PPC Advertising: An Introduction

September 06, 2017 by BizTraffic Team

Pay Per Click advertising is one of the mainstays of a strong digital marketing campaign.PPC, or Pay-Per-Click, is the standard advertising model on search engines. PPC defines the way you pay for the advertising - each time someone clicks on your ad, you pay the search engine for that traffic.

PPC can be a great way to increase overall brand awareness or create interest in a specific marketing campaign. It’s one of two main ways (along with SEO) that traffic is driven to a website.

You choose keywords associated with your business or product, and each time someone uses one of those keywords, your ad has the chance to appear on the search engine results page (SERP).

When a keyword match is made, an automatic auction process occurs among all ads using those keywords. The auction uses your bid and your website’s Quality Score, decides on an Ad Rank for your ad, compares that rank to other ads, and the ad position and cost are decided on based on each ad’s bid, Quality Score, and Ad Rank.

Sound super complicated? Don’t worry, we’ll introduce you to the basics so you can get started using PPC to enhance your marketing campaigns right away!

Types of PPC Ads

There are two basic types of ads you can run on search engines:

  • Search PPC - where your ads are displayed on a SERP either at the top and bottom of the page or on the right side. The results of the auction determine your placement on the SERP - the better you do in the auction, the higher on the page you will be.
    ADExample1A.png
  • Display PPC - which are ads that appear on website pages. These ads are triggered not by current searches but by search history. If you shop online for winter coats, you’ll see more ads for winter coats on websites you visit later.AdsExample3A.png

Search and display ads are similar, but have distinct differences that should be taken into account when deciding which to use for your ad campaign.

Display ads work better for buyers in the consideration or decision stages of the funnel, while search ads are used to raise brand awareness. The ad you use should be designed with this in mind.

Your business can have an impact on this decision as well. The more popular your keywords are, the more search ads might be right for you. If you have visual ads that really pop, then display ads are a good way to draw attention to your brand.

A combination of search and display ad campaigns is usually a good strategy, depending on the specific needs of your business.

Running a search campaign and a display campaign side by side is recommended if you have the budget. This allows you to take advantage of both network’s strengths while mitigating the weaknesses.

You should not use the same campaign to run both types of ads. If a campaign runs both search and display ads together the data will aggregate, so it will be impossible to get a proper ROI from each method.

Set up individual campaigns to run search and display ads in order to gather the data you need to improve each campaign.

How Much Does PPC Cost?

For the purposes of this blog, we’re going to use Google AdWords, since it’s by far the most popular PPC platform (over 80% of businesses use Google AdWords). PPC cost is based on your and your competitor’s Ad Rank. Ad Rank is determined by two factors:

  • Your maximum bid
  • Your Quality Score

Maximum bid x Quality Score = Ad Rank

Your maximum bid isn’t necessarily what you’ll be paying for each click, it’s just the maximum you could possibly pay. It’s a way for you to set a cap on your PPC expenses.

Your Quality Score is based on a number of factors, including:

  • Your CTR/campaign history
  • The ad’s relevance
  • Your landing page content relevance

The more relevant your landing page and ad content, and the better your keyword selection is, the higher your Quality Score will be.

The Auction Process

CPC1.pngAdWords takes your bid, multiplies it by your Quality Score (a scale of 1-10), and comes up with your Ad Rank. It then tallies the results for all of the ads containing the searched keywords from highest to lowest Ad Rank.

Here’s where it gets a bit complicated.

Your actual cost is dependent on the Ad Rank of the bid beneath yours. Their Ad Rank divided by your Quality Score plus 1¢ is what you pay per click.

If the Ad Rank beneath yours is 12, and your Quality Score is 10, then you pay $1.21 per click. 12/10 = 1.2, so you would pay $1.21 per click (don’t forget to add the extra penny).

The higher your quality score the better, and you want your bid to be as low as possible while still remaining competitive. The more often you do this, the better you will be at knowing how much to bid for certain keywords.

That Seems Pretty Complicated

This is going to seem a bit overwhelming at first, but it will get better over time. The more you do this, the better of an idea you’ll have about how much to bid, what keywords you should use, and how to design your ads.

You should also be optimizing your website for PPC by improving your landing pages, which will help with your Quality Score.

Don’t forget that your CTR is a part of your Quality Score as well, so making improvements in your landing page and ad copy will increase your QS.

This also means that you should use a campaign for as long as possible, since when you start a new campaign your history is erased and all of the improvements you made to increase your CTR are lost.

PPC requires constant monitoring, testing, and refining. Each factor is in constant flux, so you need to be A/B testing everything in order to avoid paying too much for ads that don’t convert.

Is PPC Worth It?

calculator-385506_1920 (1).jpgThe top three spots on a SERP get 46% of the clicks, so if you’re not in the top three your chances of getting a click are almost halved.

Additionally, businesses make $3 for every $1.60 spent, so your ROI is almost 100% with PPC (the previous statement should not be construed as a guarantee - BizTraffic is not responsible for any losses accrued through investment in PPC).

(Data from: http://www.powertraffick.com/ppc-trends-and-statistics)

In addition, Google’s recent changes to the SERP have less space dedicated to organic results above the fold than ever before. With ads taking the first few spots, snippets and cards taking up more space, and with featured snippets dominating the above the fold content, space on a SERP is more valuable than ever.

If you want to maximize the chance that you’ll be on the first page of Google, PPC is your best bet. You should still be using organic and local SEO as well as using schema for snippets, but PPC is a good way to help ensure a first page placement.

Conclusion

PPC can seem complicated and expensive, but the more you do it the easier and cheaper it gets. By using a combination of search and display ads, picking the right keywords, and improving your Ad Rank, you can drive a lot of traffic to your website.

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