Marketing Mondays: What is PPC & How Does It Work?

Acronyms can be confusing. When they’re deployed so frequently that they actually come to envelop the unabbreviated term itself, they can take on a mysterious life of their own. That’s unless you stop to ask the question – what exactly is it? So, when it comes to pay-per-click advertising, now renowned as the admittedly catchy ‘PPC’, it actually pays to know what it is, how it works and, crucially, how it will work for you.

What is PPC? The basic principles

Essentially, PPC is a form of web-based advertising that drives visitors from one place, such as a social media platform, to another – usually the website of the business that placed the advert. Rather than paying a one-off fee to place an advert, like you would in a magazine, you pay a small fee each time somebody clicks on the advertisement. In even simpler terms, it’s a method of ‘buying’ visits to your website, as opposed to growing the number of visitors organically.

If you use Facebook, Twitter, Instagram or any other social media platform, you’re likely to encounter some form of PPC advertising every single day. However, the most frequently used platform in the world for PPC advertising is Google – or, more specifically, Google Ads. When using Google Ads, users place a small “bid” on select keywords in the advertisement (a little more to come on this shortly) and pay an agreed fee each time someone clicks on it.

However, it’s essential to understand how your Google ‘Ad’ works from the point of view of your customers, too. When a person uses Google to conduct a local search for a service or product, they calculate which advert has the highest relevance to the search term, making it Google’s preferred ad. They don’t just compare the ads you’re running, they confirm the ads of every business bidding on a particular keyword or phrase. Google is influenced in its decision by two key factors: 1) how much an advertiser is willing to spend per click, and 2) a quality score based on the perceived relevance of your advert and the page a person will land on after clicking the advert. This brings us nicely on to…

How does PPC work? The complex made clear

First of all, think of how Google Ads works as something of an auction. Whenever a person enters a search term, Google checks the search against keywords that are part of PPC advertisements. Any ads that contain these keywords are ranked as above. How much (or little) you are willing to “bid” to acquire a customer is key, but so is the combined quality of your ad and landing page (usually the page of your website where the potential customer will land).

However, how others have reacted to your ads before is also a factor. If Google has previously suggested your ad, but people have not clicked on it, then Google will believe that your ad is less relevant, and vice versa. This is why a little research on your part, prior to the advertisement being placed, is essential.

At the very least, you’ll need to establish the right keywords for your ad (thankfully, Google Ads can help you with this), and ensure that your landing page is relevant to your advertisement and includes an effective call to action (or CTA – another acronym to familiarise yourself with!).

Finally, it’s important to know about where you can post your ads. Google offers both Display and Search Networks. The Display Network would only see your ad on other websites that make money by promoting Google ads, whereas the more effective Search Network shows your ads across the search engine (i.e., where people are more likely to be searching for the product or service you are offering).

In terms of cost, PPC can be an extremely rewarding form of advertising for businesses. Google will charge a standard fee (your bid), either per impression or click (as agreed with you), and other fees, such as cost per acquisition or cost per 1,000 impressions, can be added with your consent.

However, when using Google Ads for the first time, it’s worth starting with a low bid and seeing how people react. One of the most practical elements of PPC is that you have access to all the analytics of your advertising campaigns, and can tailor each ad you place based on what you learn works and what you now realise doesn’t.