What is PPC? In this article, let’s define basic concepts and understand how they could help advertise your business, especially on Google.

What is PPC?

PPC stands for pay-per-click. Pay-per-click is a pricing model for online marketing where an advertiser pays each time its ad is clicked on.

The best-known platform for pay-per-click ads is Google Ads (formerly Google AdWords). Other platforms include Microsoft Advertising (formerly Bing Ads), Facebook Ads, Outbrain, and Taboola. However, because of Google’s dominance in search engine traffic, when you hear people talk about PPC, they’re generally talking about Google Ads.

What is Google Ads?

Google Ads is Google’s online advertising platform. Ads appear on the top and bottom of Google’s organic search results. While ads look similar to organic search results, they are delineated by a small label that reads Ad.

Your ads may also appear on Google properties such as YouTube and Google Maps, and third-party websites such as blogs and mobile apps. In these introductory conversations, however, we’ll focus only on the ads found on Google’s search engine.

How does Google Ads work?

The relevant parties: advertisers and users

When you use Google Ads, you become what we’ll refer to as an advertiser. Every advertiser bids on a set of keywords. Keywords are terms you think your potential customers might use when searching for your products or services. If an advertiser is the owner of a sushi restaurant, for example, she might bid on a keyword like sushi restaurants nearby.

Whenever a user (someone who visits Google to search for something) enters a query that matches your keyword, Google automatically runs an auction of all the advertisers targeting that keyword. Google judges the auction based on how relevant the ads are to the search query and a number of other factors. Google awards the “winners” higher ad placement on the SERP, or Search Engine Results Page.

Cost-per-click

The advertiser is only charged a fee when a user clicks on the ad. The cost per click (CPC) varies with each auction based on factors such as relevance to the search query and competition. Due to these variations, you’ll generally look at your average cost per click across a certain time frame. CPCs vary widely across different verticals, so you’ll need to do some research to get an idea of how much paid clicks on Google may cost you.

What are the benefits of using Google Ads?

Targeted customers

If you’re old enough to remember, it used to be vital for businesses to have an ad in the phone book. Anyone going to the phone book to look up the number for a sushi restaurant, for example, was likely motivated to eat sushi. You wanted your business to be considered at that critical moment when they’re looking.

In the same way, Google is the internet age’s phone book. It’s where people go for information, and these people are the most qualified customers to target because they’re looking for what you’re offering and are the readiest to buy it.

As an advertiser, you can control the geographic regions (down to the ZIP code) where your ads show, adding another dimension to customer targeting.

Budgeting controls

Another benefit of using Google is there is spending flexibility built into the system. This enables your business to advertise on Google even on a tight budget. Using various settings, you can control how much you want to spend. For instance, you might only want your ads to run during business hours, or only advertise to people using certain devices like smartphones. You also set a maximum CPC bid that, in essence, tells Google that this is the most you are willing to pay for a click to your website. You also set a daily campaign budget to help make your ad spend predictable.

Advanced reporting

Online advertising with Google Ads offers many valuable metrics to help you evaluate the success of your campaign. Conversion Tracking is especially powerful to see whether your ads are driving online sales, phone calls, file downloads, email subscriptions, or other goals. Google Ads may also be integrated with Google Analytics for even more detailed reporting.

What is PPC? – Takeaways

  • PPC stands for pay-per-click, a pricing model when an advertiser only pays when his ad is clicked on.
  • The most popular PPC platform is Google Ads (formerly Google AdWords).
  • Google Ads show alongside (or more specifically, on the top and bottom of) organic search results.
  • Advertisers target keywords that potential customers might use.
  • When a user types a search query that matches your keyword, you are entered into an auction of advertisers. The winners are judged based on several factors and are awarded higher placement.
  • The advertiser is only charged when the user clicks on the ad. The cost per click is determined with each auction.
  • Some of the benefits of using Google Ads is that customers are highly targeted, many flexible options help you control your spend, and detailed reporting can help determine how your campaign is performing.
Kim Kohatsu
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