Pay-per-click
noun
a system used to set prices for online advertisements on a search engine or other website, by which the advertiser pays a small fee to the website publisher each time a user clicks on the advertisement.
source: dictionary.com
Ever since the digital marketing boom began, marketers have been scrambling to figure out the most effective ways to connect with consumers. Search advertising, most prominently Google Ads, quickly became the preferred strategy. Pay-per-click (PPC advertising) is a form of paid digital marketing where advertisers pay a fee each time their ad is clicked.
Marketers have expanded their strategies to include other channels and tactics. But pay-per-click, PPC, has continued to be an essential digital marketing tactic across all brands and strategy.
What is pay-per-click?
Pay-per-click campaigns are usually synonymous with paid search campaigns. This is where the advertiser pays a fee each time someone clicks on an ad, rather than paying per-impression or per-acquisition.
So is paid search and pay-per-click the same thing?
For simplicity’s sake: Yes! Although if you researched that exact question, you’d get more vague results. Pay-per-click, keyword advertising, paid search advertising—they’re all pretty much the same thing except for a few tactics that don’t fit within each other (and that aren’t used as often). As mentioned, Google Ads is the most widely-used platform for PPC campaigns, but advertisers should also keep it in mind to consider other search engines and platforms like Bing or Amazon, aka sponsored posts.
So how is pay-per-click a digital marketing metric?
Simply put: Pay-per-click (PPC) is a digital marketing metric where the advertiser pays a set amount per click.
The goal of PPC is to lead the person viewing it to click through to the advertiser’s website or app, where that visitor can complete a valuable action, such as purchasing a product. Monitoring and reaching an ideal PPC goal can help you optimize all your campaigns.
But wait, how does pay-per-click work?
Primarily, you–the business–advertise your content online so that a curious consumer can stumble across your greatness without trawling all the way to page five of Google. It provides a more accessible avenue to click through onto your site and maybe even fill in a form or shop around for a product.
Pretty good, right?
Right. But, there’s a price you pay. Every time your business serves an impression (i.e., every time your advertisement pops up on their computer screen) and someone clicks on your ad, you pay a fee, aka cost-per-click. Quite simply, if someone sees your advertisement on their screen and they click through, you’ve outcompeted other advertisers and have won.
Most PPC ads are delivered by placing bids, which would include the paid results at the top of Google’s search engine results pages (SERPs). Marketers bid on terms that are desirable and relevant to their businesses. Search terms that lots of companies want traffic for are more expensive, while less desirable times are cheaper; a successful campaign will balance CPC with the potential and expected revenue. This system allows advertisers to reach consumers at a price point that fits their budgets.
However, it is not only about money. Google’s #1 priority is always the quality of the search results. To that end, Google Ads selects which PPC ads to display based not only on the bids but also on who it believes will do the best job of serving the searcher’s needs, aka the consumer.
When a consumer searches, Google Ads selects ads based on their Ad Rank, a combination of their CPC bid amounts and the quality and relevance of their target keywords and campaigns, which is known as a quality Score. A lot of factors go into the quality score, including click-through rate, the relevance of each keyword in the ad group, landing page quality and relevance, the importance of ad text, and your historical Google Ads account performance.
Many different platforms use a PPC model, which includes Facebook, Twitter, LinkedIn, Bing, Yelp, Amazon, and more. However, Google is, of course, the most common platform. Google captures a whopping 78 percent of the US search ad revenue.
I always get PPC and CPC confused. What’s the difference?
Ah, acronyms.
PPC describes the pay-per-click buying method. CPC, or cost-per-click, is a performance metric that represents the cost of a PPC campaign. Although they go hand-in-hand, the two are not mutually exclusive.
PPC advertising with Google Ads works with search engines and allows businesses to bid on popular keywords their target audience is searching.
Cost-per-click describes a data point when measuring the success of digital advertising. The only payment metric for PPC is CPC, but CPC can apply to other types of digital advertising campaigns outside of PPC. For example, CPC is a standard performance metric to look at for a display or social campaign.
Would you pick programmatic advertising over pay-per-click advertising?
Programmatic advertising can drive your pay-per-click strategy forward under its ability to add new consumers to the conversion funnel. Targeting top-of-funnel display audiences through programmatic advertising to create initial awareness provides a unique chance to convert them through the paid search channels.
Tapping into new audiences can lead to an increase in both branded and non-branded searches, which means your overall PPC traffic and resulting conversions will continue to improve.
Why does it matter?
In digital marketing, it is essential to look at the whole picture before picking one strategy over the other. Tying your programmatic advertising and pay-per-click advertising together, you’ll begin to have increased awareness throughout the different stages in the funnel. As a marketer, you are staying top-of-mind throughout the consumer’s journey. This will lead to higher brand perception and improved performance in both your branded and non-branded searches later in the funnel.
Why? Because of the quality of your branding and prospecting audience is increased. Consumers are served relevant messaging while they are traveling through the consumer journey, which will ultimately lead consumers to have a higher recall of your brand when actively researching in your industry.
Now that you’re a PPC genius, curious to know what CPA means, or what the process behind RTB looks like?
