PPC or pay-per-click advertising is an advertising model that allows online marketers to place their ads on an ad platform, and then pay the platform’s host whenever someone clicks their ad. The main objective of PPC ads is to guide the person who’s viewing the ad to click through the advertiser’s app or website. Here, the visitor is can choose to complete an action, like purchasing a product or subscribing to a service.

Some of the most common advertising platforms for PPC ads are search engines. They allow advertisers to display the ads that are relevant to that people are searching for. Certain advertising services like Bing Ads and Google AdWords normally operate with RTB (real-time bidding), where an advertising inventory is sold in a private and automated auction, with real-time data.

How does paid search work?

Whenever a search engine results page (SERP) has an ad spot, a prompt auction happens for that keyword. Several factors, including the quality of the ad as well as the bid amount, determine the winner who will feature at the top spot of the search engine results page. Such kind of auctions is what keeps PPC in motion.

Typically, auctions stat when a person searched for something on their preferred search engine. Now, if there are advertisers who are interested in displaying ads that are related to the user’s search query, there’s an activation of an auction depending on the keywords that the advertisers have placed their bids on. The ads that appear on top of the search engine results are the ones that win the auction.

For advertisers to participate in these auctions, they must use accounts on platforms such as Google AdWords to create their ads, and then determine where and when they want these ads to feature. Their accounts are divided into campaigns for easy management, as well as reporting of product types, locations, or other important categorization. The campaigns are then divided into ad groups that contain the relevant ads and keywords.

Keywords

These are the backbone of PPC advertising, as they connect advertisers to the users’ search queries. It’s important to note that keywords function as general concepts for a wide variety of search queries that are predisposed to errors like misspellings.

• Search queries – these are the definite words that users key into the search box of any search engine when searching for results.
• Keywords – these the terms/phrases that marketers use when targeting users by matching their search queries.

It is possible for advertisers to match search queries with less or more precision, but this depends on the types of keyword matches they use.

For instance, an advertiser can opt for an exact match of keywords with search queries, or give leeway for variations like diverse word orderings, addition of related words, or different spellings. Also, you can have negative keywords, and these can prevent the ads from being activated by any search query that contains those words. Mostly, this is done by advertisers who don’t want irrelevant keywords.

Ads

Your PPC campaigns should include ads, alongside the chosen keywords. These ads are included within the ad groups targeting a shared group of keywords, and they are organized using common themes. The ads are what the users see whenever an auction is won—and this stresses the importance of getting them right from the beginning.

A good ad should have the following:

• Headline
• Description
• URL

The ads can show up on search engine results pages—either at the top of the search results or at the bottom of the page. Experts recommend advertisers to test their different variations of ad copies to see which perform the best. Platforms like Bing Ads and Google AdWords offer features known as ad extensions, which boost the appearance of an ad.

Examples of these features include:

• Call extensions – which add a phone number to an ad during business hours
• Sitelink extensions – this feature populates ads with extra links to different pages on a website

Ad extensions are amazing as they boost the visibility of ads. To do this, they make the ads more engaging to users, as they give out more information about the ad.

Budget and Bids

For advertisers to participate in an auction, they must decide how much they want to spend on a particular keyword. Mostly, they can do this using:

• Bids at the keyword level or ad group
• Budgets at the campaign level

Advertisers can set their budgets at the campaign levels, and these budgets can be surpassed on a daily basis. However, advertisers cannot overspend their monthly budget. Moreover, advertisers should set their budgets depending on their general account strategy—but there is a better way to control their spending, which is through bids.

Every ad group should have bids, but keyword levels bids can override ad group level bids. The definite amount paid by an advertiser depends on the competitor’s activity as well as ad rank, but not the maximum bid—this is determined by the RTB system.

Ad Rank

Winning the auction is far much better than having the highest bid. There is one thing that every advertiser should note—search engines usually look at other factors when determining the ads that should feature at the topmost spot on the search engine results page. Every search engine has its own way of considering other elements in order to determine the ad rank. Google, for instance, considers the following:

• Bid amount
• The search context—like the time of the day and the user’s device
• Format impact—whether it has extensions that boot the ad’s format

Quality score

This is a metric used to determine the relevance of an ad, and it includes the following components:

• Historical CTR
• The relevance of the keyword to that ad
• Quality of the landing page
• The relevance of the ad and keyword to the search query

Ad relevance is essential—the higher the ad’s Quality Score, the lower the CPC. Advertisers should note that they can be punished by a search engine for bidding on keywords with low Quality Score—this can be either by showing the ads a few times, even then they have high bids.

This shows the importance of advertisers having relevant and engaging ad copies, which include high-volume keywords. Moreover, they shouldn’t overlook the quality of the landing page.

Targeting

The only thing that allows advertisers to display their ads to relevant target audiences is by using the right keywords. However, there are other targeting options that advertisers can use to optimize their campaigns. These options include:

• Location
• Device
• Demographics
• Day and time

This allows advertisers to target users who like using mobile devices in the evening, or users under a certain age bracket and in a certain geographical area with the aim of optimizing the performance of their ads.

The above targeting options are very valuable since different variations of ad copy can perform better in one group than in another. Also, it is possible to exclude or target past visitors to a site who follow up searches using some marketing tools that support more specific ad copy messaging, as well as adjusted budgets. Bids can also be automatically adjusted for certain keywords, depending on the targeting options. This, in turn, allows advertisers to have more control over their spending and traffic by bidding whenever their customers are more valuable to their businesses.

Conversions

The main objective of all this work is not to earn clicks alone, but also to get conversions. These are the ultimate actions that advertisers want their users to complete once they click on their ad—and they depend majorly on the advert.

It’s very important for advertisers to track conversions for them to know whether their PPC campaign is performing well, and how many conversions can be credited to paid search instead of other marketing campaigns. Some platforms like Google AdWords normally track conversions via a snippet of code which is embedded into the source code of the conversion page—this code is normally reached after conversion is successful. The main purpose of the conversion code is to collect conversion data.

Advertisers should note that conversions tend to be tricky. Certain conversions, such as phone calls normally happen offline, instead of online. This means that they need some extra work to set up. Also, conversion paths can be more complicated than just a simple click on an ad, as well as a direct purchase. Most of these conversions include multiple website visits and searches, and that’s the reason why it’s important to factor in the set of rules that regulate how conversions are allocated every step of the way.