Pay Per Click: The Basics of PPC Advertising for Modern Businesses

PPC Basics

Pay-per-click is certainly not new and has been around for many years. However, for many businesses, its use is brand new. Below is what you need to know to leverage this tried and true ad platform in order to drive profitable online consumer behavior.

What is PPC?

Pay-per-click, or PPC, is a form of advertising that works somewhat like classified ads, except that the ad platform is entirely online. Search engines, like Google, sell this form of advertising. They empower businesses and individuals to leverage ad space on their search engines and partner websites. These ad listings are generally small and resemble older-style classified ads.

Unlike classified ads, however, businesses that invest in ads do so by bidding on the keywords. The bidding in conjunction with an algorithmically determined “quality score” governs the rank or order the ads appear. The highest bidder with the best quality score generally ends up in the highest spot on the page. However, high bids and low-quality scores don’t necessarily mean top placement. The other bidders appear in rank order according to the same attributes.

The Simplilearn PPC training course delves into how the bidding process works, strategies and logistics of setting up a commercial pay-per-click account, how to budget ad spend, and how to manage campaigns.

Choosing a Network

There are many networks out there, but the two most popular are Google Adwords and Microsoft’s AdCenter.

The rates charged by these companies vary depending on the popularity of the keyword or phrase being bid on. For example, if you sell shoes online, one of your keywords might be Nike – a popular brand of shoes.

To get the first position for that keyword, you would have to have the best combination of bid and quality score versus the other companies bidding against you. Other networks also exist. Even Facebook and Twitter have ad networks that are set up as “pay-per-click” platforms.

The Dangers of PPC

Because PPC networks are generally marketplaces, the laws of supply and demand rule. Marketers can artificially, unknowingly, or purposefully drive up prices on keywords. As a result, businesses can get caught up in bidding wars over keywords, and may end up spending more than the potential return. It’s not uncommon for large brands to do this on purpose just to “own” the exposure at the top of the listing.

It’s not that these brands are trying to drive direct ROI with this approach, necessarily. They are, however, happy to do this in many cases in order to have supremacy on the Search Engine Results Pages (SERPs) while pricing out the competition.

For example, a big shoe retailer might bid $500 on the keyword “Nike,” even if an average pair of Nike shoes only cost $100 to $200. While it’s possible that the lifetime value of a new customer from the campaign could eventually lead to a return on that ad spend; the primary purpose of this strategy is to buy out the top spots for brand exposure while simultaneously pricing out potential competitors.

What You Get Out Of It

The good news is that PPC can generate traffic almost immediately. If you have the budget to spend, there’s nothing quite like a flood of traffic to your site to boost your spirits and spike key performance indicators.

In most cases, you can start getting traffic to your site within minutes of opening an account and bidding on keywords. The immediacy of PPC means you can adjust your ads daily, account for changes in local and national economies, and take advantage of breaking news stories that affect your business or industry.

For example, let’s say a new story covers the benefits of wearing a particular kind of shoe for running. You just happen to sell that shoe. Rather than pay for a new newspaper or magazine ad that you have to wait for, you can adjust your PPC instantly to take advantage of the press coverage while the news is still “hot” and fresh in everyone’s mind.

How to Make It Work For Your Company

Many companies use PPC in order to drive website conversions, not just for clicks and traffic. Up until the end of the last decade, it was common for companies to worry obsessively and exclusively about click-through rates (CTRs). That was what was thought to be important- clicks were considered micro-conversions.

Unfortunately, CTRs alone on the SERPs don’t pay the bills – micro-conversions in the marketing and sales funnel do. In short, using PPC to drive some type of lead acquisition or online purchase is oftentimes the best way to optimize ROI for these types of campaigns.

Armed with the above basics for PPC you are now ready to kick the tires and start launching your first campaigns. While Rome certainly wasn’t built in a day; your first PPC campaign absolutely can be. Optimization, training, and experience will make your campaigns better over time, but everyone has to start somewhere.

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