How Does Pay Per Click (PPC) Work?

Blog > How Does Pay Per Click (PPC) Work?

We bet that you’ve already heard about pay per click advertising. One of the benefits of PPC is that it can bring in ROI and profit quickly. Applying this powerful marketing strategy is simple and straightforward – it allows you to set up a campaign in just minutes and you are halfway to getting the job done. 

How Does Pay Per Click Work?

Pay per click is an essential business strategy. Learn how it can help your business when you integrate it into your marketing strategy.

The PPC Players

Before you jump on the wagon, make sure you understand how this strategy works so that you can set your expectations. With a thorough understanding of the pay per click process, you’ll have a greater chance of a successful campaign.

PPC Involves Three Main Parties:

1. Advertisers

Advertisers are individuals or businesses that utilize PPC to promote their products and services. 

Every time an internet user clicks on your ad, you are charged by the PPC network. After all, it’s called “pay per click.” The amount you pay per click, which can range from less than a dollar to a hundred dollars or more, depends on your target keywords and the level of competition. The more advertisers compete for a keyword, the higher the cost of the click.

On Google’s search page, there are only limited slots available for ads. This is why advertisers need to step up to secure a slot – a process known as bidding. Read on to know more about how bidding in PPC works.

2. PPC Networks

This is the middle man – they display your advertisements on their network. The most common PPC networks used by advertisers are Google Ads, Facebook Ads, and Microsoft Ads.

 3. Publishers

Publishers are individuals or companies who partner with the PPC networks to display ads on their website(s). This way, they are able to monetize their content. Publishers are used to increase the networks’ display and reach a more diverse and targeted audience.

Most publishers own several websites where ads are shown. Once a visitor of the website clicks on an ad, the publisher receives a percentage of the revenue. Just like the amount paid by the advertiser varies, how much the publisher receives also depends on the keyword and its average bid.

When creating campaigns, advertisers are often given the chance to choose between having their ads shown on the network itself or with their partner publishers. The latter is sometimes preferred as it means you can pay less per click than just advertising on the search engines.

How Bidding Works

Remember the bidding process we mentioned above? Bidding affects the position of your ad and its result.

For every keyword, there are only four ad slots available above the first organic listing. The average bid for a keyword determines the position of your ad on the search page. 

Remember, bidding for the #1 spot is not always worth paying more, because it is still possible for your campaign to be successful even at #4. In a lower position, you still get relevant clicks, but for a lesser cost.

What is Quality Score?

Now, quality score also plays an important role in your cost per click (CPC) and your ad position. Google rates the quality and relevance of your ads. This rating is known as quality score. Whether you will pay a lower or higher CPC depends on your quality score.

To improve your advertising campaign, ensure that your ads have an excellent quality score by using relevant keywords for relevant ads. 

Questions

What is a Paid Click?

When using PPC to drive traffic to your website and promote your products and services, every click you receive is a paid click. This is because you pay a certain amount when a user clicks on one of your ads.

What is the Difference Between CPC and PPC?

Although often used interchangeably, PPC and CPC have different meanings. Pay per click or PPC is the advertising program you run, while cost per click or CPC is the actual amount you pay per click within the program.

How do Companies use Pay Per Click Advertising?

PPC advertising works by paying Google to list and display your ads at the top of the organic search page. When a visitor clicks on your ad, you are charged the current CPC of your campaign. 

Bottom Line  

Many businesses are now tapping into modern technology to up their marketing efforts, and one of the most popular programs they utilise is PPC. So, what is Google PPC Advertising? It is a powerful tool that allows you to create ads and generate revenue quickly. 

Pay per click works by having your ads displayed to reach your target audience and paying an amount for every click by a visitor. If you have any additional questions about PPC advertising, please feel free to get in touch.