An Extensive Introduction to Pay-Per-Click (PPC)
For those of you who are still in the early stages of exploring your options for building your brand and business online, you’ve probably come across the words ‘pay-per-click advertising’ or some variation thereof in your travels.
And while the concept of ‘pay-per-click’ is pretty self-explanatory, there are a lot of intricacies that go into developing and maintaining a successful campaign.
So before we go down that rabbit hole, we’re going to use this article to address the most basic question first:
Is pay per click advertising the right channel for your business?
PPC: The Basics
Businesses generally make an average of $2 revenue for every $1 they spend on AdWords.
As I mentioned, the concept of ‘pay-per-click’ doesn’t really need a definition on its own. It’s more or less what it sounds like: businesses and advertisers only pay for their ads when they receive a click or, in some cases, 1,000 impressions (a method known as CPM, or cost per thousand, which we won’t be covering today).
The most popular platform for PPC is Google AdWords, which, as of April 2017, has a market share of 77% (Source: Smart Insights).
AdWords breaks down accounts to the following levels:
- The overall campaign, where you create your ad groups and set up essentials such as bids, budgets and targeting.
- Ad Groups
- Groups of similar keywords and ads. For example, a clothing store running an AdWords campaign could make a campaign entitled Shirts, broken down into ad groups such as Dress Shirts, T-Shirts, Sweaters, etc.
- The search terms you want to trigger your ad when entered by users into a search engine such as Google. Users can also add negative keywords to ensure their ad is not triggered by specific irrelevant search terms.
- The ads users see when a keyword search triggers them. Ads include two headlines, a description and a URL to display to the user.
You’ve seen these ads, whether you know it or not. For most searches, especially those focused on making a purchase, they’re the results that appear at the very top of a search engine’s page.
See? You recognize those.
And look at that: we’ve already arrived at the first potential benefit of PPC. Using the world’s biggest search engine, a successful search campaign can potentially (key word, no pun intended) propel you to the top of page one the same day you launch it.
But fair warning: it’s not always that simple.
Scaling things back a bit, let’s look at what actually goes into getting your ad to the top of page one.
Both your ad and the page you’re sending people to with it must closely match the context of a user’s search. The more spot-on your ad text, landing page copy, and call to action (i.e., directing a user to do what you want them to, like make a purchase), the higher your chances of a top spot.
Yes, this means constant tweaking & experimentation – that’s the nature of PPC.
Cost Per Click Bid
Remember when we clarified that pay-per-click means you only pay when users click on your ad? How much you pay depends on the maximum cost per click you set when you create your campaign: that’s the most you’re willing to pay for a click. If it’s lower than bids from other advertisers, your ad won’t show.
It’s also extremely important to note that cost per click alone does not guarantee a top spot. It’s just as essential to follow the rules of a relevant ad and landing page.
Quality Score is a keyword-based metric used by Google to determine the, well, quality of keywords and ads. The factors that go into this include the relevance (yep, that word again) of an ad to user’s search and the maximum cost per click bid. Quality Score is also incredibly important because of the role that it plays, in part, to help determine your…
This is the Big Thing when it comes to if and where your ad shows up.
Whenever a user conducts a search that could potentially trigger your ad, as well as your competitors’, all of your ads enter an auction. Your Ad Rank is the metric that determines where, if anywhere, your ad should appear for that particular search.
As mentioned, both cost per click and quality score are factors that help determine Ad Rank. A third factor is your ad extensions (don’t worry, we’ll get into these a bit later) and the “expected impact” they may have (i.e., will more or less people click on your ads because of them?
The Cost of a First Page Presence
So now you’ve got a decent idea of both the potential benefits of an effective PPC campaign (first page results = more of an online presence = more clicks = more conversions) and the work that goes into achieving this accomplishment (meeting user’s needs and constant campaign maintenance).
Yes, it’s a trade-off. But given one of the biggest complaints of SEO is just how long it can take to see real results, if you’re looking for a fast track to the first page and are willing to put in the time and effort (or have the means to hire someone to), PPC might be more up your alley – at least to start.
And A Few More Potential Benefits of PPC
Having crossed the most obvious one off our list, let’s take a look at some other noteworthy benefits of running a successful pay per click campaign.
Depending on your industry, the quality and relevance of your ads, and the overall scope of competition, you might be looking at some of the lowest costs and highest ROIs your business has experienced with PPC.
Imagine paying $1.50 for a click that leads to a $1,500 sale. Short of free marketing, you simply don’t see those kinds of returns anywhere else.
Ad Extensions (Google AdWords)
Used effectively, these can be a huge boon to your PPC presence.
In a nutshell, what ad extensions do is allow you to beef up your ads with a few extra details your customers may find useful. There are different ones for different goals, but just about every type of business can benefit from at least one of these.
Here’s a rundown of the different types of extensions you can slap on your search ads:
- Location Extensions
- These allow you to display your business’s location, a call button for users to phone you, and a link to your business details page. They include affiliate location extensions, which are used are used to help users find stores that sell your products. They also include callout extensions, which are used to add unique selling points to your ad, such as “free delivery”.
- Callout Extensions
- These allow you to add unique selling points to your ad, such as “free delivery”.
- Call Extensions
- These allow you to add a phone number or call button to your ads, so users can call your business directly from the search results page.
- Message Extensions
- These give users the option of sending you text messages directly from your ad.
