Explaining Pay Per Click Advertising

Explaining Pay Per Click Advertising

Pay Per Click AdvertsingReading Time: 7 minutes

In this modern era of technological advancement, the internet has become the primary medium of communication and paved the way to digitalisation. It is thus no wonder that when it comes to performance marketing, the PPC advertising business model has established itself as the most viable in terms of results and cost-efficiency.

What is PPC?

The term PPC has been going around for quite some time, but not everyone has a grasp on what it means. To learn about the best form of internet marketing so that you can target an audience for your business, it is important first to understand what PPC is all about.

PPC stands for pay per click and comes under paid search advertising. This type of internet advertising model generates revenue whenever an ad is clicked where the advertisers pay the search engine or a website for regulating and guiding online traffic to their site. Social networks like Facebook, Instagram, Twitter or LinkedIn as well as search engines such as Google and Bing offer PPC advertising on their respective platforms (Google Ads or Bing Ads for example).

There are two forms of PPC – flat-rate and bid-based.

• Flat-rate is where there is an agreement between the advertiser and the publisher about the fixed amount to be paid per click. This is commonly used on sites with a higher number of paid ads, and depending on the length and value of the contract, the fixed amount can go higher or lower.

• When various advertisers compete mutually in an auction to earn spots on search engine result pages (SERP) or advertising networks trying to woo customers with their business, this is known as bid-based PPC.

Often used to describe paid search on the internet, PPC focusses on advertisement campaigning through identifying keywords and organising them into appropriate and relevant ad groups. The more successfully a PPC advertisement works, the better rewards and higher profits are achieved for the advertiser (usually a business).

Benefits of PPC

A brief overview of the benefits of PPC can underline the significance of this business model over other traditional ad campaigns.

• The first party that gets the benefit from a PPC ad campaign is the advertiser. Advertisement is a long-term and ongoing investment, and the rewards from such promotion need to be proportionate to merit its continuance. PPC has been statistically found to be very cost-effective. Choosing Google Ads or Bing Ads to promote their products and services online, advertisers can ensure global visibility which can translate into more sales and better profits.

• The other party involved in this arrangement and benefitting from the PPC model is the publisher. People browse through the internet all day long visiting webpages and employing search engines to find what they are looking for. The publisher for the ad (Google, Bing or Facebook for example) has to place the advertiser’s information strategically so that the webpage visitor clicks on the ad, and the ensuing revenue generated from this.

• The benefit of PPC advertising is not limited to the publisher and the advertiser alone, but the display advertising network that shows these ads can also profit, in terms of revenue share. Google Search Network which includes search result pages, Google Maps, Google Shopping and Google Display Network (which also includes Gmail and YouTube) are prominent examples of display advertising networks.

• Sometimes, people ask what good does all this do for the webpage visitors. One thing to keep in mind is that with the growth of digital marketing, steady progress has been made for regulating and preventing fraudulent use of clicks. As a result, the online visitors can rest assured that the ads they are viewing of products and services are genuine, and they can easily opt-out of seeing these ads by clicking if they choose to.

Different ad types under PPC

Do you know how many different types of ads come under the PPC advertising model? A brief overview can help you understand it better and how these different ad types can be used to your advantage.

• Used extensively by Google Ads or Bing Ads, the search ads are the most common form of PPC model. You may have noticed that when you search for some keywords or key phrases, on top of the organic search results, certain results appear with the word “ad” written. This is an example of paid search.

• Display ads are common when you visit a webpage when an image, with or without text, pops up as an ad ready to direct you to a new website for the product or service it is promoting.

• With the increasing popularity of social media and the amount of time people spend every day using them, social ads have gained momentum as a leading example of a sponsored PPC ad.

• Often people will not be persuaded to purchase something from the first viewing of an ad. This is where remarketing ads come into play, where webpage visits that did not convert into immediate sales can be targeted again through a remarketed PPC ad.

