What is PPC?

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Pay-Per-Click advertising is an online marketing strategy that has been around for almost two decades now. It is used by many online advertisers as a main strategy for getting their marketing message across to their target audience.

Since the rise of online shopping, PPC advertising has become an extremely important component in the marketing strategies of companies of various sizes and industries. Additionally, a great number of digital marketing agencies offering a mix of services aimed at getting your website on the notorious first page of SERPs have started growing and developing industrial branches.

In a nutshell, due to the fact that 75% of internet users don’t scroll past the first page of search results, PPC advertising means you pay every time someone clicks on your ad in the search engine. However, it’s not as simple as it may sound. There are several basic elements that build the PPC system, as well as various approaches, strategies, and optimization techniques that make it complex.

Here are some basic information on what is PPC and how it works:

Introducing Google Ads:

As the most commonly used form of PPC advertising, Google Ads was introduced back in 2000 by the search engine giant as a self-service advertising platform that allows advertisers to place ads on selected keywords. It’s the easiest example of PPC advertising and consequently, the most used system in today’s digital world.

Google Ads runs on an Ad Auction system, which is the essence of the entire platform. It’s a bidding system based on complex algorithmic calculations designed by Google that allow advertisers to bid on specific keywords and have their ads shown to searchers.

How does it all work?

As the name indicates, you pay for each click your ads get. In order to get your ads shown, you need to get into the bidding auction and adjust your bid to the competition so you’re actually competing. Here’s how this auction works:

Everything starts with a search query.

Every search performed in the Google Search box tells Google to look into the advertisers’ pool and determine if there is a possibility for an auction. If there is, that means that there are advertisers who would bid on a certain keyword relevant to the query in question. The auction would begin, and advertisers would bid on keywords that Google thinks are relevant to the query that triggered the auction. Once the auction has started, your group of keywords, paired with a particular ad and a bid, would compete for a place in the ads section of the SERPs’ page.

How is your place in the ad section determined?

The main factor that determines where and how is your ad going to be shown is called the Ad Rank. This metric is the result of your bid and the overall quality score of your advertising setup. There’s a formula:

Max. CPC bid x Quality Score = Ad Rank

How much do you actually pay?

Although you set your maximum bid amount, it’s often not exactly the amount you pay for a click. Google takes into account several factors when determining the actual CPC for the clicks on your ad. Here’s another formula:

The Ad Rank of the advertiser below you / Your Quality Score + $0.01 = Your Price

Determining the success of your PPC campaign.

The ultimate goal is to get as many conversions as possible and for your PPC advertising campaign to be relevant to your business goals. There are several areas that you can optimize to achieve great results.

Keywords – Make sure you choose relevant keywords and group them tightly in relevant ad groups. Pair the ad groups with relevant, creative ad text.

Landing Page Experience – Don’t think that an eye-catching landing page design is going to bring you a spike in quality score, because it won’t. Your landing page needs to be on point and very precise. Most importantly, it should lead the visitor to the next logical step: take the call to action.

Quality Score – This is your holy grail in PPC. The higher the quality score of your ads is, the lower your CPC will be and consequently, the lower the overall costs. 

Finally, make sure you do A/B testing to see what works and what doesn’t and optimize, optimize, optimize!