What Is PPC? What It Is & How It Works

Digital marketing. For the business owners and leaders who may not live and breathe it, but who nonetheless need it, it can be a confusing world of endless acronyms. SEO, SERP, CTR, CRO; the list goes on and on.

Today we’ll be adding another abbreviation to the pile… but trust us when we say that this is one of the most important to the ongoing success of your business, no matter its size, shape or industry.

Welcome to the world of pay per click advertising, or PPC.

What is pay per click advertising (PPC)?

First things first: what does PPC advertising mean? What does PPC stand for? 

PPC is short for ‘pay per click’, a form of digital advertising in which a website or platform offers up advertising space, but only charges for it if someone actually clicks on the ad.

While PPC marketing comes in many different forms, including website display ads, remarketing ads, video advertising and sponsored social media posts, the most common form of PPC marketing and advertising is search engine PPC – the ads you see at the top of the Google search engine results page (SERP).

These ads offer an alternative to search engine optimisation (SEO) practises in which you try to organically move up the SERP over the course of months or years. PPC instead gives you the opportunity to pay for top spot.

The ultimate goal of PPC advertising is to direct potential customers to your website or landing page and to drive them toward a purchase. In simple terms, you can think of pay per click advertising as a system of buying website visitors.

What is Google Ads?

Google Ads is perhaps the most common form of PPC advertising. These are the handful of results marked with a small ‘Ad’ label that appear at the top of most Google searches. An advertiser bids on this ad space based on specific search terms relevant to their business, and only pays if someone clicks on their ad.

Google Ads is the leading form of search engine advertising simply because Google holds a search engine market share of over 94% in New Zealand (the next biggest player is Bing, with 3.5%.) As such, when someone talks about search engine advertising, they’re almost always talking about Google Ads. The Google Ads ecosystem actually stretches far beyond the SERP, allowing you to create campaigns that appear across the Google ecosystem.

While Google Ads might appear simple at first glance, the truth is that almost every business – including your competitors – are now bidding for ad space on the platform, which makes this a highly competitive space.

Creating an effective Google Ads campaign is about being strategic in the way you bid, how much you bid, and what you bid on.

How does PPC work?

All PPC marketing works in approximately the same way – you bid for space, telling the host website or platform the maximum amount you’d be willing to pay per click. If your bid wins, you pay up to that price – though often lower – for every click your ad earns.

But if we are to make the most of PPC marketing, we need a deeper understanding of exactly how it works, the details of which can change from platform to platform. So let’s take a look at the most popular of all platforms: Google Ads.

A Google Ads PPC strategy begins with the identification of keywords – the search terms that your audience is currently typing into Google, and that you want to appear on the SERP for.

For example: If you’re a plumber in Christchurch, you’ll probably want to appear as a result when someone types in ‘Christchurch plumber’. In reality your keyword strategy will be more nuanced than that, and the best are crafted with the help of a PPC marketing company with Google Ads expertise.

Once you have your list of relevant keywords, it’s time to make a bid. At this point you’ll be asked to name the maximum amount you’d be willing to pay to get a click for a search term. Let’s say $3. Google runs an automated, real-time auction, which compares your bid to others. Google not only analyses your bid, but also your ‘Quality Score’, which is their way of measuring how likely it is that your ad will actually get clicked on – remember that Google only earns money if someone clicks.

If your bid wins, you won’t often need to pay your maximum bid, but instead a lower amount figured out by Google based on your quality score and the other bids in the auction (a complex story for another day.) Ultimately, instead of $3, you might pay $2.

Which brings us to one of the most important questions in PPC advertising: how much does PPC cost? Allow us to answer that question with another: how long is a piece of string? The annoying fact is it depends on your product, your competition, your industry, the keywords you target, and a wealth of other factors. That said, we can look at the data to gain an idea of what you might have to pay.

Low value, low quantity keywords can sometimes be secured for a handful of cents. Highly prized keywords like ‘business services’ can average well over $50 per click. The average cost per click, meanwhile, is around the $1-$2 mark.

Now that we know the meaning of PPC and how PPC works, we come to perhaps the most important question of all: why?

What are the benefits of PPC?

The benefits of PPC advertising are many and varied, including immediacy, accessibility, tracking and analysis, affordability and more. In short, there are a lot of good reasons why PPC marketing is one of the most popular forms of digital advertising there is.

Let’s drill down on the benefits mentioned above. A few of the most compelling include:

• Cost-effectiveness: With most clicks costing a couple of dollars or less, and with advertisers granted complete control over the amount they spend through the maximum bid function, your PPC campaign can be as affordable as you’d like, although it’s important to note that you’ll only get out what you put in.
• Get to top position: If you exclusively use SEO tactics, you’ll need to work long and hard to get to the first page of search results (and there’s no guarantee it’ll happen.) If you win the bid, PPC advertising immediately rockets you to top spot.
• Target the right audience: By honing in on specific keywords, you get in front of the right eyes at the right time. The Christchurch plumber mentioned earlier, for example, will get served up to Christchurch residents who are furiously searching for help in the midst of a plumbing emergency.
• Instantly increase your reach: Most other marketing efforts, like SEO, social media, email and content, take time to work. PPC advertising instantly gets your products, services and brand in front of people who are searching for exactly what you’re offering.
• More sales, more growth: Combine all the above together, and when done properly – i.e. with the help of a team like Traction – PPC forms a key ingredient in the recipe for business success. Enjoy increased leads, sales, revenue and business growth.

While it might seem complex – perhaps even intimidating – to those who haven’t dealt in it before, the almost endless benefits of good PPC advertising mean that it forms a key element of any successful business’s digital marketing mix.

Which is where our team comes in.

At Traction we bring the knowledge, skills and expertise you need to capitalise on the endless potential of pay per click advertising (PPC). From Google Ads to remarketing, display to video advertising, we’ll identify and capitalise on the most promising PPC opportunities for your business.

If you’re ready to make the most of the wonderful world of PPC, we’re ready to help. Get in touch today!