the first organic results.

Visibility is budget-dependent

With paid ads, once your budget is depleted, your link will no longer appear at the top of search results.

Potential for budget wastage

Marketing budgets can be squandered if audience settings, keyword selection, and goal tracking are improperly managed.

Distinctions between PPC and SEM

You may have encountered the terms SEM and PPC used interchangeably, and we often receive inquiries about their equivalence. Despite their similarities, they differ slightly.

SEM and PPC are paid strategies through search and other platforms.

SEO involves the organic efforts in marketing via search engines.

‘SEM’ stands for search engine marketing, encompassing all marketing strategies aimed at enhancing a website's visibility through search engines. SEM includes more than just paid marketing; it involves both paid and unpaid methods, PPC, or organic traffic. Essentially, any marketing activity conducted on a search engine (including SEO and PPC) is part of SEM.

Conversely, PPC is an advertising model that employs sponsored listings and adverts to drive traffic to a website (making it an SEM method). This advertising form is most commonly linked with Google, yet unlike SEM, PPC operates across search engines and other platforms such as video ads on YouTube and visual ads on social media.

SEM vs PPC: What Sets Them Apart?

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Begin with PPC

Ready to embark on PPC? Discover how to set up a Google Ads account here.

8 steps to successfully launch a PPC campaign

1. Define a goal for your PPC campaign

Every campaign requires a goal to enable active tracking and performance monitoring, allowing for necessary adjustments. Your objective should be clear, such as generating leads, increasing website traffic, or boosting conversions. Ensure these goals are specific and timely.

2. Analyze keywords

There's a variety of keywords available for your PPC advertising strategy, but they can be costly. Review the 20 most expensive keywords in Google Ads.

If you're paying a high CPC, ensure it's worthwhile. A reliable keyword tool can assist in selecting keywords that are likely to drive sales or conversions without being too expensive.

Free SEO keyword tools you can use:

Keywords Everywhere– A free Chrome & Firefox plug-in that displays search volume, search difficulty, suggested keywords, and competition across multiple websites.

Moz Search Bar– A free Chrome Extension that simplifies obtaining link metrics and conducting SEO on the go.

SEO quake– A free add-on providing key SEO metrics and other useful tools such as SEO Audit.

Learn all you need to know about conducting effective keyword research.

3. Select your match type

Keyword match types determine how aggressively or restrictively you want Google to match your ad to user search queries.

There are 3 primary keyword match types:

1. Broad match is the default type, reaching the widest audience. Your ad will appear if a user's search query is related to your keyword in some way.

Note: Exercise caution with broad match types; while they can drive numerous clicks, monitor search query reports to avoid paying for irrelevant traffic. Use broad match if your PPC campaign aims to maximize landing page traffic.

2. Phrase match is a middle ground between broad and exact match, offering some flexibility of broad match but with more control. Your ad will show if the user's search query includes the keyword phrase, even with words before or after it.

3. Exact match is the most specific and restrictive type. Your ad will only display if the user's search query exactly matches your keyword phrase.

LOCALiQ graphic showing different match types with examples

4. Craft your ads

With goals, keywords, and match types established, you can start creating your paid search ads. Keep these guidelines in mind when writing your ads.

PPC search ads have four main components:

Headline 1 allows up to 30 characters.

Headline 2 allows up to 30 characters.

Display URL

Description allows up to 80 characters.

PPC social ads have three main components across all ad types:

Headline

Description (optional).

Primary text (You can add multiple text options, and the platform will display one based on user response likelihood).

For specific text and design tips for different ad types, read our blog.

To maximize limited ad space, ensure your copy does the following:

Directly addresses your target audience.

Features an enticing offer.

Incorporates the primary keyword you are targeting.

Include a clear CTA to guide the searcher on what to do next.

Ensure the language matches your landing page content.

5. Prioritize the language of your PPC copy

Your text ad copy should be clear, descriptive, relevant, and compelling.

Top tips for crafting PPC text ads:

Focus on 3-5 specific keywords that are pertinent to your organization and industry.

Utilize a keyword tool to find the optimal keywords for your business.

Incorporate descriptive words in your PPC ads to accurately represent your business and distinguish you from competitors, such as ‘innovative,’ ‘modern,’ ‘adaptable.’

Include specific CTAs. For instance, if you want customers to download your content, use a ‘Download now’ CTA in your ad.

Consider your user and the information they seek, and integrate that into your text ad. What sets you apart from your competitors? Do you offer any unique products or services?

6. Utilize Ad Groups

Ad Groups or ad sets are crucial in PPC marketing. They encompass all ads with similar targets, focusing on a set of keywords in a campaign. When used effectively, ad groups can drive traffic and leads to your site at a lower cost, leading to more conversions.

Organize your ads by a common theme using ad groups. For example, create ad groups based on your campaign objective, audience, or the products and services you offer. Additionally, conduct A/B testing to compare ad sets and determine which performs better.

7. Optimize paid ads for mobile

Mobile devices exhibit different user behavior and search intent compared to desktops and tablets. You might rank well on desktop but not appear on the first page of mobile results. Therefore, it is crucial to optimize your paid search ads for mobile use—failing to do so could harm your marketing efforts!

Top Tip: Monitor your site's mobile performance by regularly reviewing your Google Analytics dashboard and frequently conducting mobile site speed tests.

8. Be strategic with budget

PPC campaigns can become costly if not set up correctly. To avoid overspending, set a maximum bid cap, indicating to Google the highest amount you’re willing to pay when someone clicks on your ad.

Explore various bidding strategies to manage your budget spending. Assess the advantages and disadvantages of each strategy and choose the most suitable one for each campaign.

Discover how to successfully launch and manage a paid search campaign.

At Altracorp Digital Pro, we dedicate time to understanding your business, crafting the most cost-effective paid advertising campaign for your budget—ensuring your ads reach the right audience.

Our team of digital marketing specialists offers expert marketing support—from PPC campaign management and professional SEO and content marketing services to paid social, digital display advertising, and more.

Contact us to learn how to achieve the best results from your campaigns.