PPC 101: How Does Pay-Per-Click Work and Why Do You Need It?

how does pay per click work

PPC (pay-per-click) is one of the busiest business highways of the internet.

It plays a vital role in any winsome digital marketing strategy, applicable across the entire buyer journey. And if you’re already wondering “wait, how does pay per click work at all”, fret not.

Simply put, you essentially buy visibility with almost immediate effect.

This visibility, albeit not organic, can be nothing short of a game-changer. According to Wordstream, 64% of people click on ads when looking for products and services online. This figure speaks volumes about the efficiency of PPC.

The only problem is there’s a lot of ground to cover, from defining a budget and timeline to finding the audience. The good news is others have been where you are now and left a trail of proven methods.

We’ve compiled a comprehensive guide on this prominent strategy and what it can do for you. So, let’s examine what’s happening under the hood.

How Does Pay Per Click Work?

In a nutshell, PPC is a form of online advertising, similar to pay-per-impression or pay-per-view.

Its defining trait is the intended interaction brands seek to initiate: a click (on an ad).  As such, PPC is just one facet of modern marketing. If nothing else, there are other noteworthy strategies with an amazing track record.

Achieving higher organic ranking is a prime illustration, an objective associated with a heap of benefits. Apart from advantages, however, one also has to mind the drawbacks. It takes a lot of hands-on experience and time to actually bring in traffic with SEO tactics.

And this is precisely where PPC comes into play.

It’s geared toward specialized and time-sensitive campaigns. You could, for instance, conquer a new geographic market and directly chip away at the competition. This is possible to accomplish in a fraction of the time it takes to execute alternative online strategies.

What is more, getting to the forefront of search or social media has profound implications. Believe it or not, whopping 98% of users choose a business featured on the first page of results. This is just one example of how PPC adds value to organizations.

Supporting Pillar of Online Presence

But, it’s important to underline PPC isn’t overly effective as a sole approach.

It best works in a well-established context of advanced analytics, business goals, and other online tactics, such as SEO.

This is to say it’s great for supplementing these activities and filling in the gaps.  In concrete terms, you could start building awareness of your new offerings with ads right away. Then, it makes sense to get into SEO in order to take your digital strategy to new heights.

This integrative approach levels the playing field somewhat. It empowers you to gain a foothold in the sector already occupied by other players.

Therefore, you should be careful not to go all-in just chasing short-term avail.

Effects of strategies like content marketing and SEO accumulate over time and make a huge difference in the long run.

Google’s Pay-to-Play Proposition

PPC encompasses various platforms and mediums.

The two main types of ads we can distinguish from are Google Ads and Social Media Ads.

In the case of former, you pay the search engine giant to list ads to your side or offerings. These ads have a prominent place in search engine result pages (SERP), appearing every time a related query occurs. When a user clicks on the ad, you need to pay the agreed-upon Cost per Click (CPC).

Notice there are several types of Google Ads:

  • Search Ads: displayed above or beside search results
  • Local Search Ads: a subset of Search Ads with a local focus
  • Display Ads: text messages and banners that exist across the digital ecosystem
  • Pre-Roll Ads: a form of video advertising on platforms like YouTube
  • Remarketing: targets people who have visited your site or another piece of digital real estate

In general, Google Ads are a major pathway to online prominence for one reason. They have an unparalleled reach, spanning around 98% of the web.

Social Advertising

When it comes to social ads, they have a more limited scope.

On the other hand, the main thing they have going for them is a superior level of audience refinement.  Also, we should emphasize social ads vary in format quite a bit.

Single images and videos are quite common across popular networks. It seems people are much more attracted to ads with visual flair than text-only counterparts.

A real behemoth in this advertising landscape is Facebook, which has the largest base of monthly active users. Facebook also owns Instagram, so there’s smooth integration between the two platforms. You can hardly go wrong firing on all cylinders there.

However, this isn’t to say Facebook is a one-size-fits-all solution. If you’re in a B2B sector, you’re better off investing in PPC on LinkedIn. There are some other less-obvious choices with niche appeal as well.

A Numbers Game

The key priority in the early, planning stage is to set up a sound budget.

Here, there are no hard rules except one: you only pay for the clicks you receive. When the budget runs dry, your ads can no longer be displayed. This is rather self-explanatory, but designing the budget is all but.

One useful tip is to always scope out budgets of your competitors. This puts things in perspective and helps you navigate the financial waters. Besides, keyword price in some cases (Google Ads) fluctuates based on demand for them.

There’s one often-misunderstood financial aspect of PPC we have to address here.

Namely, having a budget in place is no guarantee that your ads will appear on people’s screens. Ad placement hinges on an automated auction process. The winner pays the exact amount needed to outrank the next advertiser on the list.

Hence, like it or not, you cannot simply pay to ensure your ads come on top. Most networks want to award highest-quality ads not the highest bidder per se. This is why they have parameters like Quality Score.

Venturing Off the Beaten Path

Note that there are some caveats linked to specific types of ads.

