There are several types of PPC ads, but one of the most common types is the paid search ad. These ads appear when people search for things online using a search engine like Google, particularly when they are doing job searches, which means they are looking for something to buy. This could be anything from a mobile search (someone searching for “pizza near me” on their phone) to a local service search (someone searching for a dentist or plumber in their area) to someone buying a gift ( “Mother’s Day Flowers”) or a high-end item like business software. All of these searches trigger pay-per-click ads.
In pay-per-click advertising, companies that serve ads are only charged when a user clicks on their ad, hence the name “pay per click.”
Other forms of PPC advertising include graphic advertising (typically ad serving) and remarketing.
How Does Pay-Per-Click Advertising Work?
In order for ads to appear next to results in a search engine (commonly called a search engine results page, or SERP), advertisers cannot simply pay more to ensure that their ads appear more prominently than ads in its competitors. Instead, the ads are subject to what is known as the Ad Auction, a fully automated process that is used by Google and other major search engines to determine the relevance and validity of the ads that appear in your SERPs.
How Keywords Work in Pay-Per-Click Advertising
As the name implies, the ad auction is a bidding system. This means that advertisers must bid on the terms they want to “activate” or show their ads. These terms are known as keywords.
Let’s say, for example, that your business specializes in camping equipment. A user wanting to purchase a new tent, sleeping bag, or portable stove can enter the keyword “camping gear” into a search engine to find retailers that offer these items.
The moment the user submits their search query, the search engine performs the complex algorithmic calculations on which the ad auction is based. This determines which ads are displayed, in what order, and by which advertiser.
Since you must pay for every click on your ads, bidding is only on keywords that are relevant to your business, so you can be sure of getting the ROI of your ad spend. A keyword tool can help you find the right keywords to bid that are likely to drive sales or conversions, and not be prohibitively expensive.
Actionable Insight into Your Pay-Per-Click Advertising Campaigns
There you go! Pay per click explained.
Although the basics of pay-per-click advertising are simple, managing a successfully paid search account can be anything less. Many advertisers simply cannot spend the time and effort required to stay on top of Google AdWords and Bing Ads developments, and many miss out on valuable opportunities to grow their business through PPC.