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Pay-per-click (PPC) advertising is one of the most effective ways to achieve your campaign goals, whether you’re trying to drive traffic to a website, generate leads, or increase sales. To maximize your ad spend, you need to understand how to create and manage an effective PPC campaign. In this guide, I’ll explain how PPC works, explore the different PPC ad types, review major ad platforms, and share some practical tips for setting up and managing your next PPC ad campaign.
What Is Pay-Per-Click (PPC)?
Pay-per-click is a type of digital advertising where advertisers pay for each click on their ads. It’s essentially a way to purchase visits to your website or app, rather than attempting to drive traffic through organic search.
How Does PPC Work?
PPC operates on an auction-based system. Advertisers bid on specific keywords or audience segments. When a user searches for a keyword or content related to a keyword, the ad platform runs an auction to determine which ads to display to the user. Here’s how the PPC auction process might look:
- Keyword targeting: Advertisers select keywords that they wish to target.
- Bid submission: Once the keywords are chosen, advertisers set the maximum amount, or bid, they are willing to pay for a click.
- Ad quality evaluation: The ad platform assesses the relevance and quality of each ad.
- Ad placement: Ads appear based on the combination of the bid amount and quality score.
The beauty of PPC advertising is that if you can create a high quality ad that matches the user’s intent, you can win a higher placement at a lower cost than other advertisers.
Why Is PPC Important?
PPC has several advantages that have made it a critical element of most digital marketing strategies. For starters, PPC ads can generate traffic almost immediately — SEO, while vastly cheaper, can take months to see results. PPC ads also target specific audience segments, which ensures ads are delivered to users looking for specific solutions.
Because PPC ad platforms include in-depth tracking and analytics, you can easily measure return on investment (ROI) by evaluating your cost-per-click (CPC), conversion rates, and return on ad spend (ROAS). Finally, you can quickly scale PPC campaigns up or down, allowing you to tailor them to your business’ specific needs.
What Are the Different Types of PPC Ads?
Search Ads
The most common type of PPC ad is the search ad. These appear on search engine results pages, such as Google SERP, when users enter relevant keywords. Search ads are driven by keyword targeting and are a great way to capture high-intent search traffic.
Display Ads
Display ads are ads that use images, videos, and text to draw viewers. They often include a call to action button and can be placed in different areas of a website, social feed, or app. Display ads also come in various sizes and dimensions, and are excellent for brand awareness and retargeting campaigns because they combine visual appeal with precise audience targeting. Depending on the display ad network, advertisers can opt for a PPC pricing model, as well as CPM (cost per mille), CPA (cost per action), CPL (cost per lead), and more.
Native Ads
Unlike display ads, which are designed to stand out from the surrounding content, native ads blend seamlessly into website or app content, which can make them hard to distinguish as ads. They often appear in-feed on social media posts, online games, or video streaming platforms. Native ads often use a PPC model, which means you’ll only pay when a user clicks on your native ad, and not for impressions. For an idea of their effectiveness, this case study explains how global sportswear giant Adidas successfully boosted its brand awareness using a native ad campaign powered by Taboola.
Shopping Ads
Shopping ads are designed to showcase store names, product images, prices, and descriptions directly on search engines. They’re highly effective for e-commerce businesses looking to drive sales. When it comes to PPC campaigns, the average CPC on Google Shopping ads varies by industry. However, data provided by Mega Digital in 2023 showed that among popular industries, retail had the lowest CPC at $0.85, whereas automotive was $3.11.
The shopping ad below appeared after a search for “New Balance running shoes:”
Common PPC Advertising Platforms
You can run PPC campaigns on a wide range of ad networks, each one offering unique strengths and audiences.
Google Ads
Google Ads is the most well-known PPC platform. Your ads can appear on Google Search, Google Maps, YouTube, Gmail, and the Google Display Network. With more market share than any other ad platform, Google Ads is ideal if you need massive reach across search, YouTube, mobile apps, etc., are in a high-volume market, or are looking to scale quickly.
Bing Ads
Bing Ads, also known as Microsoft Ads, is a cost-effective alternative to Google Ads. While it lacks Google’s market share and reach, it offers a similar interface and less competition, and according to Wordstream, its average CPC rates are 33% lower than Google Ads.
