Pay-Per-Click (PPC) Online Marketing Explained

Pay-per-click (PPC) is one of the fastest growing online marketing tools used by advertisers, and is only predicted to keep increasing. In fact, according to the 2015 Internet Revenue Report, released December 2015, by the Interactive Advertising Bureau and PricewaterhouseCoopers LLP, internet marketing revenue has reached an all-time high of $15 billion in the third quarter of 2015. Essentially, this figure confirms that marketers are confident, now more than ever, in using this tool as a means of effectively reaching consumers.

What is pay-per-click (PPC) marketing?

Pay-per-click (PPC) marketing, also referred to as search engine marketing (SEM), is a paid internet-based digital marketing tool. PPC marketing utilizes various search engines (e.g. Google, Bing, Yahoo!, etc.), advertising network partners and content sites to generate user awareness, visits, sales or various other desired user actions via paid links to your site, called sponsored ads.  Essentially, PPC marketing is a method of “buying” user visits to your site.

The three main benefits of PPC marketing include:

  • High-quality targeting: PPC marketing allows businesses to reach higher quality users in niche markets quickly and effectively, by targeting users who are actually interested in and/or are actively seeking your particular product or service.
  • Maximum ROAS: PPC advertisers pay only for the clicks or impressions their ads receive, allowing for tight cost control and maximum return on advertising spend (ROAS).
  • Customization: Since ads are served based on keywords or themes, each marketing campaign or ad group can be customized to appeal to the optimal buyer with any number of unique marketing messages.

 

How PPC Marketing Works

PPC marketing uses online marketing platforms, such as Google AdWords, Bing Ads or Yahoo! Gemini, to bring targeted traffic to a web site by creating ads based on search keywords related to its business, service or product.

Essentially, when a user enters a keyword query into a search engine (e.g. Google, Yahoo! or Bing), the query is instantly matched to a relevant keyword list from paying competitors, and their sponsored ad is displayed atop organic results.

The position of the ad and actual cost-per-click (CPC) is determined by a private auction, which occurs instantaneously, thousands of times per day, with the help of special online marketing algorithms. These algorithms are similar across all PPC marketing platforms.

The position of your ad in the auction is determined by ad rank; ad rank is determined by two main factors: CPC bid and quality score (QS). The higher your CPC bid and QS, the higher your ad rank.

Optimizing your Ad Rank in PPC Marketing

As discussed, the higher your CPC bid and quality score, the higher your ad rank will be. This means, you will have a higher ad position, out-ranking your competitors. By optimizing quality score, you can actually lower the CPC bid required to compete successfully in the ad auction.

Below are parameters any good online advertiser should optimize in order to increase quality score and decrease PPC marketing costs:

  1. Ad relevance: Do the keywords that trigger your ad represent your business and the type of customer you seek? Does the ad accurately reflect the theme and offering of your landing page? Do your ads and landing pages contain the keywords included in your PPC marketing platform?
     
  2. Landing page relevance: How relevant, transparent and easy-to-navigate is you landing page? Do you have any IT issues on your landing page?
     
  3. Performance history: How long and how successfully has the keyword triggering the ad been running in your account? Typically, longer running accounts with good performance history have an advantage over newer accounts with no or little performance history.

Interested in PPC marketing?  Contact us today to discuss how we can help your business succeed!

Sami Lipman