• When promoting your brand, you can try the Google shopping ads that are displayed in a carousel format when someone is searching for products. The benefit of this type of ad is that before even the main search results are listed, the products and prices of your business will be displayed to the viewer above organic search results.

• Another form of premium PPC advertising is the local service ads. This is an exclusive form of paid advertising, and only if your services fall under the advertising categories, you can use this to promote your business.

• You may have noticed that sometimes on top of your mailbox, dynamic ads will get displayed. These are examples of Gmail sponsored promotions, and can specifically target audiences based on their interests.

• Video ads are another popular form of PPC advertising. Found most commonly as a sort of variation of display ads on websites, where instead of a static image and/or texts, a dynamic video ad can induce webpage visitors to click and check out a new website. A specific example of a video ad is the instream ad which appears on the YouTube either as a sidebar or as skippable/non-skippable ads.

The video and podcast talks in detail about paid advertising, alongside other areas within digital marketing.

How to optimise PPC to achieve ROI?

There are specific ways in which the different types of PPC advertisements can be set up and put to use. But what good is a performance marketing ad campaign which does not translate into sales and profit? That’s why the concept of ROI (return of investment) is associated with the PPC model as in any business. Alternatively, known as ROAS (return on an ad spend), this essentially is the cost percentage of the difference between the revenue generated and cost incurred. As it is evident that the cost input and how it is defined and optimised directly effects profit, it is imperative to know the ways of achieving this.

There are several proven methodologies to optimise PPC to get higher returns of profit on investment.

• The surest way to ensure an optimum profit in a PPC campaign is to use the exact keyword or key phrase match. While some experts hail this as a limited form of advertising, if implemented properly a good ROI can be achieved.

• Sometimes advertising networks can schedule when a particular ad is run or displayed, which can result in higher customer impact and conversion to sales.

• A strategic way of optimising PPC ad campaign is by associating keywords with a negative connotation within the ads – so add negative keywords within your campaigns to avoid ads showing that are irrelevant to your organisation. This will remove spurious ads and results that are not in line with the advertising businesses’ products or services.

• Google Ads employs a tool to calculate the quality score of a PPC ad. Simply by putting more effort into fine-tuning the ad campaign and improving the quality score, greater ROI can be ensured.

• As has been iterated, there are various types of PPC advertising and not all of them are meant for all types of audiences. It is a smart tactic to build multiple promotional campaigns to address different customer demography and market share and carefully set up the ads to attract the right audience. Feedbacks and surveys can be used to good effect to implement such target-specific ad campaigns.

• A great way to optimise PPC and get improved returns is to use targeted landing pages. This essentially means that by creating a dynamic and animated video in the landing page. As a result, the customer who has been forwarded to the website by clicking on a pay per click ad will be better persuaded to complete a purchase meaning a good ROI is secured.

• Cornering the attention of webpage visitors and prospective customers is never easy. By making the keywords stand out in the ad copy in some way, advertisers can create a higher probability of sales and therefore better ROI.

• A popular PPC optimisation strategy that is in use nowadays is tracking the result of the advertisement campaigns. It is a well-established fact that just by tweaking the ads or by changing the subliminal message with a variation of focus keywords, better results can be clocked and higher ROI can be achieved.

As you can see, there are many elements involved in using paid search and PPC advertising to attract customers and people to your website. It is a skilled craft and takes time, patience and an ongoing commitment to monitor the results and ensure a ROI for advertisers. If you have read this article and have found it to be beneficial and would like to know more about other areas of digital marketing, do check out some of our other blogs and articles.

Alternatively, if you are looking for a business partner to work with and increase your ROI then call Herd Marketing today on 0151 721 1628 and let’s have a chat about we can potentially work together.

Herd Marketing – Gather Your Audience.

PS: For further information on digital marketing and to learn more about the differences between paid advertising and free advertising, be sure to learn more about this subject in our Digital Marketing Explained article.

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