Pay-Per-Click Advertising

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Our specialist team will work closely with you to implement a pay per click advertising strategy to identify where your most valuable customers are searching or browsing online and ensure your product and unique selling propositions are seen.

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What Is Pay-Per-Click Advertising?

PPC is an online advertising model in which advertisers pay each time a user clicks on one of their online ads.

There are different PPC ads, but one of the most common types is the paid search ad. These ads appear when people search for things online using a search engine like Google, especially when performing commercial searches, meaning that they’re looking for something to buy. This could be anything from a mobile search (someone looking for “pizza near me” on their phone) to a local service search (someone looking for a dentist or a plumber in their area) to someone shopping for a gift (“Mother’s Day flowers”) or a high-end item like enterprise software. All of these searches trigger pay-per-click ads.

In pay-per-click advertising, businesses running ads are only charged when a user clicks on their ad, hence the name “pay-per-click.”

Other forms of PPC advertising include display advertising (typically, serving banner ads) and remarketing.

How Does Pay-Per-Click Advertising Work?

For ads to appear alongside the results on a search engine (commonly referred to as a Search Engine Results Page, or SERP), advertisers cannot simply pay more to ensure that their ads appear more prominently than their competitor’s ads. Instead, ads are subject to what is known as the Ad Auction, an entirely automated process that Google and other major search engines use to determine the relevance and validity of advertisements that appear on their SERPs.

How Keywords Work in Pay-Per-Click Advertising

As its name implies, the Ad Auction is a bidding system. This means advertisers must bid on the terms they want to “trigger,” or display, their ads. These terms are known as keywords.

Say, for example, that your business specializes in camping equipment. A user wanting to purchase a new tent, sleeping bag, or portable stove might enter the keyword “camping equipment” into a search engine to find retailers offering these items.

When the user submits their search query, the search engine performs complex algorithmic calculations based on the Ad Auction. This determines which ads are displayed, in which order, and by which advertiser.

Since you have to pay for each click on your ads, it’s imperative to only bid on keywords relevant to your business, so you can be sure to get ROI from your ad spend. A keyword tool can help you find the right keywords to bid on that are likely to drive sales or conversions and are not prohibitively expensive.

How to Optimize Your Pay-Per-Click Ads

Pay-per-click marketing can be a very cost-effective way to drive traffic to your website and grow your business. But it takes time and effort to do it right. Several factors can affect your PPC costs, including:

  • The relevance of the keywords you choose to bid on – Are they the search terms your best audience is using to find products they want to buy or solutions to their problems?
  • The quality of your ads and landing pages – Google awards the best ad placements and the lowest costs to businesses that provide a good consumer experience. Your click-through rate, or CTR, is a good indication of whether or not your ad creative is resonating with people.
  • A solid account structure – Your PPC account is like a house. Everything needs to be built on a solid foundation. Learn more about effective account structure in this guide.

There is a lot to think about when keeping your PPC ads and campaigns in top shape. Check out PPC University if you’re ready to learn more about how it all works.

Get Help with Your Pay-Per-Click Advertising Campaigns

That’s pay-per-click marketing in a nutshell. But while the basics of pay-per-click advertising are simple, managing a successfully paid search account can be anything but (especially if you’re a small business owner or you’re working with a small budget).

Growth can’t wait, so if you need a little help with your PPC ads, check out the free Google Ads Performance Grader. You’ll get an instant report card that evaluates your performance against competitors and makes straightforward suggestions to help you get better results.

How the PPC Model Works

The pay-per-click model is primarily based on keywords. For example, in search engines, online ads (also known as sponsored links) only appear when someone searches a keyword related to the product or service being advertised. Therefore, companies that rely on pay-per-click advertising models research and analyze the keywords most applicable to their products or services. Investing in relevant keywords can result in more clicks and, eventually, higher profits.

The PPC model is considered to be beneficial for both advertisers and publishers. For advertisers, the model is advantageous because it provides an opportunity to advertise products or services to a specific audience who is actively searching for related content. In addition, a well-designed PPC advertising campaign allows an advertiser to save a substantial amount of money as the value of each visit (click) from a potential customer exceeds the cost of the click paid to a publisher.

For publishers, the pay-per-click model provides a primary revenue stream. Think about Google and Facebook, which offer free services to their customers (free web searches and social networking). Online companies can monetize their free products using online advertising, particularly the PPC model.