- Sitelink Extensions
- These allow you to link users directly to specific pages on your website, such as “Hours”.
- Structured Snippet Extensions
- These allow you to showcase information that potential customers will find most valuable, such as brands you carry.
- Price Extensions
- These show users your product or service prices directly in your ad.
- Review Extensions
- These allow you to add quotes or rankings for your business from published sources.
- App Extensions
- These allow you to encourage users to download your app.
As you can see, the list is pretty – I’m just gonna say it – extensive. But carefully choosing the right ad extensions for your business needs can make a huge difference in the impact your campaign has.
For instance, if you’re looking to increase foot traffic to a specific store, location extensions can help push potential customers to visit or arrange a visit by using the call button on your ad.
As a bonus, they don’t cost anything extra, either: ad extensions are just another part of your Google AdWords account.
That’s a pretty sweet deal for so many ways to give customers a whole whack of compelling reasons to click your ad, call your business, visit your store or download an app you’re promoting.
Traditional methods of advertising don’t exactly make targeting impossible – if you bought ad space for a new tent you’re carrying in an outdoor adventure magazine, chances are the right eyes will see it – but it can often feel like casting a wide net.
Targeting is a major benefit of pay per click advertising. You can really narrow down the audience you’re trying to reach, from multiple countries to a specific postal code.
As an example: if you run a business with a national presence and are opening a new store in a specific city, you could set up an AdWords campaign designed to send foot traffic to that store and target it only to the geographical region in which the store’s potential customers are located.
One of the best things about PPC also happens to be one of the most frustrating things about traditional forms of advertising: how we can measure results.
Using AdWords as our example again: one thing Google does very, very well is data, and there’s no shortage of it here.
When you run an AdWords campaign, you get access to just about every key success metric that matters. Whether your goals are increased traffic, leads, downloads or sales, AdWords lets you know just how effectively your campaign is helping you reach them.
It gets better: you can boil down your metrics to keywords, ads, ad groups or campaigns as a whole. This means you can perform a multi-level analysis on your account.
For example, if you weren’t satisfied with performance but found your ads were doing just fine, you could check your keywords to see if you needed to add or remove any based on traffic and conversions.
Here’s a look at some of the key metrics you can measure:
- How many people clicked your ad.
- How many people saw your ad.
- Click-Through Rate
- The percentage of people who clicked your ad after seeing it. Determined by calculating clicks / impressions * 100.
- Average Cost Per Click
- The average you’ve paid for a click on a keyword or ad.
- The overall cost of a keyword or ad based on the number of clicks.
- Average Position
- Where your ad is appearing, on average, in Google search results.
- How many successful conversions you’ve received from your campaign, such as leads or sales.
- Conversion Rate
- The percentage of people who converted after clicking your ad. Determined by calculating conversions / clicks * 100.
- Cost Per Conversion
- The average amount a conversion from your campaign costs you.
If you’ve had issues with a lack of measurability from past advertising attempts, you should be salivating right now.
PPC may involve a lot of moving pieces, but there’s no better way to measure performance and return from any other form of marketing.
PPC: A Final Breakdown
I realize that this is a lot just to make a few simple points with regards to the relevance of PPC for your business, so let’s boil things down based on what we just read.
Is PPC right for your business?
This is, of course, ultimately a decision you’ll need to make based on the research that I assume brought you here.
But we asked the question, and we’re doing to do our best to give you an answer. Here, then, are the potential benefits of pay-per-click advertising we’ve covered in this article, summed up as neatly as possible:
- Easy Account Structure
- Multiple campaigns for different categories (i.e., products or service lines) can be easily set up with separate budgets, ad groups, and goals (i.e., leads vs. sales).
- Faster First Page Presence
- If getting to the top of Google is your goal and you’re either not doing SEO or are still in its early stages, a quality PPC campaign can be a huge help in improving your web presence while you work towards more long-term search goals.
- The more relevant and higher quality your ads are, the less you’ll pay for a click. If those clicks turn into conversions, you could be looking at some serious ROI.
- Offer Potential Customers Relevant Information
- With the benefits of ad extensions, you can provide users with several different value points. These may include brands you carry, where your store is, or a click-to-call button to get in touch immediately.
- You can get extremely specific with who you target for a PPC campaign, making it a very attractive medium for businesses who are trying to reach more niche audiences.
- Superior Measurability
- The sheer amount of data that PPC campaigns provide is a goldmine for marketers, advertisers and business owners. Being able to view relevant statistics such as clicks, conversions, and costs at a micro level can make it much easier to improve campaigns that are not performing up to par.
- Meet Multiple Goals
- Whether you’re looking to increase downloads, leads, foot traffic or sales, a PPC campaign can help you do any or all. They can easily be set up to lead users towards whatever goals you’ve set up. Moreover, the data that comes with them makes it easy to continuously improve your goal conversion rates.
So there you have it: a very long-winded introduction to pay-per-click advertising and the potential benefits that come with it! If you want more, our June Round-Up can offer some valuable insights on PPC as well.
I sincerely hope that if you’re just starting to explore the idea of PPC, you found this guide valuable. As you may notice, there’s a lot that goes into it. A quality campaign requires a good deal of care and attention on the daily. But, the results that it can deliver are worth the extra time and energy.
Questions, concerns, or general curiosity about how PPC or how Reach Digital can help you with any next steps? Drop us a line today and let’s talk about your goals!