Realize
If you’re looking to expand your reach beyond search and social, you’ll want to consider a performance marketing platform like Realize. The platform allows you to create and target display ad campaigns within minutes, then run them on premium publisher websites with high-intent audiences, such as USA Today, The Weather Channel, NBC, MSN, Business Insider, Bloomberg, and CBS. Realize uses AI and machine learning to target users by intent, rather than just identity, as well as automatically optimizing your PPC campaigns, helping you maximize your ROI.
Facebook Ads (Meta Ads)
Meta Ads run on Facebook, Instagram, Messenger, and the Audience Network, and is one of the most powerful PPC platforms when it comes to targeting, scalability, and A/B testing. You can target users by demographics, interests, and behaviors, and build custom and lookalike audiences. In addition, your PPC campaigns can optimize for traffic, leads, conversions, video views, engagement, app installs, and more.
Amazon Ads
Amazon Ads is ideal for e-commerce PPC advertising within the Amazon ecosystem. Amazon users are already on the site to research or buy specific products, making this a high-intent platform. You can target by keyword, product, product category, or audience segment, e.g., demographics, interests, remarketing, etc. Because purchases happen on Amazon, it’s very easy to measure ad performance.
How to Do Effective PPC Keyword Research
One of the most effective ways to run a PPC campaign is by targeting high-opportunity keywords. It takes a lot of practice and testing, but the better you get at this, the more likely you are to reach the right audience. Here are some best practices to follow:
Brainstorm Ideas
Before you dive into keyword research tools or other data, put yourself in your customer’s shoes. What words or phrases would someone use if they were looking for your product or service? This is all about capturing ideas before you filter or optimize. Sites like Answer The Public can be useful for finding keywords adjacent to your main target.
Use Keyword Tools
Once you’ve built an initial keyword list, leverage keyword tools that can provide you with valuable data on search volume, keyword competition, and cost-per-click. While premium tools like Semrush or Ahrefs are very expensive, there are more reasonably priced options, such as Ubersuggest, as well as free keyword tools, like Google Keyword Planner.
Focus on Intent
Remember that not all keywords are created equal. If your goal is to sell a product or service, you’ll want to prioritize transactional or commercial keywords over informational keywords. For example, if you’re selling tennis rackets, you would rather target “where to buy a tennis racket,” (transactional), or “best beginner tennis racket for women,” (commercial). Keywords such as “how to buy a tennis racket” or “how heavy is a tennis racket” are informational keywords that show little purchase intent.
Identify Negative Keywords
Make sure you use negative keywords in your PPC campaign. This will prevent your ads from being shown for irrelevant search queries, and help you avoid wasting ad spend on low-quality traffic. Using the tennis racket example, if you sell high-quality, new tennis rackets, you might want to include negative keywords like “restring,” “stringing services,” “tennis racket repair,” or “pickleball paddle.”
How to Manage PPC Campaigns
Creating a PPC campaign is just the first step. Once your campaign is live, it’s critical that you manage it effectively. Here are some tips to maximize your ad performance:
Set Clear Goals
Your PPC campaign should have clearly defined goals and KPIs. Is your primary objective to drive website traffic, generate leads, make sales, or get return on ad spend? During the campaign, you can track different metrics, like CPC, CPL, CPA, CTR (click-through-rate) and conversion rates, to assess your ad performance against your goals.
Optimize Your Landing Pages
While it all starts with creating a high-quality ad, the great user experience needs to continue on your landing page. Make sure you’re using high-quality visuals, relevant and compelling messaging, and clear calls to action (CTAs) on your landing pages. Also, ensure your landing page loads quickly, as slow load times can lead to higher bounce rates and wasted ad spend.
Always A/B Test Your Ads
A/B testing refers to the process of comparing two different versions of an ad or landing page to see which one performs better with users, based on your campaign goal. By testing different deadlines, product descriptions, CTAs, or even landing pages, you can improve your campaign performance.
