What is PPC (Pay-Per-Click) marketing and how does it work? Explained for beginners

What is PPC (Pay-Per-Click) marketing?

PPC, short for pay-per-click, refers to an online marketing strategy wherein advertisers compensate each time a user clicks on their advertisements. The prevalent method of PPC promotion occurs on search engines like Google Ads, where advertisers vie for keywords to have their ads displayed prominently atop search engine results pages (SERPs) relevant to those keywords. Additionally, PPC campaigns extend to social media channels like Facebook and Instagram, as well as display advertising across various websites.

How does PPC work?

PPC advertising operates by enabling advertisers to bid on particular keywords or phrases they wish their ads to display for in search engine results. Upon a user searching for any of those designated keywords or phrases, the advertiser's ad is showcased among the top results, with the advertiser incurring a fee for each click on their ad.

Advertisers devise campaigns targeting specific demographics, interests, locations, etc., while also setting a maximum bid for their targeted keywords.

Utilizing a sophisticated algorithm, search engines determine which ads to display and in what sequence, factoring in elements such as:

• Bid amount from the advertiser
• Ad relevance to the keyword
• Ad quality
• Strategy and planning of the PPC campaign
• Prominent PPC platforms
• Resources for acquiring PPC skills

This advertising model is also applicable on social media platforms like Facebook and Instagram.

What sets apart PPC, SEM, and SEO from each other?

Although these terms are often used interchangeably, there exists a distinction among PPC, SEM (search engine marketing), and SEO (search engine optimization).

SEM serves as an overarching term encompassing PPC but extends beyond solely this advertising model. It refers to efforts aimed at enhancing a website's visibility on search engines, encompassing both paid methods like PPC and organic strategies such as SEO.

PPC entails online advertising primarily with search engines but also spans other platforms like video ads on YouTube and image ads on social media platforms such as Instagram and Facebook.

SEO involves optimizing a website's content and structure to enhance its visibility to search engines. This optimization involves tasks such as researching and integrating relevant keywords, refining meta data, crafting high-quality content, and acquiring backlinks from other websites. The objective of SEO is to boost a website's organic search engine rankings and attract traffic through unpaid search results.

What makes PPC significant?

Considering PPC as an asset rather than a marketing expense is imperative. In 2022, PPC generated an average of $2 in revenue for every $1 spent, with an average cost per click (CPC) standing at $1.16. While social media remains a prominent advertising platform, 40% of ad expenditure in 2020 was allocated to search engines, with Google accounting for 73% of that share.

PPC presents numerous advantages not typically associated with SEO or social media, including:

• Immediate results: PPC campaigns can swiftly drive traffic to a website, as platforms often approve ads the same day, ensuring rapid exposure across various formats such as text, image, or video ads.
• Targeted audience reach: Marketers can precisely target demographics, interests, locations, behaviors, and interests, facilitating access to the most relevant audience segments, potentially leading to higher conversion rates.
• Measurable performance: PPC offers quantifiable outcomes, enabling marketers to track conversions, ROI, and other essential metrics, aiding in assessing campaign effectiveness.
• Cost efficiency: Compared to traditional advertising methods like television or print, PPC can be more cost-effective, with marketers only paying when users click on their ads, coupled with the ability to set campaign budgets.
• Branding opportunities: PPC contributes to enhancing brand visibility and awareness, even if users don't click on the ads, as they are still exposed to the brand's messaging.
• Complementing SEO: PPC complements SEO efforts by providing immediate traffic while organic search optimization progresses.
• Goal tracking: Tools like Google Analytics facilitate real-time tracking of ad performance, assisting in refining strategies to achieve predefined goals efficiently.
• Reputation management: PPC enables bidding on keywords related to reputation events, allowing brands to control the narrative by directing users to landing pages addressing specific issues promptly and professionally.

Overall, PPC advertising offers a cost-efficient and measurable approach to reach targeted audiences, generate leads and sales, and bolster brand awareness.

What factors are crucial in strategizing and planning a PPC campaign?

