What is Pay-Per-Click Advertising?
What is Pay-Per-Click Advertising?
August 2, 2016

As a business owner with minimum to no knowledge of digital marketing, it’s pretty easy to discount the role of online advertising, and to think that paying to appear higher in search engines means wasting money, or “giving money to Google” and getting nothing in return. 

A common misconception among non-marketers is that paid advertising is a last resort strategy, something you try only when everything else fails. But the truth is that when it comes to fast results and cost-efficient strategies of digital marketing, paid advertising in general and PPC (Pay-Per-Click) advertising in particular are absolute winners.

How Pay-Per-Click advertising works?

As its name implies, the term Pay-Per-Click defines a form of internet marketing in which you, as an advertiser, pay a fee each time someone clicks on your ads. PPC is also referred to as Paid Search Advertising (PSA) or Search Engine Marketing, and together with SEO, it’s one of the most popular solutions experienced advertisers and big brands rely on for targeting people who use search engines like Google or Bing to find what they need.

The purpose of PPC is to drive traffic to your website by convincing people to click on your advertisements. If you publish content on your website but don’t run any paid campaign, the visitors that land on your pages are considered “organic” and that traffic is called “earned traffic”. On the other hand, when you run PPC campaigns, you generate “paid traffic”. In this case, your advertisements are displayed within the sponsored listings of search engines and partner websites.

Depending on the type of campaign you create, you can be charged per click, per conversion (CPA, cost per action) or per impression (CPM, cost per thousand), and the best part is that you can always control the costs and measure the results of your campaigns very precisely.

Pay-Per-Click advertising is ideal for getting your products and services in front of potential buyers, and it’s a cost-efficient strategy for recently launched websites or pages who don’t generate enough organic traffic and wouldn’t otherwise be featured among the first search engine results. At the same time, PPC is a smart option for small and big brands who want to improve their online visibility, increase brand awareness and reach more potential buyers very fast. Sounds too good to be true, right? Well, there is a trick indeed: everyone does PPC, but only few do it well. Unless you’re an experienced PPC marketer, you may end up blindly paying search engines for ads that generate no results. 

So is PPC worth the money?

Unexperienced advertisers and marketers who aren’t very familiar with PPC or don’t know how to design a well-optimized and highly targeted Pay-Per-Click campaign may discredit this form of digital marketing and claim it is not worth the money. The truth is that as with any other form of online advertising, the results or ROI of PPC are directly linked with how targeted your campaigns are, and with your ability to reach the right audience.       

The average click-through rate for paid advertising is between 2% and 5% for competitive industries and can be above 5% for non-competitive industries, and the average conversion rate for paid search advertising is 2.7%. These numbers may seem insignificant at first sight, but data shows clicks on paid search listings beat out organic clicks by nearly 2:1 for high commercial intent keywords!

Surely, for maximum ROI it’s best to appear in the first positions in search engines for both organic and paid keywords, but the numbers above mean that over 60% of people click on paid ads when looking to buy something online. For organic search results, the first 5 positions account for 67.6% of all clicks, and positions 6 to 10 account for only 3.73% of all clicks; thus, if you’re not in the first 5 organic positions, you’re very unlikely to generate organic traffic for your website.

On the other hand, a well design and professionally managed PPC campaign can bring incredible results. A well-known case is that of a restaurant that increased their customer calls by 40%, obtaining an incredible PPC ROI of 800%! That means $8 for every $1 you invest!

How PPC can benefit your business?

  •   This form of advertising yields a high return on investment (ROI), and as a business owner you’re probably interested in generating profits, so this would be the first important advantage of PPC. Then, Pay-Per-Click advertising can give your website’s traffic an instant boost, generating immediate traffic and a significant volume of sales within just a few days or weeks.
  •   It can significantly increase brand exposure with minimum investment, reach a wide audience and improve conversions, especially if you target commercial intent keywords. PPC can rapidly show you which pages in your website aren’t converting well, so this form of marketing can help you increase not only your paid traffic and conversions, but also the organic ones, by showing you what to investigate further and what to optimize.
  •   If you’re not happy with the results, you can immediately stop a campaign or adjust it, and you can increase the PPC budget as long as it’s profitable. You can also easily spy on your competitors and steal the strategies that work for them, this advantage of PPC compared to other marketing solutions is hard to beat.
  •   You can use Pay-Per-Click advertising to test new products or collections and see where to invest a higher budget, and you can retarget visitors who didn’t convert through remarketing, so once you do a PPC campaign you can use those results and information for other digital marketing strategies.
  •   This form of advertising is suitable for any type of business and can be used by companies of all sizes, from small businesses to large enterprises. It’s perfect for time-sensitive promotions and for rapidly improving your ranking for a specific keyword.

As for the drawbacks of this solution, there aren’t too many if you know what you’re doing or hire a professional agency to take care of your PPC campaigns. Pay-Per-Click may not be profitable if your products are low-priced and your margins are very low, and may not be the best choice if you’re trying to set up the campaigns by yourself but aren’t sure how to do it correctly.

Where is Pay-Per-Click used, more exactly?

Google isn’t the only search engine where PPC is used. Although Google AdWords is the best known PPC solution, Bing and Yahoo offer paid ads as well, and you can also pay per click on Facebook, Twitter, Tumblr, Pinterest, even on Reddit!

Google AdWords paid ads for example are those that appear alongside the search engine results when you type a query in the search bar on Google, and Bing ads are the equivalent of these advertisements, but appear on the Bing search engine. On social media the rule is the same: you pay when users click on your marketing messages, so this solution is a quick way to reach a targeted audience regardless of the online medium used.

If you’d like to give PPC a try but don’t know where to start from, get in touch and we’ll gladly set up and manage the campaign for you!

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