The Basics of Pay Per Click Advertising

ppc ads

Over 7 million advertisers invested a total of $10.01 billion into PPC ads in 2017. It’s a huge market with the potential to reach thousands of new customers.

Pay-per-click marketing is one of the most used online marketing tools. At the same time, one of the least understood.

Pay per click is one of the most effective marketing strategies when it is implemented correctly. All small business owners should at least have a working knowledge or pay per click (PPC) marketing and how it works. Even if you decide not to use it, you can walk away knowing you’ve made an informed decision.

Today we’ll be sharing part 1 of the basics of PPC marketing. We’ll walk you through basic terminology, the best platforms, and the benefits of PPC.

What is Pay Per Click Advertising? 

PPC is a type of internet marketing in which advertisers have their ad shown on a SERP and pay each time one of their ads is clicked. Essentially, it’s a way of buying visits to your site rather than trying to “earn” those visitors organically.

Every time a user clicks on the advertisement, a nominal fee is paid to the platform. Ideally, the goal is for these clicks to result in sales, so the fee seems small in comparison.

Pay-per-click advertising is mostly used on search engine results pages, like Google or Bing. It can also be used on social media platforms.

PPC Terminology

Cost Per Click (CPC)- CPC is how much you end up paying per click on your ad. This is determined by a bidding system where your ad is shown based on the maximum you’re willing to pay per click. What you actually pay is determined by the following formula:

(Competitor’s Ad Rank / Your Quality Score) + 0.01 = Actual CPC.

Keywords- Google defines keywords as “Words or phrases describing your product or service that you choose to help determine when and where your ad can appear.” These keywords are what people are typing into a SERP to discover your product or service. When it relates to PPC ads, you’ll want to make sure you pick the most effective keywords, so your page will appear at the top when users search for it.

Search Engine Marketing- Search Engine Marketing (SEM) refers to any digital online marketing, paid or unpaid, done on a search engine.

Ad Rank- This value determines the position of an ad on a SERP. It’s equal to Maximum Bid x Quality Score.

Quality Score- This is the score search engines give to your ad based on your clickthrough rate (CTR). It is measured against the average CTR of other ads. Things like the relevance of your keywords, the quality of your landing page, and your past performance on the SERP are all taken into account.

Maximum Bid- This is the highest amount you’re willing to pay per click on your ad. You can either set this number manually or through an “enhanced” method where you allow the SERP to determine it based on your marketing goals.

Ad Group- These are great for companies targeting multiple keywords at once. You can create an ad group within your campaign based on a set of highly related keywords. You can then set a CPC maximum for each ad group that you create.

Ad Text- Each ad is centered around the key text. This text should take your keywords into account to make it robust and effective.

Landing Page- The landing page is where users land once they click your ad. This can look like a dedicated webpage, your website homepage, etc. Just remember to follow landing page best practices to maximize your conversions.

The Best PPC Platforms

Now that you have a basic understanding of the fundamentals of PPC, it’s time to talk about where you can use it. There are dozens of great platforms you can use PPC marketing on. Today, we’ll be covering the most popular ones for you to discover.

Google Ads

Every hour around 227 million Google searches take place totaling 5.4 billion searches per day. With over 75% of people in the United States performing Google searches, it’s a top contender in PPC.

Pros- Since so many users are on Google, it’s a sure-fire way to find your audience. Another pro is that their ads are very user-friendly, and they have tons of great educational resources to train you before you start advertising with them.

Cons- With Google being the most popular SERP on the planet, keywords are highly competitive. It can be difficult or expensive to have your PCP ads perform well.

Bing Ads

Bing is still a powerful platform, although it’s not nearly as big as Google. In comparison, there are 5.4 billion monthly searches conducted on the Bing Network. Don’t let that number fool you, though. They have 34% of the market for online searches!

Pros- With fewer people using them for PPC, it can be cheaper and easier to reach people. Since Bing also owns AOL and Yahoo, your ads will also be seen on those platforms.

Cons- Fewer people use Bing, which means you may be missing a segment of your market.

Facebook Ads

Nearly 2 billion people used Facebook in July 2021. It’s undoubtedly a huge platform where you can find potential customers.

Pros- You can be highly specific in your targeting, which can mean more qualified leads. Since FB owns Instagram, you can also advertise on IG through their platform, streamlining your marketing strategy.

Cons- It’s no longer the most popular social media platform. Often, it’s a “pay-to-play” marketing strategy as well where companies who are able to spend more win out.


Have you ever looked at a product online before and found yourself seeing ads for it all the time afterward? That’s thanks to companies like AdRoll. It is a retargeting platform for users who have already visited a specific website.

Pros- It allows you to show your ads on both SERP and social media platforms at once. It also is powerful because it targets users who have already shown an interest in your product or services.

Cons- It can be annoying to potential customers if they see something too frequently.

The Benefits of Pay Per Click

We’ll cut right to the chase; PPC advertising has a ton of great benefits. If we had to narrow it down, though, here are the top 7 benefits to using pay per click advertising:

  1. PPC ads are cost-effective.
  2. PPC ads produce fast results.
  3. You can easily control and test ads.
  4. PPC ads allow you to target your ideal customers.
  5. Algorithm changes don’t impact PPC ads.
  6. Data from PPC ads can improve your SEO strategy.
  7. You can set a budget you’re comfortable with.

1. PPC ads are cost-effective. 

By their very nature, PPC ads are cost-effective because you control your budget! You can spend as little or as much as you’re able/willing to.

They are also fabulous because they only cost you when someone clicks your ad. This means they’re a more qualified lead and more likely to convert.


2. PPC ads produce fast results. 

Organic SEO is wonderful, but it’s a marathon, not a sprint. It takes time to build your SEO results, and some small businesses just can’t wait for that organic reach.

If you take the time to effectively craft your campaign, keywords, and ad text, you can find your ads jumping straight to the top of SERP search results immediately!


3. You can easily control and test ads. 

It is easy to control your campaign settings and make changes if necessary. You can also run various tests with different ads to identify the one that creates the highest ROI. You can then up your ads budget for ads that do well until it stops performing.


4. PPC ads allow you to target your ideal customers. 

Rather than trying to reach the masses, PPC allows you to target specific audiences. By using keywords and retargeting you can key in more heavily on users who are much more likely to convert. Some platforms, like FB Ads, allow for demographic, geographical, and more detailed targeting as well.


5. Algorithm changes don’t really impact PPC ads. 

When you pay-to-play, it can indeed pay off. Since PPC isn’t affected like organic SEO, this means they escape many algorithm changes.


6. Data from PPC ads can improve your SEO strategy. 

As you test and tweak your ads, you can learn valuable information. From which keywords work best to what phrasing and landing pages are most effective, you’ll learn how to reach your audience better. You can then take these lessons and apply them to your SEO strategy.

Your organic SEO strategy is still important! PPC and organic SEO work best when you work on both of them at the same time.


7. You can set a budget you’re comfortable with. 

Unlike magazine ads and other more traditional forms of advertising that have set costs, PPC is flexible. You can create a budget and change it as needed while you’re working on your campaigns. This freedom is something most small businesses can appreciate!

Thanks for reading part 1 of our Pay Per Click series! Next week we’ll be digging even deeper into the world of PPC advertising. We will be discussing creating your first campaign, best practices, and so much more.