When strategizing for a PPC campaign, there are several pivotal steps to undertake:

• Identify your target audience: Define the demographics of the audience you aim to reach with your ads, encompassing factors such as age, gender, location, interests, and more.
• Establish clear objectives: Determine the specific goals you intend to accomplish with your PPC campaign, whether it's boosting website traffic, driving online sales, or generating leads.
• Conduct keyword research: Utilize keyword research tools to pinpoint the terms and phrases your target audience is actively searching for, incorporating them into your ad copy and website content.
• Craft compelling ad copy: Formulate captivating headlines and descriptions for your ads that captivate the attention of users and entice them to click through to your website.
• Select appropriate ad platforms: Choose the suitable platforms for advertising, such as Google Ads, Microsoft Advertising, Meta Ads (for Facebook and Instagram), among others.
• Monitor and optimize your campaign: Continuously monitor the performance of your ads and make necessary adjustments to optimize your campaign and attain your objectives effectively.
• Experiment with various ad formats and targeting options: Explore different ad formats (text, image, video) and experiment with diverse targeting options to discern what yields the best outcomes for your campaign.
• Establish a budget: Determine the allocated budget for your campaign and ensure adherence to it throughout the campaign duration.

What are the leading platforms for PPC advertising?

Numerous prominent platforms provide PPC advertising options, with Google, Microsoft Bing, and Facebook ranking among the top choices. 

Various ad platforms offer diverse outcomes, including search, display, remarketing, and video formats (found on platforms like YouTube or Facebook/Instagram Reels).

For the sake of conciseness, we will concentrate on the two standout programs that encompass all ad types: Google and Facebook.

YouTube Ads

YouTube advertisements represent a digital marketing avenue enabling businesses and individuals to showcase their offerings on the YouTube platform. These ads come in various formats, including:

• Skippable video ads: Viewers have the option to skip these ads after a set duration, typically five seconds. They can run for up to 60 seconds.
• Non-skippable video ads: These ads must be viewed in their entirety before the main video content can be accessed. They are typically up to 15 seconds long.
• Bumper ads: Brief, non-skippable ads lasting six seconds or less.
• Sponsored cards: These small cards appear on the video screen during playback, providing additional details about the advertised product or service.
• Overlay ads: Semi-transparent ads displayed in the lower portion of the video.

Advertisers can target specific audiences based on demographics, interests, and behaviors. YouTube ads can be acquired on a cost-per-view (CPV) or cost-per-click (CPC) basis, with advertisers incurring charges each time the ad is viewed or clicked.

Google Ads

Google stands as the dominant force among search engines, unrivaled in its global popularity. This supremacy translates to higher fees for Google Ads' paid advertisements.

Advertisers compete to showcase their offerings, services, products, or videos on Google's platform. Options include displaying ads on mobile apps, videos, and non-search websites (referred to as search partners).

As the largest pay-per-click platform, Google Ads benefits from Google processing over 99,000 search inquiries per second. This vast reach increases the likelihood of ads being seen by the desired audience, potentially resulting in customer acquisition and profitability. Google Ads caters to both Fortune 500 companies and small businesses alike.

Instagram Ads

Instagram Ads provide businesses and individuals with a platform to promote their offerings seamlessly within the Instagram environment. These ads, presented as sponsored posts, blend into users' newsfeeds, resembling regular posts.

Instagram offers various ad formats, including:

• Photo ads: These ads utilize a single image to showcase a product or service.
• Video ads: Short video clips used to promote a product or service.
• Carousel ads: Businesses can display multiple images or videos within a single ad, allowing users to swipe through them.
• Stories ads: Ads integrated into the Stories section of Instagram, disappearing after 24 hours.
• IGTV ads: Ads appearing before an IGTV video begins playing.

Advertisers have the option to target specific audiences based on demographics, interests, and behaviors. Instagram ads can be acquired on a cost-per-thousand-impressions (CPM) or cost-per-click (CPC) basis, with advertisers incurring charges for each ad view or click.

Facebook Ads

Facebook ads provide businesses and organizations with a platform to promote their offerings within the Facebook ecosystem. These ads are featured in the news feed of Facebook users, the right-hand column of the desktop site, and the Stories section on mobile.