For instance, Display Ads allow you to opt for the CPC model, but also cost-per-thousand-impression (CPM) and cost-per-acquisition (CPA).

A Boost Post feature on Facebook is an interesting example as well. It enables you to essentially turn a post into an ad for the audience you select.

Similarly, LinkedIn boasts Sponsored Content. It pops up in news feed, provided that you cover CPC or CPM costs and outpace the competition. One great advantage of this tactic is heightened audience engagement.

The takeaway is to be smart about choosing the platform for deploying ads. Seek to utilize their user-friendly features and pre-set options. At the same time, don’t forgo customization because you would do yourself a big disservice.

Google Adwords, for example, runs campaigns the full extent of the Google Network. The reach is undoubtedly a great selling point, but it comes at a price. Google Display Network, in particular, can deplete constrained budgets quickly.

Opting out of it could be a great decision, which lets you continue fueling campaigns. The lesson is to remain in full control of your campaigns.

Hitting the Bull’s Eye

Getting the ads in front of internet users is just the first step on a long journey.

The tricky part is getting people to click on them and harnessing the full potential of PPC campaigns. What you have to do in order to make it happen is to target with laser-like precision.

The first thing to do is to establish clear goals for your PPC campaigns. They usually involve a shorter time-frame and narrow intent. Some common objectives are obtaining a certain number of impressions, page visits, and ad clicks, as well as generating leads and conversions.

Upon getting your priorities straight, you must also decide which audience to target.

Advertisers tend to calibrate their campaigns according to multifarious criteria: geo-location, topics, interests, demographics, native language, etc. In the case of remarketing, they narrow the focus down to people who’ve expressed interest in their brand, products, or services.

As for B2B companies, they may want to keep an eye on job titles, skills, brands, etc. The list of possibilities goes on.

The Key to Success

Furthermore, it’s always a good idea to identify commonalities between audience members.

The same goes for assembling and assessing buyer personas— semi-fictional profiles of your ideal customers. The higher the relevance of ads is the better reception they’re going to find.

Moreover, you want to leverage the option to group ads together. This move can pay dividends provided you also segment the audience smartly.

Once that is sorted out, start writing killer ad copy that speaks the language that resonates with the audience.

Then, proceed to select the right keywords that will trigger ad deployment. In other words, stick to phrases your potential customers are likely to browse.

Keywords should be two things: high-volume and industry-specific. But, know things are ever set in stone. You’ll have to grow and revamp your list over time to stay abreast of shifting requirements.

Oh, and take advantage of amazing keyword research tools in the league of Keyword Planner. There are also premium packages for businesses willing to allocate some funds.

Ways of Capitalizing on PPC

While crafting ad campaigns, never lose sight of the user experience (UX).

Avoid putting people off by selling too aggressively or pitching the wrong products/services. Success hinges on your ability to solve problems and cater to real wants and needs.

Bear in mind it’s also necessary to think about what happens after the click. You can steer use behavior toward favorable outcomes with a direct call-to-action (CTA). If you want to drive traffic to your landing pages, make sure they are well-optimized for conversions and filled with compelling content.

Speaking of which, you should find a way to balance the conversion process with visibility. These two aspects shape the impact of your PPC activities and bring us back to complementary strategies in the league of SEO.

Tracking for Good Measure

In this day and age, “set and forget” mentality doesn’t take you very far.

You’re much better off engaging in ongoing optimization, measurement, and management. These processes are easier to see through when your campaigns are thoughtfully structured ahead of time. But, it goes without saying you must possess sufficient organizational bandwidth to keep up.

Most notably, you need to figure out how to track your activities based on key performance indicators (KPIs). They allow you to uncover both inefficiencies and efficiencies.

So, use them to closely monitor the activity and traffic stemming from your PPC ads. Discover top-performing ads, as well as those that are falling shy of set goals.  Put together a list of ads in need of rework and optimization.

You might have to pause or cancel some expensive ads in order to conserve resources.

As you can see, PPC is a demanding, time-consuming endeavor. There are so many moving parts that need to fall together in a seamless fashion.

On a brighter note, you can always go down the outsourcing path.

You basically let professionals do the heavy lifting and you focus on what you do the best. Done right, this approach maximizes the return on investment (ROI) and propels you toward your goals.

It’s a clear win-win!

PPC Your Way to Online Greatness

PPC is gaining traction left and right and spending is on the rise across industries.

But, you shouldn’t rush jumping on the bandwagon before testing the waters first. This tactic is fairly easy to implement, but difficult to master.

Deployment, in particular, is a complex process that calls for the good management and constant optimization. Simply casting the widest possible net doesn’t cut it, especially in terms of cost-effectiveness.

So, understand how does pay per click work and how it fits the big picture, your overall digital marketing strategy. Assess the level of competition and validate your own ideas.

Determine a budget, choose the advertising platform, and aim at a specific target audience. Cherry-pick your keywords and polish the copy. Measure the factors that play into your success and optimize accordingly.

Get in touch with us if you require help implementing SEO into your marketing stack. It’s time to kick your game into overdrive and reach customers it matters the most.