Pay Per Click is an internet advertising model where advertisers pay publishers every time one of their ads is clicked. Basically, it is a way businesses ‘ buy’ traffic into their website(s) instead of ‘earning’ them organically. Search engine marketing is, so far, the most popular form of PPC.
PPC is way more effective than CPM (cost per mile) as companies only pay for the number of times their ads have been clicked rather than when it has been seen or viewed. It helps you accurately read data, adjust marketing campaigns and assess the effectiveness of such changes.
So, if you’ve heard little to no information about pay-per-click advertising and would like to learn how it works or its pros and cons, this guide contains everything you need to know about this marketing model. Let’s first review the meaning of PPC and then dive deeper; shall we?
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What is Pay Per Click (PPC) Advertising?
Also known as cost per click (CPC), Pay-per-click (PPC) is a digital or online marketing model where marketers or businesses place ads on publishers’ platforms like blogs and YouTube. And then pay every time a visitor clicks their sponsored (ad) link. This model is popular on search engines like Google and Bing and social media platforms like Facebook and Twitter.
One unique thing about pay-per-click advertising is that advertisers only incur costs for the number of clicks their ads get, making it more effective than CPM. So, instead of marketing your website organically, like through SEO and content marketing, you can ‘buy’ website visits.
With search engine advertising, firms bid for keywords related to their offerings for their sponsored links to appear at the top or bottom of the SERPs when users search for the keywords. For instance, when you search for “digital marketing course” on Google, PPC ads from Google, Facebook, and Coursera appear. These companies only pay if one clicks the ads.
How the PPC Model Works
Keywords form the basis of the PPC marketing model. As seen above, online ads (or sponsored links) appear when one searches for keywords related to the marketer’s business offers. Searching for digital or email marketing and getting PPC ads about pet foods is highly unlikely.
Therefore, keyword research is mandatory for companies that rely on pay-per-click advertising to analyze the terms their potential customers search for and bid for those keywords. This way, you’ll receive many clicks from the right audience and, eventually, boost sales.
This marketing model is beneficial for marketers and publishers. Publishers that target high CPC keywords in their content have higher chances of getting high-paying ads, increasing their revenue when users click such ads. Publishers like me can offer content for free and make money online through PPC monetization models, mainly from Google Adsense and Media.net.
This model is equally effective for marketers as users who click their ads and visit their website are more likely to buy or subscribe to their business offers than those who only view their ads and don’t click. When the PPC campaigns are well-targeted, the cost per click paid by the advertiser will be less than the value of each visit (click), saving on advertising costs.
Pay-Per-Click Advertising Models
Marketers usually determine PPC advertising rates using flat-rate or bid-based models.
1. Flat-rate Model
Advertisers using the flat rate PPC model incur a fixed rate per every click. Publishers offer different rates for different areas on their websites. For instance, placing an ad on the header may be way more costly but effective than placing the same ad on a site’s sidebar or footer.
However, most publishers are open to negotiation. They can lower the PPC rate if the advertiser offers a longer-term or high-value contract. But such terms are highly unlikely when using ad networks like Google Ads or Media.net (for Bing and Yahoo search engines).
2. Bid-based Model
In a bid-based PPC, advertises quote the maximum offer they would be willing to pay for an advertising spot in an auction. The publisher then launches auctions using automation. Every time a user triggers the ad spot, an auction and a winning bid ad are displayed.
However, the bid ‘winner’ is determined by the rank, not the bid’s value. In addition to considering the amount of money offered, the rank depends on the quality of the advertiser’s content. This way, relevant ads are shown to visitors, increasing their likelihood of clicking.
Types of Pay Per Click Advertising
You can use different pay or cost-per-click internet marketing options to drive traffic and sales to your website. The common ones include:
1. Search Engine Marketing
Search engine advertising is the most common type of PPC marketing. It is provided by popular search engines like Google (through Google Adwords) and Bing (through Bing Ads). These providers show your ads on the SERPs when users search for the keywords you have bided for.
All you need is to write an excellent ad copy, select the most appropriate keywords that will connect you to the right audience. Then connect the ad to the landing page of your website.
What is Google Ads?
Google Ads is the most popular PPC advertising system globally. This ad platform allows advertisers to create ads to appear on Google search engine results and its other properties. Here’re some ads that appear when you search for digital marketing jobs on Google.
Many businesses have bided for the keyword, but only two ads appeared on the top of SERP. And these companies will only pay if I click their links. After searching for the term the second time, the ads disappeared from the top of the SERPs and appeared at the bottom.
What happens is that every time a search is initiated, Google automatically digs into the pool of advertisers. And then chooses the most appropriate set of ‘winners,’ and displays their ads ad different positions on the SERPs. The winners are selected based on many factors, including the user’s location, quality and relevance of the advertiser’s keyword, and length of the search.
Conducting pay-per-click advertising with Google Ads is worth it because it’s so far the most popular PPC network. Most importantly, according to Semrush, Google is the most visited website by traffic globally across all categories. It had over 79.5 billion visitors in August 2022 alone. Therefore, you can attract many impressions for your ads, not to mention the clicks.
The match type you select and the keyword you bid for affect how often your ads appear on the search results page. However, you can boost the success of your PPC campaigns by:
- Conducting relevant keyword research and optimizing ad text
- Improving the landing page quality to attract a higher conversion rate
- Monitoring your quality score, Google’s rating for keyword relevance and quality, landing pages, and PPC campaigns
- Being creative by crafting enticing ad copies and ad titles
What is Bing PPC?
