What is PPC? A Guide for Beginners

The basics of what pay-per-click advertising means and if it is right for you.

When you create a business, a few essentials come to mind.

You need a website. And you need to get that website in front of your potential customers.

While there's no shortage of digital marketing channels to do this, two methods quickly stand out: PPC and SEO.

PPC stands for Pay-Per-Click advertising, while SEO stands for Search Engine Optimization.

Even the most experienced marketers have trouble navigating the ever-changing waters between the two.

In this guide, we are going to break down PPC Marketing into its bare basics. We'll cover all the important aspects that you need to know with regard to setting up your PPC campaigns and provide the latest strategies and tools you need to help get your business in front of your customers as fast as possible.

What is PPC Marketing?

In fact, getting your business in front of your customers fast is one of the benefits of PPC.

Unlike an SEO strategy which focuses on getting your website to rank organically in search engines for different keywords, PPC is a digital marketing channel where you pay to play.

As the name implies, with PPC you only pay for your online ads when somebody 'clicks' on your website. This is different to ads on several social media platforms like Facebook or Twitter where you often pay for impressions, or when your ad is shown to a customer.

The biggest platform for PPC is Google. However, Microsoft Advertising, Amazon and Facebook too all have pay-per-click options.

If you have ever done a search in Google, you have seen results split up into organic results which are typically shown in the middle of the page, and paid results which are shown at the beginning and end of the search results page.

PPC marketing is the digital advertising channel that marketers use to show those paid ads to your customers, while SEO is the digital marketing channel used to help get your website in the organic results.

Whenever you see a Google Ad, just know that there is an advertising sitting behind it that is willing to pay anything from a few cents to several dollars for you to click on that ad.

What is SEM?

SEM stands for Search Engine Marketing. Most of the time, SEM is focused on optimizing paid ads which appear on search engine results pages, known as SERPs. But SEM marketing also includes SEO, which focuses on getting your website to rank higher in the organic results.

Taken together, SEM focuses on securing the highest rank possible for your website in the SERP, be it organic or paid.

Google remains the go-to search engine, and SEM marketing on Google continues to be one of the most consistent marketing channels to get high-quality traffic for your business.

Here's what a paid ad looks like in Google when you search for PPC Tools.

And here's what an organic search result looks like in the Google SERP.

Notice how the only difference between the two is a small, black-and-white symbol for ad at the start of the SERP result.

Google does this on purpose to get more people to click on ads. For each click that comes from a user, Google takes its cut. And this is how Google makes the majority of its money.

To get your website in the organic SERP, you need an SEO strategy.

To get your website in the paid SERP, you need a PPC strategy.

PPC vs SEO

Both SEO and PPC complement one another, but the strategies you use to pursue each channel will differ. A crucial difference is that SEO is a long-term strategy. It requires writing different blog posts and creating web pages that rank for keywords your users search for, but the results of all those efforts will only be seen several months later.

PPC is the best way to get your website in front of your potential customers fast. If you are strapped for cash, and want to get immediate traffic to your website, a PPC strategy may be a better fit for you.

Another important note to make is that although SEO focuses on organic traffic, which is technically free for you (i.e. you don't have to pay when somebody clicks on your SERP result), investing in an SEO strategy will still cost you lots of money, to pay somebody for you to write your articles and optimize your website.

PPC campaigns are also more flexible when compared to your SEO strategy. If you suddenly decide to launch a new service or change your industry, you can easily change your ads in Google to start getting new traffic from this new niche.

Not so with SEO. All those months building links and writing articles on one industry cannot magically be translated to another industry. You will have to start over.

However, that doesn't mean that SEO does not have a place in your marketing strategy. SEO is fundamentally a long-term investment. When you get that unicorn article to rank as the first result on a keyword related to your business, it becomes essentially free traffic to your website. With PPC, you would have to pay for the clicks.

Benefits of PPC

There are several specific benefits to using PPC in your SEM strategy and we have gathered them here for you to review:

1. Immediate results

Okay, if you are a complete beginner, it might take you a little while to set up your campaign and get it live, but once it is live you will most likely start seeing traffic to your website increase immediately.

2. Complements your SEO

The traffic your PPC campaigns generate can indirectly boost your SEO efforts. Google takes into account the traffic that an article gets when deciding to rank it in the SERP. If users are directed to your website from a paid ad, and then go on to read your blog or articles, this increased traffic will help your pages rank organically.

3. Smaller investment

All that is needed to get your business in front of a high-relevant audience is a relatively small upfront investment. Once that traffic begins to convert, you can scale up the budget. For example, if you are a car dealership and bid on a keyword like 'used car parts' where the average price is $5, and your average order value is $10, you can essentially scale up your PPC campaign indefinitely to get as much traffic as possible.

4. Access to a targeted audience

As mentioned earlier, PPC allows you to get super granular with what audience you target. If you do keyword research and choose to bid on keywords that have high-purchase intent that are likely to convert, you can see traffic and conversions explode for your business.