Various types of Facebook ads include:

• Image and video ads: These ads comprise a single image or video, accompanied by a brief headline and a call-to-action button.
• Carousel ads: Businesses can exhibit multiple images or videos within a single ad, allowing users to scroll through and explore the advertised products or services.
• Slideshow ads: These ads enable businesses to create a video-like experience using multiple static images.
• Instant experience ads: Businesses can craft immersive, full-screen experiences within the Facebook app.
• Collection ads: These ads enable businesses to feature multiple products within a single ad, linking to a full-screen view of the products.

Advertisers have the flexibility to create campaigns targeting specific demographics, interests, and locations. Facebook's algorithm leverages this data to display the ads to users who are most likely to have an interest in the advertised products or services.

TikTok Ads

TikTok ads provide businesses and individuals with an avenue to promote their products or services within the TikTok app. These ads prioritize engagement and creativity, often incorporating music, popular TikTok trends, and challenges.

TikTok presents various ad formats, including:

• Brand takeover ads: Full-screen ads showcased when a user launches the app, also offered in video or image formats.
• In-feed ads: Full-screen ads displayed in the main feed of the app, available in both video and image formats.
• Hashtag challenge ads: Ads that encourage users to engage in a branded hashtag challenge by creating and sharing their own videos using the designated hashtag.
• Branded effects: Special effects developed by brands for users to incorporate into their own videos.

Advertisers can target specific audiences based on demographics, interests, and behaviors. TikTok ads can be acquired on a cost-per-thousand-impressions (CPM) or cost-per-click (CPC) basis, with charges incurred for each ad view or click.

Furthermore, TikTok provides a self-service platform for small and medium-sized businesses, as well as a managed service for larger enterprises to execute their advertising campaigns.

Microsoft Ads

Microsoft Advertising, formerly recognized as Bing Ads, provides an advertising solution enabling businesses and individuals to develop and manage ads on the Microsoft Bing search engine and the Microsoft Advertising Network. This network comprises websites and applications collaborating with Microsoft to display advertisements.

Through this platform, advertisers can generate various types of ads, including search ads, product ads, shopping ads, display ads, and video ads. These ads are tailored to specific audiences according to demographics, interests, and behaviors. Advertisers can procure them on a pay-per-click or pay-per-impression basis, entailing payment for each click or view of the ad.

X Ads

X Ads are compensated promotions employed by brands to amplify messages, target prospective customers, and expand their follower counts.

You have the option to complement your organic X efforts with paid advertising, which offers a more assured way to ensure your post reaches the intended audience. X provides a variety of paid advertising options tailored to help achieve specific business objectives. These ads can also be precisely targeted to reach particular audiences.

X Advertising options

Select the appropriate ad format based on your objectives. Some options include:

Website traffic campaign

Utilize a 'website card' featuring an image and text preview of a link to encourage user clicks. This type of advertising is effective for boosting website traffic, online sales, or registrations.

Increase followers campaigns

Ideal for expanding your audience on X to enhance the reach of organic posts. This ad type focuses on growing your X follower count, emphasizing the importance of accurate targeting to ensure relevance to your business.

Promoted posts

Enhance engagement and expand the reach of specific posts by promoting them. This advertising method facilitates content sharing across X and stimulates conversations.

Mobile app promotion

Direct users to the app store or open a designated app with this ad type.

X targeting

Effective targeting enhances the efficiency of your advertisement and aids in achieving marketing goals. Targeting options include characteristics such as language, gender, interests, followed accounts, device usage, online shopping habits, posted or engaged-with keywords, and location. Additionally, you can leverage your email marketing lists to reach your existing audience on X.

It's crucial to assess the performance of your X advertising efforts and ensure they yield a satisfactory return on investment.

LinkedIn Ads

LinkedIn ads enable businesses and individuals to promote their products or services on the LinkedIn platform, aiming to engage with a professional audience and achieve objectives like lead generation, brand awareness, and job promotion.