Like Google, Microsoft also displays PPC ads on its Bing, Yahoo, and AOL search engines. While using Bing campaigns, the ad network distributes your ads or sponsored links across all these platforms. Bing and Yahoo are the second and third most used search engines.
Thus, Bing is a notable marketing tool for paid ad campaigns. It competes with Google Ads.
However, in most cases, Bing’s PPC advertising works almost similarly to Google Ads. You create awesome ad copies and find a list of keywords to target. Then link the ads to a landing page, and launch your ad campaign. And pay every time one clicks your sponsored links.
2. Display Advertising
Display advertising is a marketing model where advertisers market their business offerings, like products and services, through visuals on publishers’ websites. The most common types of display ads include images, videos, or text ads intended for specific types of audiences.
Display ads attract less click-through rate than search engine ads but help build brand awareness. You can run responsive display ads for your products or services with ad networks like Google Display Network. Google Display is a type of campaign offered by Google Ads.
Let’s get practical; here’s a display ad by Google Adsense through Google Ads.
You get the point. The advertiser pays Google every time a visitor clicks the ad above. Then Google pays me 60% of the revenue. That’s how creators afford to publish content for ‘free.’ But with Adsense, in addition to being paid per click, creators are paid per 1000 ad views.
3. Social Media Advertising
Social media marketing is another popular pay-per-click advertising platform for many businesses. Platforms like Facebook, Twitter, and Instagram, which have many monthly users, can help you reach your target audience or increase your followers or sales by running ads.
With social media PPC advertising, you can achieve a higher click-through rate on your website and boost your organic reach. In fact, you can target specific demographics and interests.
4. Retargeting Pay per Click Advertising
Re-targeting PPC marketing helps you target the audience based on their previous online actions, like visiting a page on your website. For instance, with social media marketing, you can target people who reacted to your popular posts and give them an irresistible offer.
This marketing model traces users’ cookies on their browsers. And is effective in email, social media, display, and search engine PPC campaigns. For example, a person who searched for the best hotels in New York can be shown display ads on travel agents’ deals in that area.
Similarly, when a user who has recently searched for where to buy laptops online visits your monetized blog, they are likely to be shown display ads from e-commerce stores like Amazon.
5. Affiliate Marketing
Some affiliate marketers create PPC ads promoting different products and place them on search engines, price comparison websites, targeted content sites, or highly-trafficked sites. However, before you engage in this practice, as a publisher, confirm if such practices violate the affiliate terms & conditions, as most companies using affiliate marketing discourage it.
As a marketer, you can as well create cost-per-action affiliate-based campaigns. And then pay publishers every time a user takes action, like signing up for a free trial. As a publisher, you can search for marketers running PPC affiliate programs and run their display ads on your website.
Alternatively, both publishers and marketers can use affiliate networks like ShareASale.
Pros and Cons of Pay Per Click Advertising
PPC advertising is cost-effective in driving relevant traffic to your landing pages and increasing sales. Here’re some of its benefits and challenges you should consider.
Advantages PPC Advertising
Some of the benefits of running a pay-per-click advertising campaign include:
- This marketing model is cost-effective as you only pay when viewers click your ads, not when they view them. Therefore, it attracts a higher return on investment than CPM models. Not to mention that you can decide to spend as much or as little as you like.
- Free and paid training materials are available online (including this article) on the meaning, and scope of PPC marketing, guiding you in what to do and what to avoid while running ads.
- It is measurable as you can gauge its effectiveness by comparing the number of clicks your ads get and the sales. You can trace then if the clicks translate to profits and adjust your ads.
- PPC advertising helps you drive targeted traffic to your site. It allows you to target an audience based on location, age group, and language, increasing the success rate.
- The PPC model is faster than other models like SEO and content marketing, where getting to the top of the SERPs can take months and more ‘complicated’ activities like link building.
- Lastly, PPC marketing campaigns are customizable. For instance, you can adjust the ad title and content depending on your business offerings’ most searched keyword or keyphrase.
Disadvantages of PPC Advertising
Despite helping your boost your website traffic and brand awareness, PPC advertising has some limitations, including;
- Clicks and visitors do not guarantee sales – you must write convincing content to convert your visitors to customers. Otherwise, your visitors will bounce back after reaching your site.
- Technical skills required – you need to conduct relevant research and understand how PPC advertising work. Alternatively, you can hire a specialist ad agency, which adds to the cost.
- It can be costly – unlike in the SEO technique, where you invest time and skills, you’ll need to allocate a budget for PPC campaigns. And the costs can pile up if you do not monitor the returns on investment to ensure your ads are well-optimized and profitable to your business.
- A targeted audience that uses ad blockers on their browsers will not get your ads, meaning you may miss reaching the targeted audience, especially those using a desktop to browse.
- PPC is a time investment – you can not run the campaigns and leave them. Instead, keep optimizing them, not to mention that people search for different phrases over time.
This pay-per-click advertising guide covers everything you need to know about this marketing model. It covers the meaning of PPC models, how they differ from CPM marketing, how PPC works, and its types, including search, affiliate, and social media PPC marketing.
The article reveals that PPC helps drive targeted traffic to your website, increasing the chances of the visitors converting to customers. For publishers, it gives them the option to earn.
However, this marketing model requires technical skills in understanding how it works and how to evaluate the return on investment. But to avoid this struggle, you can hire ad agencies online.
Let me know if you have any questions on how PPC marketing works. Contact me anytime.