What is Pay-Per-Click (PPC) Advertising?
To understand pay-per-click (PPC) advertising, search engines like Google help you find information online by indexing, analysing, and ranking content and pages from millions of websites. Websites compete to rank in the top spots on search results for queries by creating the best content, user experience, and online reputation. This time-consuming process is called Search Engine Optimisation, and the prize for top-ranking websites is organic traffic (free users visiting their websites).
Since ranking organically is a time-consuming and resource-intensive process. For this reason, search engines created a pay-to-play advertising model. Websites can purchase top spots on search engines like Google and Bing using a pay-per-click model. This approach almost guarantees instant website traffic and, if executed correctly, a substantial return on investment. In this article, we will examine PPC advertising and its application.
PPC is the acronym for pay-per-click, which refers to paying a fee to search engines every time someone clicks on an ad and navigates to your website. Â
Table of Contents:
Types of PPC Channels
Pay-per-click advertising can occur in several ways. The easiest to understand is when someone clicks on your sponsored search result when looking for something on a search engine. Another way this could work is by advertising on display networks or shopping ads.
On Google, campaign types like Performance Max and Demand Gen allow you to target multiple ad networks simultaneously. Using these campaign types allows your ads to be shown across Google Search, YouTube, Display and more, all using the same budget.
How are PPC Campaigns Created
PPC campaign setup happens on online accounts you create with ad platforms such as Google Ads and Microsoft Advertising. This process is entirely user-driven, with little support from the platforms themselves. Setting up PPC campaigns can come with a steep learning curve, and making mistakes can become costly.
Each platform has different campaign objectives to select. Each of these objectives has its way of tailoring the advertising experience to specific goals and settings for a campaign. Some of the most popular objectives are Sales and leads. These options usually drive website traffic to complete a specific conversion objective like a purchase or filling out an online form.
Below are some examples of the options available on Google Ads.
Platforms also have different campaign types to select from. These are generally split between the available advertising inventory available. When selecting your campaign type, you tell the platform which of these inventories your ad should appear on. Examples are Search campaigns (search engine marketing) and Display campaigns (banner ads on websites).
Below are some examples of the campaign types available on Google Ads.
The above is just the tip of the campaign setup iceberg. There are many more factors to consider, including budget, bid strategies, ad schedules, location targeting, keywords and negative keywords, and more. If this all sounds overwelling, this is where a PPC Agency like ADdictive can help.
How Much PPC Advertising Cost
The cost per click could range from a few pence to several pounds. The keywords you target are what drive the cost in PPC. When someone searches, for example, “financial advisor near me,” search engines create an auction between advertisers who have indicated an interest in that specific keyword.
It takes microseconds for this auction to get resolved, and it’s all driven by algorithms with no human involvement. Ultimately, search engines allocate the top four spots, above the organic results, to the auction’s winners, ranking them from first to fourth according to the highest bids they place. The beauty of pay-per-click advertising is that you only pay when a user actively clicks the ad and navigates to your website.
If you decide to outsource your PPC Management to an agency, freelancer, or consultant, there will usually be additional management fees that you will need to include. Read our How Much Do PPC Agencies Charge article for more about agencies’ fees.
How PPC Campaigns are Managed
PPC campaigns can be managed in-house or by a third-party agency, consultant, freelancer or partner. For example, platforms like Google and Bing will provide an entirely user-driven service without offering you any direct PPC management services. These platforms have dedicated partner agencies that you can approach, but the scope and cost of their service will need to be agreed on independently.
Campaign and Ads Set-up
During your PPC campaign, platforms like Google Ads can bill you differently.
The most common is through a credit card. Typically, you reach a spend threshold that triggers a payment from the platform. Initially, your threshold might be small, such as £40, but you receive more leniency after establishing trust with the platform. Â
The second method is through monthly billing. Platforms reserve these credit lines for larger advertisers with a proven track record of making timely payments. At the end of each month, the platform will send you an invoice to pay within the agreed-upon payment term.
Some alternative payment methods include monthly billing through a PPC agency willing to front your media spend. Advertisers can also get vouchers from the platforms for reaching specific spending targets.
How is PPC Advertising Billed
During your PPC campaign, platforms like Google Ads can bill you differently.
The most common is through a credit card. Typically, you reach a spend threshold that triggers a payment from the platform. Initially, your threshold might be small, such as £40, but you receive more leniency after establishing trust with the platform. Â
The second method is through monthly billing. Platforms reserve these credit lines for larger advertisers with a proven track record of making timely payments. At the end of each month, the platform will send you an invoice to pay within the agreed-upon payment term.
Some alternative payment methods include monthly billing through a PPC agency willing to front your media spend. Advertisers can also get vouchers from the platforms for reaching specific spending targets.
Final Thoughts
Pay-per-click (PPC) advertising helps businesses quickly appear on search engines and websites. While building a website to rank naturally (SEO) is essential for long-term success, PPC gives businesses fast results and clear returns on their advertising money.
Understanding the basics of PPC, like how to set up ads, how much it costs, who can manage them, and how billing works, helps businesses make wise choices. PPC campaigns can be tricky to run, so working with expert companies like ADdictive can help companies avoid mistakes, get better results, and make the most of their budgets.
In short, when used correctly, PPC advertising is essential to digital marketing. It helps businesses reach the right people, get more sales or leads, and grow faster.
Derick Turner, Founder of ADdictive Digital
About the Author
After a decade in digital marketing, I’ve observed that many agencies fall short simply because they lack sufficient understanding of their clients’ businesses.
At ADdictive, we take a different approach. We invest the time needed to understand your business, your objectives, and the unique challenges you face, so we can help you navigate them effectively and achieve lasting results.
Derick Turner, Founder of ADdictive Digital