Pay-Per-Click Models

Commonly, pay-per-click advertising rates are determined using the flat-rate model or the bid-based model.

1. Flat-rate model

In the flat rate pay-per-click model, an advertiser pays a publisher a fixed fee for each click. Publishers generally keep a list of different PPC rates that apply to other website areas. Note that publishers usually are open to negotiations regarding the price. A publisher is likely to lower the fixed price if an advertiser offers a long-term or a high-value contract.

2. Bid-based model

In the bid-based model, each advertiser makes a bid with a maximum amount of money they are willing to pay for an advertising spot. Then, a publisher undertakes an auction using automated tools. An auction is run whenever a visitor triggers the ad spot.

Note that the winner of an auction is generally determined by the rank, not the total amount, of money offered. The class considers both the number of funds provided and the quality of the content provided by an advertiser. Thus, the relevance of the content is as important as the bid.

Main Platforms

Google Ads

Run-on Google, Search Partner sites, and Display Network sites, Google Ads is the largest pay-per-click platform. Google Ads was launched in October 2000 and has gone through several iterations over the last 17 years. Google Ads is geared toward the entire spectrum of companies, from small businesses to Fortune 500.

Microsoft Advertising

Similar to Google Ads, Microsoft Advertising is a pay-per-click platform showing ads on the Microsoft and Yahoo networks. The platform also utilizes Search Partners. Microsoft Advertising is primarily keyword-based advertising. As of 2017, Microsoft Advertising has 137 million unique desktop searchers on the Bing Network*.

Account Structure

Campaigns and Ad Groups

Advertisers begin by choosing keyword themes and creating individual campaigns. For example, a PPC professional may create a campaign with “Coffee Tables.” Within this campaign are themed subcategories, called ad groups. These ad groups may include:

Oval Coffee Tables
Long Coffee Tables
Round Coffee Tables

Each ad group then contains themed keyword variations. For example, the “Oval Coffee Tables” ad group may have these keywords:

Oval coffee tables
Coffee tables oval
Oval coffee tables on sale

Keywords

Every keyword must be assigned a match type, which defines the queries for which ads will show. There are seven keyword match types:

Exact – Query must be typed in exactly

Exact (Close Variant) – Query must be typed in exactly but can include misspellings or other variants

Phrase – Query must be typed in the correct order, even if there are additional terms before or after the query

Phrase (Close Variant) – Query must be typed correctly, even if there are additional terms before or after the query. The query can include misspellings or other variants.

Broad – Query can be typed in any order and will potentially show ads for similar searches

Modified Broad – Query can be typed in any order but must include terms that contain a plus sign

Broad (Session-Based) – A form of broad match that takes into account other queries from that user’s search session

Negative Keywords

Along with the favorable terms, negative keywords can be added to help remove unqualified traffic. For example, someone who searches for a “free coffee table” isn’t looking to buy. By adding “free” as a negative keyword, the advertiser’s ad will not show when a query containing this term is typed. For a company selling high-end products, “bargain” or “cheap” related terms may make good negative keywords.

Audiences

Audiences are groups of users segmented in a variety of ways. Most often audiences are used in remarketing. Audiences can be created based upon specific pageviews, time spent on site, pages per visit, and more. Similar to keywords, audiences are bid upon based on relevance. For example, advertisers may bid more to remarket to shopping cart abandoners vs. homepage viewers.

Ad Copy

Expanded Text Ads

Once ad groups are created, and the keywords are chosen, they can write ads. Ads should include the targeted keyword theme, value propositions, and a call to action.

Google Ads text ad structure and character limits are as follows:

Headline 1 – Up to 30 characters (including spaces)
Headline 2 – Up to 30 characters (including spaces)
Description Line – Up to 80 characters (including spaces)
Path 1 – Up to 15 characters
Path 2 – Up to 15 characters

Ads cannot contain excessive capitalization, punctuation, or misleading statements. Keep in mind that the display URL will combine the root of the final URL with Path 1 and Path 2.

It should note that Expanded Text Ads replaced traditional Text Ads in both Microsoft and Google. While still currently eligible to serve within Google Ads, advertisers can no longer create new variations of the standard ad format. This consisted of a 25 character headline and a pair of 35 character description lines for reference.