Owned by Microsoft, LinkedIn offers various ad formats, including:

• Sponsored content: These ads seamlessly integrate into users' newsfeeds, resembling regular posts, and can comprise text, images, or videos.
• Sponsored InMail: Directly sent to users' inboxes, these ads facilitate personalized outreach.
• Sponsored jobs: Promoting job openings, these ads feature prominently in the platform's jobs section.
• Display ads: These banner ads appear on the platform's right side and can be targeted to specific audiences.
• Dynamic ads: Automatically generating personalized content for each user based on their browsing history, these ads enhance relevance.

Advertisers can target specific audiences based on demographics, job title, company size, industry, skills, and behaviors. LinkedIn ads can be procured on a cost-per-click (CPC) or cost-per-thousand-impressions (CPM) basis, with charges incurred for each click or view.

LinkedIn provides a self-service platform for small and medium-sized businesses, along with a managed service for larger enterprises to execute their campaigns.

What types of PPC advertisements exist?

Video

Video ads employ video content to spotlight products, services, or brands across various platforms, encompassing social media (e.g., reels or posts), streaming services like YouTube, and websites. YouTube video ads may appear as pre-roll, mid-roll, or post-roll formats, respectively preceding, during, or following a video. These ads can be skippable or non-skippable and usually incorporate interactive features like clickable calls-to-action, links, or forms. They are typically procured on a cost-per-view (CPV) or cost-per-click (CPC) basis, where advertisers pay for each view or click on the ad.

Search

Search pay-per-click (PPC) ads stand as the most prevalent type in the PPC landscape. These ads surface at the apex of search engine results pages (SERPs) upon users inputting specific queries (keywords or phrases) into search engines, with Google and Microsoft Bing being the primary platforms. Typically text-based, these ads are meticulously crafted to align closely with users' search intents. Advertisers typically incur charges for each click on their ads (known as Cost Per Click or CPC). Search ads serve as the preferred avenue for businesses aiming to promote their offerings and channel traffic to their websites.

Display

Display ads, appearing on websites, apps, and digital platforms, manifest as banners or other graphical formats. Characterized by visual appeal, these ads incorporate diverse media types such as images, videos, and interactive components. Display ads frequently serve purposes like enhancing brand recognition, advertising products or services, or directing traffic to websites. They are typically procured on a cost-per-impression (CPI) or cost-per-thousand-impressions (CPM) basis, entailing payment for each display of the ad a specific number of times.

Remarketing (or retargeting)

Remarketing represents a marketing strategy enabling businesses to display ads to individuals who have previously engaged with their website or mobile application. These ads are typically presented to users as they navigate other websites or utilize mobile apps, aiming to jog their memory about the business and prompt them to revisit the website or app.

Remarketing ads come in diverse formats, including display ads, search ads, video ads, and social media ads. They are generally acquired on a cost-per-click (CPC) or cost-per-thousand-impressions (CPM) basis.

Remarketing campaigns are meticulously targeted and proficient at fostering conversions and sales. They operate by monitoring users' interactions on a website or mobile app, leveraging this data to display tailored ads to them as they explore other websites or utilize different apps. This is achieved through the placement of a cookie or pixel on the user's browser or device, which is subsequently utilized to recognize them and present relevant ads.

Alternative Ad formats

Other advertising formats fall within the categories mentioned earlier but possess distinct characteristics concerning the eligible businesses and setup prerequisites. These encompass:

• Remarketing Lists for Search Ads (RLSAs)
• Performance Max
• Local Search Ads (LSAs)

How can I gain expertise in PPC?

Now that you have a better understanding of what PPC entails and how it functions, how can you expand your knowledge?

Search Engine Land’s PPC resources

Search Engine Land offers a plethora of PPC resources. Since 2006, Search Engine Land has been covering PPC extensively. Alongside news stories crafted by our editorial team, Search Engine Land publishes contributed articles from various subject matter experts, delivering valuable PPC tips, strategies, trends, and analysis.

We recommend signing up for Search Engine Land's complimentary email newsletter to receive a daily roundup of the latest PPC news and insights.

Search Engine Land also offers various categories covering specific areas and platforms that could prove beneficial to you:

• Video
• Paid social
• PPC
• Display
• Microsoft Ads
• Google Ad
• Google Shopping Ads
• Influencer marketing
• Meta Advertising (Facebook & Instagram)
• Apple Search Ads
• Amazon Advertising