Monitor Your Budget
As you identify your top performing ads and keywords, don’t hesitate to reallocate your campaign budget accordingly. Doing so will lower your CPC and improve the performance of your PPC campaign.
How to Track Your PPC Campaign’s Performance
Effective PPC campaigns depend on your ability to understand the data. By tracking your performance, you can avoid the guesswork and make decisions based on results. Here are some ways to do that:
Track Conversions
The major ad platforms all have conversion tracking capability. Take advantage of these features to see which actions users are taking after they click on your ad. Actions can include a newsletter sign-up, webinar registration, form submission, purchase, and more.
Track Cost Per Click (CPC)
Monitoring your Cost Per Click is crucial for understanding the efficiency of your ad spending. CPC tells you how much you’re paying for each click on your ad. By tracking CPC, you can identify which keywords, ad groups, or campaigns are costing you more or less per click, allowing you to adjust bids and optimize your budget for better returns. A high CPC might indicate strong competition or a need to refine your targeting.
Use Analytics
Tools such as Google Analytics can help you track user behavior when they land on your website. Consider metrics like bounce rates, time on page, time on site, and pages per session.
Evaluate Attribution Models
Attribution models determine which ads or marketing steps helped someone decide to make a purchase or take an action. This helps you understand what step in your campaign worked best. Common attribution models include last-touch, first-touch, linear, and time decay:
- Last-touch attribution: Full credit for the conversion is given to the last action the user took before converting.
- First-touch attribution: Full credit for the conversion is given to the first action the user took before converting. For example, if they clicked on a Google Search ad, then later clicked on a Facebook ad to make the purchase, the Google Search ad would get the credit.
- Linear attribution: Equal credit is shared across all actions. For example, Google Search Ad → Facebook Ad → Email sign-up. All three touchpoints receive equal credit (33%).
- Time decay attribution: The action closest to the conversion gets the most credit, but the other actions still receive some credit.
The best attribution model for your PPC campaign will depend on your campaign goals, and the complexity of the customer journey.
Key Takeaways
PPC advertising offers a powerful way to reach high-intent audiences and drive measurable results while you maintain full control over your ad spend. Focus on choosing the right ad platform for your business goals, targeting high-intent keywords, optimizing your landing pages, and continuously testing your ads. Also, remember to monitor your PPC ad campaign’s performance by tracking conversions and making use of the available data. With time, and by following the right strategy, PPC can help fuel the growth of your business.
Frequently Asked Questions (FAQs)
PPC vs. SEM vs. SEO: What’s the difference?
PPC (pay-per-click) is a form of paid digital advertising where advertisers pay a fee every time an ad is clicked. SEM (search engine marketing) includes both PPC and search engine optimization (SEO), and refers to any marketing effort that involves search engines (Google Ads is a good example). SEO involves optimizing your website for organic, unpaid traffic.
PPC vs. CPC: What Is The Difference?
PPC (Pay-Per-Click) is an advertising model where businesses pay a fee each time a user clicks on their online ad, essentially “buying” website visits rather than earning them organically. CPC (Cost-Per-Click), on the other hand, is a specific metric within the PPC model, representing the actual amount an advertiser pays for each individual click, making it a vital measure for evaluating campaign efficiency and cost.
| Feature | PPC (Pay-Per-Click) | CPC (Cost-Per-Click) |
| Nature | An advertising model or strategy | A specific metric or cost |
| Scope | The overall system of paying for clicks | The actual price paid for each click within that system |
| Role | How you acquire traffic to your website | How much each unit of that traffic costs you |
| Application | Setting up campaigns, choosing platforms, targeting, etc. | Analyzing campaign performance, optimizing bids, managing budget |
What are cost caps?
Cost caps are bidding strategies that help you control your average costs by allowing you to set the amount you’re willing to pay per action or conversion. For example, let’s say you’re using cost cap bidding on Facebook Ads. If your target cost per lead is $10, you can set that as your cost cap. Facebook will then attempt to generate as many leads as possible at or below that amount.
What is targeted reach?
Targeted reach refers to the number of users your ad can reach within a specific audience segment. When using PPC platforms, you can target by location, interests, behavior, and more, increasing the chances of your ad being seen by the right people at the right time.