Moreover, when the query a user searched for, the ad they are shown, and the landing page they are taken to are a mirror-perfect version of one another, conversions are shown to be highest. There are several advanced PPC strategies you can implement to make sure this tight-connection exists, such as SKAGs.

5. Easy to scale

Entire businesses have been built around the estimated cost of keywords in Google Ads. While the traditional way of building business would be to do product research first, and then look at marketing costs second, more than a few reverse the process with Google Ads.

For example, PPC can show you that the estimated monthly budget for a certain keyword in Google Ads like "PPC Automation Tools" is $10,000. Now it just comes down to choosing what PPC tool to build where you could charge an amount to cover those PPC costs and scale up.

6. Easier to rank on competitive keywords

It can be incredibly difficult to rank on competitive keywords organically. Not only do you potentially compete with bigger business rivals that have larger marketing budgets, there are also industry news sites with high domain authority that will have the edge over any new business.

That is why SEO is a long-term strategy, where your articles only begin to appear in SERP results months later.

Not so with PPC. While competitive keywords will cost more per click in Google Ads, you can more or less be assured that your ads will appear for the ones you choose when your bid goes through.

7. Deep Analytics

When you combine your Google Ads with Google Analytics, you get a goldmine of information about how users interact with your website, which pages are being clicked on, which pages have a high bounce rate and so forth.

The more data you have, the more insights you can make about your users. And because PPC brings you traffic, your analytics get better.

8. Easier to control budgets

Pursuing a PPC campaign means you will know exactly how much a click costs and how much you are willing to spend per month. You will more or less get an estimated amount of impressions, clicks and conversions for each keyword, and you can more easily control where your money goes.

With SEO, you are investing into the unknown. There is no guarantee that that article you paid for will rank several months down the line.

Useful terms to know in PPC

To help you get better acquainted with the language of marketing in Google Ads, we've compiled a list of useful terms to know which will pop up again and again when doing PPC.

  • Impressions: The number of times an ad is viewed.
  • Cost: The amount of money a campaign spends on paid advertising.
  • Clicks: The number of times your ad was clicked on by a user.
  • Conversion: The specific goal you are tracking (a sale, a view of a high-value page, an email sign up, etc.).
  • CPM (cost per thousand impressions): The cost to have your ad seen 1,000 times.
  • CPC (cost per click): The cost per click for an advertiser. CPC can be as low as a few cents or as high as a few hundred dollars, depending on competition, your industry, and audience relevance.
  • Cost per conversion: The cost per purchase, order, acquired customer, or another conversion goal you’ve set.
  • CTR (click-through rate): The percentage of users who clicked on your ad out of the total number of impressions it received. Your click-through rate is the most significant signal of relevancy in Google’s search auctions.
  • Conversion rate: The number of conversions divided by the number of clicks, expressed as a percentage.
  • Budget: The total amount of money allocated to an ad campaign.
  • Revenue: The total value, in dollars, generated by an ad.
  • Profit: The total value, in dollars, generated by an ad after subtracting expenses, such as advertising costs and cost of goods.
  • ROAS (return on ad spend): Revenue generated from an ad divided by the advertising cost to show the return on that ad. For example, $5 made for every $1 spent yields a ROAS of 5:1.
  • AOV(average order value): The average dollar amount a customer spends on a site. AOV is calculated by dividing the total revenue by the number of orders.
  • CLV (customer lifetime value): The predicted total value of a single customer (sometimes called LTV) for the entirety of their relationship with a company, including future purchases.

How Google Ads works

Google is the main PPC marketing platform. There are millions of people around the world that use Google as their tool to search for information.

Google charges businesses for access to these searchers. Whenever a user makes a search, and there is a business that exists that would like to show you an ad based on that search, Google stands as the middle man between the two.

However, in competitive industries, there can be hundreds of different companies competing with each other to show their ads for certain keywords. And the amount of space Google has to show paid ads is limited.

To solve this problem, Google uses an auction system where advertisers bid on different keywords and the highest bidder with quality ads wins.

I added that bit about 'quality ads' for a reason. Google will not simply show any ad just because an advertiser chose to bid an exorbitant amount of money for a keyword.

At the end of the day, Google is interested in only showing relevant ads to searchers. If Google suddenly got too spammy and users were shown poor quality ads for services not related to their search, people would stop using Google as a search engine.

Your Quality Score and maximum CPC determine the position that your ad will be in in the SERP and the CPC you pay.

Maintaining a consistently high Quality Score is crucial to coming out on top during ad auctions. Higher Quality Score often leads to less costly clicks and improved ad positions.

How is quality score determined? There are three main factors: expected clickthrough rate, ad relevance, and landing page experience.

There are certain Google Ads strategies that are specifically designed to improve your ad relevance and CTR in pursuit of consistently high Quality Scores across the board. With some PPC know-how you can get your ads on the good side of Google’s algorithm and enjoy the reach of highly competitive keywords at fairly reasonable prices.

Need help setting up your first PPC campaign? Try our fast, simple Google Ads tool to get started in no time.

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