With an average of 40,000 search queries made every second on Google, we know the internet is big business.
There’s so much scope for companies to get in front of their target audience, but there’s a lot of competition too. In order to cut through the noise and stand the best chance of success many choose to employ digital marketing strategies, whether that be search engine optimisation (SEO), pay-per-click (PPC) or digital PR.
In this guide we’ll explore the world of PPC. It’s aimed at beginners so no prior knowledge is required; you may choose to read it all for a full understanding of the basics or dip into the chapters that you’re most interested in.
We’ll look at:
- What is PPC?
- The basic premise of pay-per-click
- PPC channels – AdWords, Bing and social media
- The basic principles of campaign optimisation
- Measuring the results of a PPC campaign
- Skills needed for a career in PPC
What Is PPC?
PPC stands for Pay Per Click and is the term used to describe the type of online advertising where you pay every time a user clicks on your ad. When people talk about PPC, they’re usually referring to paying to advertise on search results pages across Google and Bing, but the term is also used more broadly to refer to display advertising, social media advertising and more.
The aim of PPC is to get your ads showing to relevant customers and to make the most of your advertising spend using strong targeting and a wide range of techniques to bring prices down.
From a business’ perspective, PPC can be highly lucrative (when done well) and is completely trackable – so you’ll know how much money you’re getting back from the money you get in.
You can be very specific when it comes to the ads you display, targeting audiences based on age, geographic location, interests, and much more. If you’re a Brighton-based florist for example, and only make deliveries within a 20-mile radius, then it makes sense that you’ll only want to target people from the local area. Companies can choose where they want their advertisements to be shown as well as how much money they’re willing to spend on their campaigns. They’re also able to see every point of the customer’s journey, from the moment they click on their ad through to when they ‘converted’ (made a purchase).
The basic premise of pay-per-click
Businesses choose to use PPC in different ways and for a variety of reasons, depending on what kind of business they are. This typically falls into two categories when it comes to PPC: lead generation and ecommerce.
A lead generation business is a business which wants to get users to sign up for a service by providing details, e.g. law firms, job sites, or insurance companies – so their PPC goals will relate back to enquiry submissions, form sign ups and so on.
An ecommerce business is a retailer that wants users to buy a physical product e.g. clothing, electronics, or furniture – so their goals will relate to people completing a purchase online.
The purpose of using PPC largely depends upon the type of business involved and can cover a range of goals, for example:
- Brand Awareness (getting ads shown to as many people as possible)
- Engagement (achieving a high number of clicks on ads)
- Conversions (completing a purchase or signing up for a service)
How does PPC work?
At its most basic level, a PPC account comprises:
- Ad groups
Campaigns in PPC are used to categorise ads or group them according to your strategy. A PPC account will be made up of a series of campaigns, where the budget can be set at a campaign level where appropriate – which is useful when applying budget and also for businesses when thinking about how they split their marketing spend.
Example: For a clothing retailer, campaigns may include “Accessories” and “Clothing”.
Ad groups in PPC are used to segregate campaigns into their relevant constituent parts.
This allows for better targeting within the campaign, whereby splitting the main campaign topic down makes it easier to create relevant adverts to promote that specific product or service, or to speak to that specific audience.
Example: For our clothing retailer, ad groups may include “Shoes” and “Jewellery”.
This is the real crux of PPC. Keywords are the things we bid on primarily; we identify the keywords – or search queries – for which we want our ads to appear, and can be quite specific about those terms for which we want our ads showing, and those we don’t.
Example: in our retail example, keywords might include “red shoes”, “necklaces” and so on.
The Auctioning Process
Advertisers bid on the keywords in their account to try and get their ads to show in good positions for relevant search queries. However, the bid they set won’t necessarily be the amount they actually pay for the click.
Your actual cost per click will be 1p more than the advertiser ranked directly below you. So for example, if you bid £1 for a keyword and you appear in position 2, but the advertiser in position 3 pays 50p, you will only pay 51p.
Advertisers aim to get their ads showing in desirable positions above the organic results, though position 1 isn’t necessarily the best! From our own experience at Impression, the difference in performance between position 1 and other positions above the organic results usually isn’t significant enough to justify the increase in spend it would warrant.
However, it’s not just the bid which affects an ad’s position. Search engines also rank ads based on a factor called quality score.
Quality score is made up of three main components:
- Ad relevance – how relevant your ad is to the keywords you’re targeting within its ad group.
- Landing page experience – the quality of experience which users have on the landing page used in your ad.
- Expected click through rate – the estimated chance that your ad will be clicked when shown, based on historical CTR (click-through rate) data.
Optimising these components will achieve a higher quality score for your ads meaning that for the same ad position, your average cost-per-click will decrease. As a result, you’ll be able to achieve more clicks within your allocated budget. You’ll also likely see an increase in CTR and conversion rate as you provide a better ad experience for users.
Types Of Advertising
It often helps to understand PPC by trying to go through the process yourself, as a consumer. Let’s take a hypothetical scenario; you’re looking for a winter coat and so you search for ‘women’s/men’s winter coats’ on Google. A search for ‘women’s winter coats’ brings up the following results:
As you can see, the search engine results pages (SERPS) bring back a LOT of suggestions for this query. In this example we can see 3 different types of result; search ads (in red), organic search results (in green), and shopping ads (in blue). Search and shopping ads on Google are run via accounts on Google’s Adwords platform, whereas the organic result has appeared because Google deems it to be the most relevant to the user’s search query.
