PPC: AdWords, Auctions, Facebook Targeting | Why You Should Care?

Posted on 24.10.16 by Dave Gregor in Pay-Per-Click clock 4 min read

 

PPC Defined

PPC stands for pay-per-click, a model of internet marketing in which advertisers pay a fee each time one of their ads is clicked. Essentially, it’s a way of buying visits to your site, rather than attempting to earn those visits organically. (Source)

In Other Words

PPC is not a traditional marketing technique. A business enters an “auction” to be seen in the first few results on the search engine results page (SERP). The business only pays money if the visitor actually clicks the link. Every time the ad is clicked, the business pays a fee.

Example: A user inputs a search for “running shoes”. The results come in, and the user picks a website that they want to visit. They end up at Nike.com. Now Nike has to pay a fee because the user clicked on their ad. Let’s say the fee is $6, then Nike pays the $6, but the user might end up purchasing 2 pairs of shoes and some socks. Let’s say it costs them $275. Nike just made $275 off of a $6 ad! A return of $269! (math skills…)

Here are some stats

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In 2015, Google's ad revenue amounted to almost 67.39 billion US dollars. (Statista.com)

This should tell you that PPC is a big market. It means your competitors are likely utilizing this tool and you should too.

PPC visitors are 50% more likely to purchase something than organic visitors. (Unbounce)

With organic results, they tend to get a higher quantity of visitors. However the type of visitor you get from your paid ads, are a more likely conversion. This person is likely a little further in the buyer’s journey.

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Does this sound like you? “People come to my store because the customer service experience I provide. I don’t need to advertise online.”

I don’t disagree with you about people coming in to see you for the experience, but so many people these days search the web for good products and experiences before even stepping foot in your area. . Even if you take pride in being old-school and really just love your brick and mortar storefront, you should still be taking advantage of digital marketing. Looking at youtube demos, written reviews, and online specs are just a few ways that I do my research. But you can be sure that people are using Google to know whether or not to even step foot in your store.

Google AdWords

Google AdWords is the most popular form of PPC. It’s used all around the world and is an industry staple, unless of course you’re from China. Adwords is a platform that enables companies to advertise on Google and other Google entities.

AdWords has mastered algorithms that allow companies a fair shot at competing with the big companies. If your site is high quality, you don’t necessarily have to be forking out the same amount of money as the top dogs. Put forth some cash and create high quality user experiences, then you’ll have a chance in the auction.

Auctions

For every search query, there is an auction that takes place. Google looks at it’s pool of advertisers for each keyword. Advertisers identify keywords they want to bid on, and how much they are willing to spend (“max bid”).

*Note: Google doesn’t necessarily take exact words. For example: If you search “kid’s birthday entertainment”, Google will also consider businesses that have “entertainment for kids” as their keywords.

How It Works

There are two main factors that affect where your ad will go in the rankings: Max Bid and Quality Score.

Ad Rank: (how high up your ad will be)= Max Bid x Quality Score

Obviously, the “max bid” is the highest amount that you are willing to spend in order to get your ad in the rankings and clicked on.

Your “quality score” is used to decide how relevant and useful your ad is to a user. Ultimately, Google wants to provide a good service to the user by bringing up the most relevant and useful links. Some attributes that they look at are click-through-rate, relevance, or landing page.

Obviously if you have a higher quality score, you will appear higher.

After calculating the Max Bid x Quality Score, Google declares it’s “winners”. And there you have it, the Google AdWords Auction. Now keep in mind Google processes over 40,000 search queries a second. Translating to over 3.5 billion searches per day. That’s a lot of auctions!

If you are visual learner, here’s what 40,000 searches a second looks like: http://www.internetlivestats.com/google-search-statistics/

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Facebook Ads

Facebook advertising is a big piece of this puzzle. As you may know, there are many people on Facebook (1.7 billion and counting), so this means your reach is huge. The other thing is that people spend a lot of time on Facebook (1.13 Billion are daily users). So if you run a targeted ad for 7 days, you can be sure that your target audience sees it as many as 7 times if not more. I once bought a watch from a Facebook ad, and I was probably exposed to their ads for several month before buying, but every time I saw the ad, it moved me closer to my purchase.

Speaking of targeted ads, that’s the bread and butter of Facebook. Because people share so much information on their Facebook, we can know a lot about them. Which means we can create ads that are very specific, and make sure the ads are only being shown to the right people. Example, if your Facebook profile says you are married, you will not get ads for engagement rings, but if it sees you’ve been in a relationship for a certain amount of years, then you may just find some ads engagement rings that say “just ask her already”. (I know, kind of scary in a way, but as a business, this is huge!)

Some things Facebook allows you to target are location, demographics, interests, behaviours, connections and marital status.

Practical Summary

Screen Shot 2016-09-14 at 11.21.29 AMPPC is a main pillar of digital marketing. That’s not up for debate. Making sure that you understand what PPC is and how it works is the first step. It’s pretty likely you will be consulting an agency who specializes in PPC to get your PPC work done, so make sure you know what they are doing for you.

Pair your PPC with a great SEO strategy and you’re set to start seeing your website traffic crank up tenfold.

 

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About the author Dave Gregor