Pay-per-click, (or Cost-per-click) means only pay when someone clicks on the ad. This means you ad can be visible (as an impression) but costs almost nothing* until someone decides to click on it.
PPC is the advertising mechanism that sends online traffic to your website landing page via search engines (google search) and social media platforms (youtube, facebook etc)
The advertiser (client or agency) pays the publisher (digital ad agency) or intermediate ad serving (3rd party bidder) only when a user clicks on the ad note the ad can be visible as it’s displayed on the page but no fee charged until it’s clicked on.
Think of it as a print ad in a magazine that will only cost advertisers the second a reader begins to look at the ad itself.
*It’s almost free media (impressions) until someone interacts and clicks on it.
The benefits compared to organic reach on search engines and social media networks, is that the reach and targeting capability of PPC ads is far more advanced. The additional costs are incurred when you contract a 3rd part supplier to set-up, monitor and optimized campaigns to ensure digital media budgets deliver positive ROI.
*Modest fee is made for impressions but it’s a fraction of the cost of a cost-per-click.
What are the main PPC Channels?
PPC ads can be launched on mainly 3 different platforms;
1. Search Engine (like google and youtube)
An example of a PPC on a search engine;
Peter has to visit his brother in Sydney for his wedding. He has accepted the invitation and intends to book a flight to Australia. Peter goes online and types his inquiry into the Google search box for flights ‘London – Sydney’. Instantly there appears ads of travel agencies and airlines displaying ads for flights to Sydney based on his search words. Peter clicks on an ad and compares the costs and dates and selects the best carrier to book his flight ticket.
The above example Ad is search engine PPC ad, whereby advertisers that have current flight offers use selected keywords and place their bid to display their ads (impression). A charge is made to Google AdWords, only when peter clicked on the ad.
2. Social Media Network (Like Facebook and Instagram)
An example of a PPC ads on social media network;
Roisin is a blogger. She browses various sites reading content about social media and about the activity of blogging online, blogging plugins and even video blogging (vlogging). Every morning before breakfast she goes to her Facebook newsfeed, here she spots an ad from Joomla about new blogging template and dynamic plugins. There’s a 70% offer if you purchase by the end of the month. The timing is great as she was thinking about improving her existing Joomla blog page and the 70% discount is too good to miss, so she clicked on the ad and made the purchase.
The above ad is social media PPC ad, when the advertiser targeted a user based on the interest and behaviour. They paid to Facebook when a user clicked on the ad, as they are using CPC model (Cost per Click).
3. Other Websites
An example of a PPC ads on other popular websites;
David was relocating from UK to Dubai and he is looking for a flat or villa to rent. He’s been browsing the internet looking getting information on Dubai and reading expat blogs when he comes across and ad about long term car leasing in UAE with an special free first month rental offer on a website where he was reading a blog. This was a relevant ad for him as the next step after leasing a house was to rent a car. The 1 month free rental was attractive enough for him to go ahead and click on the banner ad and book the car.
The above ad is a display ad (as opposed to a text only ad like adwords). This can be served through Google display network (GDN), Double-Click account, Ad Sense account or any other display advertising platform.
The advertiser targeted users who are relocating from one city to another. The platform studies the users search history and targets or tracks them accordingly.
Display ads (GDN) can have either Cost Per Click (CPC) model or Cost Per Thousand Impressions (CPM) model. The latter makes a charge based on the number of impressions the ad is displayed.
How does PPC work?
The above 3 examples of PPC digital media have numerous platforms underneath each channel type. Within each platform it has its own algorithm with different ways of targeting, conducting ad auction, calculating the cost and choosing the winner of the ad.
For example a basic PPC platform which is most common is – Google Ads (Ad Words and Network Display)
Account Structure overview
A typical account in a search engine (like Google AdWords or youtube) consists of ‘Campaigns-Ad groups-Keywords & Ads’.
These Campaigns are set-up based on variables or metrics like location specific (Geo targeting), product specific or based on the budget levels. Each Ad group consists of a set of keywords (or target keywords) of similar theme and ad copies.
In search engines, targeting is limited to the keywords used for the search. Keywords can be tested over time to see which ones perform better than others. Also they can refine the keywords targeting by choosing audience based on remarketing list, search behaviour of user etc.