Every ad group should contain at least two ads for testing purposes. Here is an example of an “oval coffee tables” ad:

You’ll write one version of the ad copy that will be automatically formatted for both desktop and mobile. When writing your copy, be aware that it will show on both desktop and mobile, and make sure the document works well on both formats.

Upon clicking, it should take visitors to a page that continues the ad messaging. This is called the landing page, and it should contain a selection of oval coffee tables with messaging around free shipping.

Product Listing Ads (PLAs)

Product Listing Ads are square units used in eCommerce PPC campaigns that contain product titles, images, and prices.
PLAs utilize Google product feeds and must be connected to a Google Merchant Center account. Microsoft Advertising contains a similar feature called Product Ads that also requires a Bing Merchant Center account.

Image Ads

Advertisers can run Display Network campaigns that utilize image ads. These ad units show within and around the content of millions of sites across the Display Network. You can choose to create a responsive ad that will automatically adjust the size depending on where it is shown or utilize the 19 standard image sizes below.

  • 200 x 200
  • 240 x 400
  • 250 x 250
  • 250 x 360
  • 300 x 250
  • 336 x 280
  • 580 x 400
  • 120 x 600
  • 160 x 600
  • 300 x 600
  • 300 x 1050
  • 468 x 60
  • 728 x 90
  • 930 x 180
  • 970 x 90
  • 970 x 250
  • 980 x 120
  • 320 x 50
  • 320 x 100

Settings

Campaign Types

Search Network – This is the most common targeting option. The Search Network consists of google.com and Google’s Search Partners such as aol.com, amazon.com, and many more. The Search Network is primarily keyword-based advertising. In other words, searchers type in queries for which ads are shown.

Display Network – This network consists of millions of sites that agree to show Google text, image, and video ads. These ads are shown within the site’s content and don’t utilize traditional keyword-based targeting but instead audiences and demographics. For example, a user may visit a blog that speaks to the history of coffee tables. Even though the user isn’t necessarily buying mode, the content is relevant to coffee tables. The user may or may not click the ad but is ultimately now aware of the brand.

Search Network with Display Opt-In – This targeting option combines both networks. The new Google Ads experience replaced Search Network with Display Select. Now you’ll create a regular Search Network campaign and opt-in to the Display Network. The caveat is that Google determines when and where ads may perform best, taking control away from the advertiser. The preferred option is to break out campaigns by the network, but Search with Display Opt-In is worth testing.

Shopping: Product Listing Ads – PLAs are shown on Google and Microsoft. After submitting a product feed to Google Merchant Center, can create Shopping campaigns in Google Ads. Advertisers create product groups to which they can bid on various feed attributes. These attributes include:

  • Brand
  • Category
  • Condition
  • Item ID
  • Product Type
  • Custom Attributes

Shopping campaigns do not contain keywords. Both search engines match user queries to the product they deem most relevant. Thus, it is essential to ensure all products have accurate information and clear titles and descriptions.

Device Targeting

Ads can be shown across all devices, including:

  • Desktops/Laptops
  • Tablets
  • Mobile Devices

The search engines consider desktops/laptops and tablets similar enough that the same bid applied to these platforms. Mobile devices can have a bid modifier. For example, if the request is $1.00 and the mobile bid modifier to -50%, the bid on mobile devices becomes $0.50. A bid modifier of 150% would place the mobile bid at $1.50.

Location Targeting

PPC targeting is highly granular, going down to the zip code level. Advertisers have many options to ensure that their ads show only in desired locations. The example below showcases a campaign only targeting Iowa.

Ad Scheduling

Advertisers can run ads only at desired times. Whereas an eCommerce campaign may run ads 24/7, a brick-and-mortar store may only show ads during business hours. Ad scheduling allows easy management of when ads will show.

Also, just like device and location, we can set bid modifiers for both days and hours. For example, weekends may drive more revenue so that bids could be 20% higher on Saturdays and Sundays. Or, poor quality traffic comes in from midnight to 4 AM, so that the modifier might be -80%.

Budget

Each campaign is allowed a daily budget. Should create Budgets by the account of goals.

Delivery Method

There are two options for which ads are standard and accelerated. The traditional delivery method shows ads evenly throughout the day. This option is suitable for advertisers who may have budget restrictions and ensure their ads show throughout the day. Depending on the budget concerns, ads will not show at all times. The accelerated delivery method shows ads until the budget. This option is best for advertisers who may not have budget restrictions and want to ensure their ads show for every query.

