How Does Pay Per Click Work

How Does
Pay Per Click Work

You’ve probably seen ads appearing alongside the intended search results when you conduct a Google search. What you might not have known about these ads are that they, in general, are part of the marketing tactic known as PPC (pay-per-click). PPC pays each time a user clicks on an advertiser’s ad and is a popular method of online advertising.

Aspects of PPC

Selection of Keywords

Good keywords are a huge part of what makes an ad campaign successful, but selecting ideal keywords can be a tough job. Your keywords should be relevant and specific to your business. You can find relevant keywords by using online tools or by using your creativity to narrow in on keywords that describe aspects of your business.

You should keep in mind the popularity of your chosen keywords and opt for keywords that aren’t being used on every website that is related to yours by topic or product.

For example, if you run a furniture store, you might want to target keywords such as: bedroom set, dining set, leather couch, or kitchen table. If you operate a bookstore, you may choose keywords like: romance novel, non-fiction novel, children’s book, story book, or best selling author.

In-Depth Website Analysis

Website analysis is the process that comes after the initial click that takes users to your website or landing page. It’s important to know what users do once they reach their target page. Do they spend time browsing? Look at a few additional pages? Or do they simply click out of your site and go elsewhere?

To find this out, you can commission the use of a website analysis software. This kind of software can tell you which areas of your site or landing page you could improve and help you reach success quicker.

In-Depth Website Analysis

Ad groups are useful components of PPC advertising. They are groups of ads that are all related to the same campaign. In one ad group, you might have a collection of ads that are related to, for example, holiday home decor or technology.

Keyword Bids

Bidding on keywords is crucial to the use of your keywords. To use a keyword for your campaign, you have to bid on it and, generally, the more you bid, the higher your keyword will rank on search engines. Keyword competition can be fierce so it’s never a bad idea to bid as much as your budget will allow.

How It Really Works?

PPC for Advertisers

Advertisers are clients who use PPC for their business. Advertisers will pay PPC networks such as Facebook Ads, Bind Ads, and Adwords to display their advertisements on their platforms. When someone clicks on the advert, the network charges them money, which is where the term “pay-per-click” came from.

How much is paid per click depends on the popularity of the keyword. If there are dozens of businesses vying to use the same keyword, the price per click will be higher.

PPC for Publishers

Publishers are individuals who work with PPC networks to generate revenue from displaying their ads. Most publishers own a website that they can display ads on, and, when visitors click the link, they often get a share of that ad’s revenue.

Just like with advertisers, how much publishers are paid per click depends on the popularity of the keyword. Publishers are often considered to be “partners” and many advertisers opt to have them display their ads instead of large networks.

This is because when working with an individual, advertisers can pay less per click.

PPC Bidding

Ad networks will usually allow advertisers to bid on keywords through open auctions. However, keyword bidding is more complicated than it seems.
First, Google determines the quality of your ad by analyzing your keyword and landing page relevance, and the click-through rate of the ad.

To find out your ad rank, you need to multiply your bid by your overall quality score. If the number you’re given is higher than the rank of other bidders, your ad will appear at the top of the list.

Quality Score

Your quality score affects how Google ranks your ad. Having a high quality score puts your ad higher on the list in terms of search engine position, and also helps you win keyword bids. To have a good quality score your ad should have relevant keywords, good CTR, and a quality landing page.

How does ppc work?

There are general rules that each type of ppc ad follows, although the specifics still vary from one type to another. Keywords are important, no matter what format or type you choose. These keywords determine where your ad shows up, when it shows up, and who exactly sees it. You’ll determine a hierarchy of keywords, with the most important keywords to your campaign at the top.

Rather than awarding the top advertising spot to anyone that pays for it, pay per click ad platforms use an automated process. This process is called an Ad Auction. The keywords you want to use to reach your target audience are also in demand from other businesses. To get placement in search engine results, you have to bid on the most important keywords for your ad.

Then, much like search engine results go through an algorithm to determine their relevance, so does your ad campaign. Depending on the results of this process, ads are placed at the top of the SERP, in a specific order determined by relevance.

There are some other important factors that play into ppc ad auctions, however. For example, with Google, advertisers must specify how much they are willing to pay for placement related to certain keywords. The maximum amount a business is willing to pay, or bid, per click is called a Max CPC.

If the keywords you target come up for auction, your max cpc is calculated alongside a quality score to determine if your ad will be shown. It can be difficult to understand everything a quality score entails, and how to optimize yours, so it’s a good idea to use a professional firm to help you navigate the process.

In essence, your quality score depends on not only how relevant your ad and keywords are, but also how likely the algorithms determine it is that someone searching online will click on your ad- this is also called a ‘click through rate.’

Next, Google will determine whether your landing page fits the ‘experience’ that the person making the query intends to find. Many things go into this analysis, including the overall visitor experience, as well as whether or not the landing page truly meets the needs or intention behind the query itself.

If you choose a shopping campaign for your business and target the right keywords, people searching for “x item near me” or say, “buy x item online” will see your product in the top suggested results.

Of course, any pay per click advertisement will have labeling or a disclaimer that it is an ad. However, people looking for specific items or information online want a clear direction. By having your ppc ad near, or at the top, you’re giving them a clear pathway to your business and the products you’re selling.

Conclusion

When you don’t know much about PPC, the idea can be a foreign concept – but it’s actually pretty basic and easy to grasp. When deciding on keywords just be sure to double check their relevance and popularity, and always stay on top of your game when it comes to making keyword bids.