Pay-Per-Click Advertising: What Is PPC & How Does It Work?
If you have ever noticed the advertisements that appear alongside search results on Google and other search engines, you are already familiar with pay-per-click, or PPC advertising.
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 types of 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 they are 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 actually 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?
In order 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 that 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.
At the moment the user submits their search query, the search engine performs the complex algorithmic calculations that the Ad Auction is based upon. 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 that are 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 both likely to drive sales or conversions, and are not prohibitively expensive.
WordStream: Actionable Insight into Your Pay-Per-Click Advertising Campaigns
There you have it! Pay-per-click, explained.
Although the basics of pay-per-click advertising are simple, managing a successful paid search account can be anything but. Many advertisers simply cannot devote the time and effort required to stay abreast of developments to Google AdWords and Bing Ads, and many are missing valuable opportunities to grow their business through PPC.
WordStream can help.
Our suite of free tools, as well as our trusted WordStream Advisor software platform, demystify pay-per-click advertising management and allow you to focus on what really matters – growing your business and helping your customers. WordStream’s tools can help you every step of the way, whether you’re an experienced PPC advertiser or are new to the world of paid search.
WordStream’s free search marketing tools connect securely to your Google AdWords and Bing Ads accounts, enabling you to see, at a glance, a wealth of data from your campaigns that would be otherwise difficult to access in one centralized location. Based on this data, you can take steps to optimize your AdWords and Bing Ads campaigns to increase conversions, maximize return on investment, and grow your business.
We can provide insight into actionable data, including:
- Keywords, including top-performing search terms
- Negative keywords that can save you money
- Ad performance information
- Bid optimization suggestions
Check out this guide full of best practices & tips to getting started with Google Ads.
Master Pay-Per-Click Advertising with WordStream Advisor
WordStream Advisor takes the headache out of pay-per-click advertising. With the 20-Minute PPC Work Week system, you can discover new opportunities, optimize your account, and adjust your ad spend to align with your paid search goals.
WordStream Advisor’s automated alerts will notify you of areas in which immediate action can be taken to yield better results, and make suggestions on which areas of your account can be improved. WordStream Advisor will allow you to:
- Discover new keywords
- Create logically organized ad groups
- Identify negative keywords that could be wasting your ad budget
- Improve your ad copy
- Create compelling, relevant landing pages
WordStream is a pay-per-click advertising agency that can help you achieve your pay-per-click advertising goals. To find out how, try our free AdWords Performance Grader Plus to assess the strength of your AdWords account, or get access to a free trial of WordStream Advisor and discover how much easier paid search can be.
Our software and services help businesses and agencies take the guesswork out of pay-per-click advertising so you get more from your marketing budget.