Ad Delivery

There are two options for which Google will deliver your ads:

Optimize – Delivery upon ads expected to produce higher click volume.

Rotate indefinitely – Ads are delivered more evenly into the ad auction, but they are toward any goal like clicks or conversions.

Technical PPC

Conversion Tracking

Advertisers can create conversion goals to gauge account performance. Both platforms provide code snippets on critical pages— generally, order confirmation or thank you pages. Advertisers can determine whether ad clicks are turning into conversions.

Google Ads allows many types of conversion tracking, including:

  • Webpage
  • Mobile or tablet app
  • Calls from ads using call extensions
  • Calls to a Google forwarding number on your website
  • Clicks on a number on your mobile website
  • Imported goals (from third-party platforms like Salesforce)

Google Analytics

Google Ads accounts can link to Google Analytics accounts to provide information on post-click behavior. It is highly recommended that these accounts be connected to get a complete picture of the conversion funnel. To link the funds, you must enter the Google Ads ID number in the “Admin” section of Google Analytics.

Once added, the connection can confirm by navigating to “Account Settings” and then “Linked accounts.” The “View details” section will show the link.

The account can also link to Webmaster Tools, which will show how ads and organic listings perform.

Google Merchant Center

In order to run Google Shopping campaigns, or PLAs, the Google Merchant Center account must connect to Google Ads. Similar to Google Analytics, the Google Ads ID must enter into the “Settings” section of the Merchant Center account.

Once connected, Merchant Center account information will show within the “Tools” section in Google Ads.

Remarketing

Setting up Google remarketing code is a relatively simple process. Within the Shared Library is the remarketing tag.

The code needs to be copied and placed on every site page before the closing </body> tag. The code can then validate by going back into the Shared Library.

Conclusion

This guide gives you a great start in the world of PPC. It touches on everything you’ll need to start or get into soon after launching your PPC accounts. However, the unofficial motto of the PPC world is “always be testing.” Make sure that you test different features and strategies for your account. Every account is unique and will react to additional features and strategies. Of course, standard practices exist to work the best for most accounts, but you’ll never know until you test.

Frequently Asked Questions

PPC is the acronym for pay-per-click. It’s a digital marketing tactic, and it buys web traffic to your website. You, the advertiser, pay a small fee each time one of your ads by a user. Search engine advertising is the most popular form of PPC. However, many other platforms, such as social media giants Facebook, now offer PPC ad models. You can promote your company in search results, on websites, and across social media platforms. PPC ads can feature text, images, and video.

Ads in search results meet a specific audience and often earn almost half of all page clicks. Users who click on paid ads are usually ready to make a decision and, therefore, more likely to buy a product or service by comparison to an organic visitor. With PPC ads, your ads are targeted at the online users searching for your type of business. It can make a significant impact on your bottom line.

The cost of running a PPC ad campaign varies. Different cost factors include your industry type, business type, and business size. These will influence the pricing of your PPC ad campaign. Pricing can also be affected by the kind of strategy you’re rolling out. However, expect to spend up to $5,000 per month for a small-to-medium company. This price includes your ad spend and professional services from your chosen PPC agency.

Your PPC costs must be calculated based on your bid, targeting, and ad quality. The amount of money you’re willing to spend for a user to click on your ad is called your bid. You enter your bid into an ad auction, and the highest bidder wins, so you could end up paying less than your bid amount, but never more. Targeting factors include all aspects of your goal, from the keywords you’re ranking for to your audience’s demographics. The more competitive you want to target, the higher the costs. For instance, bidding on a very competitive keyword costs more because it features a higher cost-per-click (CPC). Google also monitors the quality of your ads. If your ad quality is high, you can often maintain lower costs because Google will rank your ad ahead of competitors with low-quality ads. Understanding and accounting for all of these factors are how you determine your PPC budget.

PPC is a flexible online advertising method that lets you create a budget and adjust it at any time necessary. Most importantly, you can target your ideal audience directly, which is impossible with traditional advertising or digital marketing campaigns. The insights gleaned from the data tracked from PPC campaigns is invaluable because it gives you a better idea of your users’ behavior. Your paid advertising campaigns appear ahead of all organic results in search results, helping you to instantly outrank your competitors and support your search engine optimization (SEO) efforts.

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