What is PPC?
Pay-per-click (PPC) is an advertising model that lets marketers place ads on an ad platform and pay the host of that platform every time their ad is clicked.
The goal of a PPC ad is to lead the person viewing it to click through to the advertiser’s website or app, where that visitor can complete a valuable action, such as purchasing a product. Great stuff.
Advertising services, such as Google Ads and Bing Ads, operate with real-time bidding (RTB), where advertising inventory is sold in a private automated auction using real-time data.
How Paid Search Works
Every time there is a paid ad spot on a search engine results page (SERP), an instantaneous auction takes place for the keyword. The auction decides who will appear in the top spot of the SERP from a combination of multiple factors, including bid amount and the quality of the ad.
To get involved in auctions, advertisers use accounts on platforms such as Google Ads to set up ads and determine where/when they would like those ads to appear.
Accounts are split into campaigns based on different locations, product types or other categorizations. Campaigns are then further divided into ad groups which contain keywords and relevant ads. These categorisations ensure only the most relevant results are shown, which is a big help in the effectiveness of your ad campaign.
Keywords lie at the centre of PPC, connecting advertisers to users’ search queries. A query is the actual words that users type into the search box of a search engine in order to find results. Keywords are what marketers use to target these users by matching their search queries.
Depending on the keyword match types they use, advertisers can match search queries with more or less precision. They can either choose to match keywords with search queries exactly or allow for variations such as different orderings of the words, different spellings or the inclusion of other words.
It is also possible to have negative keywords, which will prevent ads from being triggered by search queries containing those keywords. Great for you, as it only keeps relevant traffic flowing towards your website and ensuring you get the most out of your money when paying for ads.
Bids and Budgets
In order to participate in the auction, advertisers need to decide how much they’re willing to spend on a given word. This is done using budgets at the campaign level and bids at the ad group or keyword level.
All ad groups must have bids, but keyword level bids override ad group level bids. Due to the RTB system, the actual amount paid by the advertiser is dependent not only on the maximum bid, but also the competitor activity and ad rank.
Search engines look at factors other than the highest bid to determine which ad should be at the top and occupying the most valuable spot on the search engine results page.
Different search engines have different ways of factoring in other elements to determine the ad rank, however, Google considers:
- Ad relevance and quality score (we’ll get to that in a minute)
- Bid amount
- Context of the search (such as time of day / user’s device)
- Format impact (whether it includes extensions that enhance the format of the ad)
In order to determine ad relevance, a metric is used called Quality score. This takes into consideration:
- Historical click-through rate (CTR)
- Relevance of the keyword and the ad to the search query
- Landing page quality
- Relevance of the keyword to the ad
This is why it’s so important to have an engaging and relevant ad that includes high-volume keywords. The site should also be optimised for user experience, including being relevant to the user, loading quickly and providing a smooth experience on all devices, as this also increases the rank of the ad. Keeping on top of all these factors will ensure your ads will be ranked as high as they possibly can be.
Choosing the right keywords allows advertisers to show ads to relevant audiences, but there are also other targeting options available to optimise campaigns including device, location, demographics, day and time.
These targeting options are essential because different variants of an ad may perform better for one group of users than for another. Bids can be automatically adjusted for keywords based on targeting options, this gives advertisers more control over traffic and spend by bidding on customers who are more valuable to the business.
Conversions are the end goal of PPC, the actions that advertisers want users to complete after clicking on an ad, which depends on the type of business being advertised. This could include signing up for a newsletter or purchasing a service.
It is essential to track conversions in order to assess the success of a PPC campaign and how many conversions can be attributed to paid search rather than other marketing channels. Platforms such as Google Ads can track conversions using a piece of code that is placed into the source code of the conversion page, which then collects conversion data.
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