How Does Pay-Per-Click Work?

Arcalea - How Does PPC Work?

Digital Marketing involves a lot of work and can be overwhelming for someone who is not a web expert. Driving traffic to a website is definitely no easy task, especially if you aim to rank highly on Google’s organic search results. If your aim is to drive or increase website traffic, Google Adwords or a Pay-Per-Click (PPC) Campaign may work for you.

What is PPC?

PPC is a form of online advertisement for a search engine, such as Google, where you can display ads for goods and services and pay when a user clicks on your ad.

It is also referred to as keyword advertising as it involves users entering keywords for queries they type on search engines.

In a PPC Campaign, you set aside a budget for Cost-Per-Click, and pay how much you want Google to list your ads so that they are on top of organic search listings. When your budget is used up or depleted, Google will stop running your ads until you renew your campaign and replenish your fund.

In order to run a successful campaign and reach your advertising goals, it is important to know how Pay-Per-Click works. Read on below to know the basics of a Pay-Per-Click or PPC Campaign.

How Does PPC Work?

Pay-Per-Click is essentially a search auction. You can create your ads and have them bid out on different phrases. The higher the bid, the better the chances of making it to the top of organic search listings, or the Search Engine Results Page (SERP). Once a user clicks on your ad, you then pay the search engine.

For example, you bid a maximum of $1.00 on the keyword “lamps.” As the highest bidder, your keyword then appears at the no. 1 position on the SERP. Once a person clicks on your PPC listing, it will take them to your website. If a hundred people clicked on it, you pay a maximum of $100.00 for your PPC service.

Take note that the Ads Auction is an automated process that is used to determine whether the ads are valid and relevant. Aside from the maximum bid, a quality score is also used to determine your ranking impact, so it’s not just about who’s willing to pay the highest bidding price.

Best Practices for PPC

In order to make PPC work for you and make the most out of your campaign, there are a number of points that you need to keep in mind.

Set aside a budget and stick to it. Every company is different, and a sensible budget for a PPC campaign depends on your goals and current requirement. But typically, the cost allotted per click should be less than the total profit earned per click.

Make your Campaign Structure simple and relevant. A PPC campaign is managed on a daily basis and requires constant monitoring, so it is important to make it as efficient and as manageable as possible. Small groups of keywords are preferred, and ad groups must be cohesive. Make sure that your ad text is relevant to the keywords present in your ad group.

Check your PPC settings. Google Adwords has a default setting which is set to display all ad campaigns into Google and other partner/network sites. This can be a bit overwhelming for any beginner, so you may wish to opt out of this setting if you’re new to PPC. Opting out of the Google Display Network is also good for anyone who is working under a tight budget. If you’re already familiar with the Google Search Network and you have created an ad text with keywords specifically selected for this type of ad placement, then you can try this tactic.

Take advantage of local searches. By default, ad campaigns are set on a national level. However, location targeting can be customized in Google Adwords, which is especially useful if you’re a local merchant running a PPC Campaign and you want more targeted results. If you wish to target a specific geographic location, make sure your campaign is set up properly by clicking into Settings.

Track your conversions. How do you know that your PPC Campaign is working? By monitoring conversions to see whether it helps you reach your goals. Aside from sale, any kind of useful outcome of a customer’s visit to your website is a conversion, so you have to track them down. If it does not amount to anything that is measurable and useful, then PPC advertising may not be for you.

Additional Info and Resources

Running a Pay-Per-Click Campaign does not have to be complicated if you know how it works and you understand the basics. When implemented properly, a PPC Campaign can help your company achieve your goals and increase website traffic.

For more information on PPC, online advertising and other digital marketing tools and strategies, visit the Arcalea blog.

Leo Herrera is a graduate from DePaul University, with a major in Marketing Honors from the IME program, and a minor in Creative Writing. He is currently an Account Executive at Arcalea.

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Arcalea shares information, ideas, news and updates about various aspects of the industry. If you'd like to hear about a specific topic, please let us know and we'll make it a future post!

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