What is Pay-Per-Click (PPC)?

As its name suggests, pay-per-click or PPC is an advertising model that charges the advertiser only when an ad secures a click-through. PPC ads can appear on a webpage, with Facebook rapidly becoming one of the most popular advertising venues online, or in search engine results. This latter approach, also known as paid search advertising, allows websites to align themselves with relevant keywords, and to appear above or beside search results for these terms.

The most popular platform for paid search advertising is Google AdWords, which offers cost-per-thousand-impressions and site-targeted advertising in addition to pay-per-click. Advocates of cost-per-impression paid search advertising argue that this route is a branding investment, whereas PPC has greater appeal to those advertisers looking for instant results.

However, PPC advertisers also benefit from ‘investing’ in prime advertising locations. When setting keywords in Google AdWords, PPC managers are given the option of setting a maximum bid. This is the amount they are willing to pay for their ads to be clicked after appearing as a result of that term. For example, a sporting goods website might assign different max CPC values to the terms “football” and “rugby” depending on the goods predicted to bring greatest revenue. The order of ads displayed among search results for any keyword will be determined by the CPC bids for that term.

Making the most of pay-per-click

Selecting the right set of keywords and phrases to be included in an ad group demands strategic thinking. Creating an ad group is the ultimate marketing exercise, and a successful PPC manager is familiar with the consumer thought processes and brand principles relevant to his client. PPC requires a more complex understanding of demographics and market research than traditional advertising because its potential reach is so much greater.

One of the benefits of Google AdWords is its negative keyword functionality. Negative keywords allow PPC managers to specify terms that they do not want associated with specific ads. For example, a website exclusively selling cakes might benefit from identifying ‘cupcakes’ as a negative keyword. Though you may be tempted to drive as much traffic as possible to your website, this is not an efficient marketing strategy every click-through costs money. Skilled grouping of negative keywords with Google AdWords will direct the most beneficial traffic to your website.

Finally, it is important to remember that PPC advertising is a process, not a one-time exercise. A good PPC manager is aware of timing, budget and ad rotation as well as keyword selection.