Note: organic is where SEO comes into play – a strategy employed by companies to naturally improve their rankings in the SERPS and to drive traffic back to their website.
Search ads can be used for all types of businesses, whereas the focus of shopping is solely ecommerce. These basic principles are replicated on other channels such as Bing, but separate ad accounts are required to run ads on these different channels. Though Bing receives a lower search volume than Google, it can be a particularly useful channel for B2B businesses who are looking to target an older, more professional audience. It also tends to cost significantly less due to reduced competition amongst advertisers.
Display ads also run via Adwords but are different to search and shopping in that they do not appear in search engine results, but on sites across the web.
They also differ because advertisers don’t pay via a cost-per-click system, rather on a ‘cost per thousand’ (CPM) basis. This means that they pay a fee each time their display ads reach 1,000 impressions (an impression is an ad appearance which may or may not be clicked on).
Display ads can come in various different formats, as shown in the example below:
On the display network, advertisers bid on ad placements rather than keywords and the campaigns work by targeting audiences. This audience targeting can be based on several things, including:
- User types (assigned by Google)
- Search history
- Interaction with the advertiser’s site (remarketing)
When used effectively, display advertising can be a great tool for many digital strategies. It does tend to have a much lower cost-per-click (though also lower click-through rates) than search or shopping. It can be excellent for brand awareness and reaching new audiences, targeting users as they browse the web to keep the business at the forefront of their mind.
Display also works well for a technique called remarketing. Remarketing works by serving display ads to users who have already visited the advertiser’s website, or performed specific actions on it. For example, you could target people who visited your site in the past 30 days who left without converting, encouraging them to come back and revisit the site.
Shopping ads are run exclusively by businesses that are selling a physical product. To be eligible for shopping ads, the advertiser’s site must have ecommerce functionality and the advertiser must provide a feed containing information about all the products they wish to sell.
Advertisers can’t bid on keywords in shopping, instead the data provided in the feed is used to show products depending on the user’s search query. A higher shopping bid won’t achieve a better position for your product, it will instead enter your product into more, broader ad auctions. Therefore having lower bids means ads will show for fewer, but more relevant searches.
PPC isn’t just restricted to search engines – advertisers can run ads on social media platforms too. Depending on the target audience, businesses may want to run campaigns on Facebook, Twitter, Instagram, LinkedIn, or even Pinterest.
These campaigns work in a similar way to Adwords, using a bidding system to secure impressions and clicks. Social advertising can work well for both lead gen and ecommerce businesses, with ads taking different formats depending on the platform.
The Basic Principles Of Campaign Optimisation
The key to any successful PPC campaign is regular and ongoing optimisation work. There are many different aspects to auditing PPC campaigns, all dependent on the type of advertising campaigns involved. We’ve listed a few of the main ones below:
- Adjusting bids and budgets
- Reviewing search queries and adding negative keywords to refine traffic
- Analysing quality score
- Refreshing ad copy
- Updating audience targeting
- Identifying areas for campaign expansion
Depending on the performance of your campaigns, you might be looking to increase bids and budgets or vice versa.
For example, for a shopping campaign which is delivering above the target ROI, you may choose to increase bids in the hope of increasing revenue. Equally, a search campaign with a poor cost per conversion is likely to warrant bid decreases and budget reductions. Running successful PPC campaigns is very much a balancing act, which needs regular care and attention.
Measuring The Results Of A PPC Campaign
Of course, any optimisation work can only be done using reliable, detailed data. It’s important to set up conversion tracking in your accounts so you can access the full range of this data, making informed decisions about how to improve your account.
Your key metrics will depend on the type of business involved, as well as its goals.
Though all businesses are likely to aim for increased conversions (whatever form they may take), ecommerce businesses are more likely to focus on revenue and ROI whereas lead gen accounts will be more concerned about the cost per conversion.
The advertising channels provide data within their own platforms (e.g you can review the performance of Adwords campaigns within Adwords) but we highly recommend connecting your accounts to Google Analytics for a wider range of more up-to-date information.
Skills needed for a career in PPC
There’s no set path into PPC – people come from a wide range of backgrounds but overall they tend to have a similar set of skills. They are both ‘right-brained’ and ‘left-brained’, meaning they can demonstrate both analytical and creative skills. Though everyone brings something different to the table, we’ve found the following skills to be essential for a successful career in PPC.
- A good head for numbers – you don’t need to be a whiz at algebra, but you do need to be able to manage money and calculate profitability etc.
- Communication – our clients put a lot of trust in us to manage their budgets, so it’s important we’re able to give them clear feedback on the work we do and how it’s affecting their PPC performance.
- Creativity – innovation is a big part of what we do, especially as digital marketing is a relatively young industry. We’re constantly trying new things, and being able to come up with creative ideas is key.
- Organisation – as an agency, organisation and time-keeping is a huge thing for us. We need to make sure that we don’t over- or under-service any accounts, balancing our workloads to deliver a high quality service to a range of clients each month.
- Desire to learn – PPC is a constantly evolving industry, meaning there are always new techniques, strategies and technologies to master. A keenness to learn is vital for both keeping up with and driving industry trends.
Could your business benefit from PPC support?
While beginners’ guides like this are intended to help you take your first step in managing your own PPC campaigns, we appreciate that applying the required time and resource can be challenging. After all, a high performing PPC campaign can reap rewards, while a poor performing or under-maintained campaign can actually cost your business money.
Talk to our award-winning PPC team about how we can help you; call 01158 242 212 or email email@example.com.