If you’ve looked into digital marketing services, you’ve probably come across the term ‘PPC’ at some point. Just as likely, you’ve probably also noticed that when you use a search engine to look for something online, sometimes the first few results (and some to the right of the main list) have the word ‘Ad’ next to them.

The two things are closely related, part of what gets called paid-for search - or, in other words, advertising on a search engine.

PPC stands for ‘pay-per-click,’ which describes the most common billing mechanism used in paid-for search. Instead of buying the space at the top of a list of search results - which is what you do if you run an ad in, say, a magazine or on other types of web page - you pay for the number of times your advertisement is clicked.

This has a number of benefits. Search engines like Google and Bing have taken a conscious decision to avoid banner or display ads with branding and images supplied by the customer. They want their ads to maintain the look and feel of ‘organic’ search results.

The trade-off for customers is, you only pay for the results your ad generates - the traffic you get when someone clicks it to access your website.

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How does PPC work?

Paid-for search matches advertisements to keywords or search terms used to carry out web searches. In this sense, there’s not much difference with how ordinary, non-paid-for search works.

Let’s look at an example. If someone types ‘Plumbers near Knutsford’ into a search engine, they will get a list of ‘organic’ results for web pages the search bots have decided are most relevant. They may also see some ads at the top and to the right. The difference is that the companies listed in the ads will have paid to appear when the keywords ‘plumbers’ and ‘Knutsford’ are used.

With PPC, there is no fixed pricing per click or per keyword. Instead, in paid search services like Google’s AdWords, customers bid how much they are prepared to pay per click for the search terms they want their ad to appear for.

Imagine there are five plumbers based not far from Knutsford who want to advertise on Google. They all bid for the search terms ‘plumbers’ and ‘Knutsford’. Three of the companies have their ads displayed, leaving the other two disappointed. The simple reason is that PPC bidding is competitive. The highest bidders for a search term have their ads displayed, everyone else misses out.

This can make PPC bidding an inexact science. How do you know what the going rate for your keyword is, and how do you know if you have been outbid? The rule of thumb is that the more obvious and straightforward a search term is, the higher the PPC rate is likely to be, as you are bound to have more people bidding on it. 

You can also use tools such as Google’s Keyword Planner, which will tell you how popular a particular search term is with other advertisers, as well as an indication of current market price.

On the plus side, PPC allows brands to build very flexible advertising campaigns which, if managed correctly, can be very efficient in terms of ROI. Advertisers will be asked to allocate a budget for a paid search campaign - once this limit is reached, no more ads will be run, so there is no risk of overspend. Every penny allocated is spent on a click to your website, so brings a tangible result.

Within this budget, you can bid on as many or as few search terms as you like. You might prefer to focus on a small number of very specific terms, aiming for a steady drip-drip of traffic over an extended period as you carefully ensure you are always bidding highest on those keywords.

Alternatively, you might choose to bid on a large number of search terms, and hope to generate a high volume of traffic in a short period of time.

Both approaches are perfectly valid with PPC. If you’d like to find out more, why not get in touch with our digital marketing team to run through your options?

Written by Emma Puzylo March of 2018