All About Pay-Per-Click Advertising – How PPC Advertising Works
Pay-Per-Click (PPC) advertising is a form of digital marketing where marketers pay Google when a user clicks on their advertisement.
In order to get your advertisement displayed to the appropriate audience, you must place bids on “keywords”.
Keywords are essentially the terms that potential customers type into Google.
For example, let’s take a customer who lives in Ogden, Utah and is looking for a plumber. They are likely to go to Google and type in “Plumber in Ogden”.
Plumbing companies who are advertising using PPC would place bids on search terms like this. The more that they spend, the more likely they are to get displayed at the top of Google.
Side Note: While there are many PPC platforms, Google Adwords is the most widely used. Google is the biggest of all search engines by far (80% market dominance).
For that reason, this article will primarily talk about PPC as it pertains to Google Adwords even though there are tons of similar platforms.
Google Ads and other search engines have an ad auction process where advertisers bid on keywords. The targeted keywords are then given to the highest bidder.
This process is fully automated. Google will also display ads based on a number of other factors such as relevance, quality score etc.
There are many types of PPC ads campaign options available. The one described below is the typical search PPC campaign which shows results when users type search terms into Google. This is the most common method but by no means the only one.
The Basics of PPC
Pay per click advertising is very simple in theory, though it can get complex very quickly with a disparate number of moving parts. Marketers will have an idea of the conversion rates with potential customers.
For example, one in thirty people might make a purchase when on certain landing pages with a one in seventy conversion rate.
Bonus tip: Make sure that the webpage you are sending them to is optimized just for them! Place a ‘Call to Action’ that lets the potential customers know exactly what you want them exactly what you want them to do.
So the cost of a certain keyword click, multiplied by seventy, would be balanced against the profit made from the sale of a product. If the multiplication is more than the estimated profit then the campaign would not be worth it. Obviously, this is a rough example and there are many other considerations. Each keyword will be associated with a cost per click cpc.
Marketers will first start off a campaign with a base keyword, such as “Nike Shoes”. So the “Nike Shoes” campaign would be created on Google Adwords. When people type in “Nike Shoes” into Google, then the PPC ad would show up, and a user could click on it. Search campaigns can also be localized to target local customers.
The amount paid by the marketer to Google is predetermined and an auction system takes place where advertisers bid on keywords. There are a number of sub-campaigns that can be made from the core keywords, such as “Best Black Nike Shoes” or “Nike Shoes Wisconsin”.
Google AdWords Match Types
There are four types of match types. An exact match is an exact term – “Nike Shoes” typed into Google. But there are also phrase search results, where PPC ads would show up for the term “Best Nike Shoes 2019”, as it contains the phrase “Nike Shoes” within it.
Then there are broad keywords, so a similar term like “Good Shoes by Nike” could result in a PPC advertisement showing up. There is also session based broad searches where previous keywords are remembered in terms of what advertisements & ad groups get displayed.
Adwords campaigns have a high degree of customization and sophistication and can require a detailed level of analysis to do correctly. Match types are very important as they will determine what customers get to see and thus click on a certain advertisement. Some search terms will convert far better such as “Buy Best Nike Shoes Today”, but they will also be far more expensive.
Different Kinds of PPC Advertisements
There are many different categories and subcategories of PPC advertising. The five most common are search advertising, social advertising, remarketing, display advertising, and Google shopping –
- Search advertising is the most common, dominated by Google Adwords and to a lesser degree Bing Ads. When you type a term into Google, often you will see two ads on the top of the page with a green label. These are paid ads and are not organic results. There are a number of variations within search advertising, such as image ads where the copy can be written underneath.
- Social advertising is useful for companies who prefer to connect with their customers over social media. A large social media presence is not even required. The main social media platform is Facebook, though LinkedIn and Twitter can also be quite useful. If an advert goes viral, then it can be very profitable. Target ads can be placed in the newsfeed of certain target demographics.
- Remarketing is an exceptionally effective form of marketing where previous ads show up in alternative locations. This method (re) targets people who have already demonstrated an interest in your product. It will keep visitors engaged in a particular brand and remind them of what they did not buy previously.
- Display Advertising shows ads across all Google partner websites. It enables marketers to select their exact target demographic or those who have visited similar websites before. It is possible to use both image and text ads and to get specific with regard to what target audience sees your adverts.
- Google Shopping is suited for those who have an eCommerce website. These campaigns show your product in a carousel before visitors have even visited the site. They are effectively a preview for your items before the customer even enters your website. This provides customers a sneak peek at the price and description of your products before they click to learn more.
Why is PPC Advertising important for small businesses?
The reason is simple.
PPC advertising is incredibly lucrative and can be extremely profitable as a form of online advertising.
However, it takes years of experience or alternatively outsourcing the campaign to a specialist. It is not a static industry and even if you know your conversion rate, sometimes it might just not be accurate, for various reasons.
Complexity aside, PPC is still a huge bonus for advertisers and business owners who take the time and resources to make it work for them. It is possible to target location, demographics, and even devices such as iPad or Desktop.
Because of the level of customization involved, it is possible to find the audience who are looking for your product and to get them to click on your ads.
The market is there, and with enough investigation and experimentation, a PPC campaign can bring your product and services to them. Just remember to start small, monitor your ad spend, run a lot of tests, and work your way up.