The fundamental bidding model on a search engine is Cost-per-Click (CPC). Advertisers pay only when an ad is clicked. There are various bidding strategies available; manual bidding, maximize clicks, enhanced CPC, Return on Ad Spend (ROAS).
Ads get into auction (or bidding war) whenever the targeted keyword is searched by a user. The eligibility and the criteria for ad position is based on ad rank of the keyword the account has secured. Ad rank is calculated by multiplying Quality Score (QS) and bid of the keyword.
The types of ads available on search network are text ads and Display ads. Text ads can be enhanced by the use of ad extensions like site extensions, structured snippets, location extension, callouts, price extensions etc.
Typical PPC Proposal
PPC is becoming a large part of Digital marketing services offer by digital creative agency’s Here is an overview of the types of services and pricing structure of PPC agencies;
Services proposed by PPC agencies
When making or receiving a PPC proposal it will usually consist of two essential services;
Campaign Building and Management
In this offer, PPC account is built from scratch and managed on regular basis. The agency would build the whole account with keywords, ads and landing pages. They are also responsible for data tracking of the campaigns and do optimization to some extent.
Following are the some of the important activities carried out in this service;
Thorough understanding of the client’s business and extensive research of competitors’ and their PPC strategy
Defining the objective of client’s PPC campaigns and discussing the budget allocation
Building the base of campaigns with keywords tightly grouped into ad groups inside well-defined campaigns
Writing compelling ad copies with appropriate ad extensions
Building relevant and easily navigable landing pages optimized for conversion
Creation of Google Analytics account along with the appropriate goals of the website
Deciding the bid strategies and monitoring the cost and average ad position
Experimenting and improving the campaign performance with regular optimization
This offering mainly focuses on improving the performance of current PPC account exponentially through various strategies and optimization methodologies.
Keywords audit will be conducted to assess the quality and weight of keywords. Through this analysis, certain critical decisions will be taken to weed out money consuming keywords (Keywords getting clicks but not conversions)
Identify new keyword opportunities through competitor research and certain keyword tools (Moz.com or SEMRUSH.com online tools). Keywords with good potential would be added to the account
Experiment with various keywords matches. Try out broader keyword matches to increase the brand awareness or with exact keywords to improve the conversion
Conducting A/B testing with 2 or more ad copies and testing the effectiveness of ads after letting them run for 7-10 days
As per the ad relevancy data of Quality score, edit the ad content to improve the said metric
Experimenting with various ad extensions and testing the result
Landing Page Optimization
Redesigning the landing page to make it optimized for conversion
Conducting A/B testing for different CTA buttons
Experimenting the landing page with an offer
Improving the landing page experience of the user by making ad and landing page content in sync
Price Structure of PPC proposals
There are 2 main ways in which PPC agencies (digital marketing companies) charge their clients as follows;
Pay per keyword
In this structure, a client is charged per keyword in the account. For example, if an account has 200 keywords, the client would be charged AED 5/- per keyword which will sum up to AED1,000/- per month.
Percentage of PPC budget
This is one of the most common costing structures in PPC. The client would be charged a percentage of the PPC budget. For instance, if the PPC budget per month is AED 5,000/- the client would be charged 30% of it which will be AED1500/- for the PPC service.
Case study for PPC
This example is a B2B PPC Campaign proposed
by a digital marketing agency.
- 85.71% increase in qualified leads
- 31.09% decrease in cost/lead
- 45.02%decrease in cost/click
- Detailed analysis of each campaign in terms of its cost consumption, search rank share, conversion percentage etc.
- Decide to modify by shutting down campaigns which are under performing and replace with launch new campaigns
- Shut down campaigns with no leads and very few searches. Though they don’t cost money, they demand attention. Crop them off and focus on the ones which are making money
- Landing page optimization based on the experiment that traffic sent to homepage converted well compared to standalone page
- Ad scheduling! Based on day and hour data, ads were stopped running on Sundays and any night time (8 pm to 8
The business world has become a fan of data and has bowed down its power, PPC is no different. The magic which happens in PPC is through effective data analysis. PPC is an exhaustive as well as a dynamic platform. Experimenting and changing the strategies is the only constant. In this PPC example, we have emphasized on the art of utilizing data and taking the calculated risk which sets apart a successful PPC advertiser.