{"id":22596,"date":"2019-06-20T14:23:20","date_gmt":"2019-06-20T19:23:20","guid":{"rendered":"https:\/\/www.hostgator.com\/blog\/?p=22596"},"modified":"2021-07-28T13:17:13","modified_gmt":"2021-07-28T18:17:13","slug":"how-does-ppc-work","status":"publish","type":"post","link":"https:\/\/www.hostgator.com\/blog\/how-does-ppc-work\/","title":{"rendered":"How Does PPC Marketing Work?"},"content":{"rendered":"\n

When you do a search on Google, more often than not the first results you notice have that little green square that tells you they\u2019re an 'Ad.'\u009d These are PPC ads<\/a>. <\/p>\n\n\n\n

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For anyone that does online marketing or runs a business, understanding how a PPC strategy works is a valuable way to increase your marketing skill set and find new customers. But as with many types of marketing for beginners, learning all about PPC can seem a bit overwhelming at first.<\/p>\n\n\n\n

This post will cover most of the basics you need to understand how PPC works.<\/p>\n\n\n\n

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Defining PPC (Pay Per Click) Marketing<\/h2>\n\n\n\n

First things first, you need to know what PPC even is<\/a>. The acronym stands for pay-per-click, which is a type of advertising where the advertiser only pays for each time an ad produces a visitor to your website. <\/p>\n\n\n\n

In comparison to traditional advertising channels like TV commercials or direct mail, where advertisers spend a lot of money to reach as many people as possible and hope some of them pay attention and convert, PPC marketing provides a more cost-efficient model to businesses. <\/p>\n\n\n\n

With pay-per-click advertising, you know that every dollar you spend is tied directly to someone taking action to learn more about your business or products. <\/p>\n\n\n\n

Most of the time when someone talks about PPC, they\u2019re referring to those ads that show up at the top of the page in Google, but that\u2019s actually only one small subset of what PPC refers to. pay-per-click advertising is also common with social media platforms, the ads you see on YouTube, and the banner ads that show up on popular websites around the web. <\/p>\n\n\n\n

How Does PPC (Pay Per Click) Marketing Work?<\/h2>\n\n\n\n

To understand how pay-per-click marketing works, it helps to break it down into some of its main components.  <\/p>\n\n\n\n

How PPC Auctions and Bidding Work<\/h2>\n\n\n\n

One of the most important parts of PPC is how payment works-after all, the very name most people use to describe it references an aspect of the billing process. PPC platforms use an auction system to sell ad placements. Advertisers create ads, specify where and how they\u2019d like them to show up and define how much they\u2019re willing to spend.<\/p>\n\n\n\n

Because it\u2019s a bidding system, how much you spend will directly relate to what ad placements you get. The platforms base what they charge on how competitive certain placements are. <\/p>\n\n\n\n

For instance, a popular keyword that shows purchasing intent, like 'accounting software'\u009d will be worth more than a long-tail keyword that shows educational intent, like 'tips for tracking my spending'\u009d-although both might be valuable for an accounting software company to bid on.<\/p>\n\n\n\n

There are a few key concepts and advertising terms<\/a> that will help you better understand the auction and bidding process.<\/p>\n\n\n\n

CPC<\/h4>\n\n\n\n

CPC stands for cost per click<\/strong>. Just like it sounds, it\u2019s the amount you\u2019ll spend each time a person clicks on your product ads. <\/p>\n\n\n\n

PPC platforms provide an estimated CPC for certain keywords and ad placements, so you can make informed choices about where to invest your budget and how much to commit to your campaigns. <\/p>\n\n\n\n

Be aware that the estimates won\u2019t always be exact, it\u2019s the platform\u2019s best guess based on how competitive the keyword has been in the past, and amounts are subject to change day-to-day based on how many people are vying for those spots. But they give you a good idea of what to expect, and you can set a maximum bid for each keyword or campaign so you don\u2019t inadvertently pay more than you\u2019re comfortable with. <\/p>\n\n\n\n

Quality Score<\/h4>\n\n\n\n

While every PPC platform is out to make money from advertisers, they also value delivering a good experience to users. For that reason, they value relevance in the ads they show. Along with budget, one of the main factors platforms use to determine which ads win the top placements is quality score<\/strong> (Facebook calls it a relevance score, but it\u2019s essentially the same thing).<\/p>\n\n\n\n

The quality score is determined based on factors like your ad\u2019s click-through rate (CTR), the relevance of your ad to the keywords you\u2019re targeting, and the relevance of your landing page (determined based on user behavior once they click). <\/p>\n\n\n\n

In other words, if your ads don\u2019t perform well, not only does it mean you\u2019re spending money on worse results, it also means your future performance will suffer due to having to pay more for worse placements. <\/p>\n\n\n\n

Ad Rank<\/h4>\n\n\n\n

Your ad rank<\/strong> is where you show up in the PPC results. This is particularly relevant for ad placements where multiple ads show up in a row, as with on the Google search engine results page (SERP). Ad platforms have an algorithm that determines ad rank based on the amount an advertiser is willing to spend on the bid, along with the ad\u2019s quality score. <\/p>\n\n\n\n

In other words, if you have a competitor with a good quality score willing to spend more per click, they\u2019ll show up above you for that keyword. But if the same competitor\u2019s quality score is low and yours is high, you may be able to win a higher rank even with a lower bid. <\/p>\n\n\n\n

Maximum Daily Budget<\/h4>\n\n\n\n

No marketing department has unlimited money. Auctions can be tricky, since spending more is often the best way to assure you get the placements you want, but you also need to keep your ad spend under control to keep from going under budget. In addition to clarifying a maximum CPC bid you\u2019re comfortable with, you can also set a maximum daily budget<\/strong>. <\/p>\n\n\n\n

The ad platforms will bid on the relevant placements for you throughout the day-for as long as you have remaining budget-then stop once it\u2019s tapped out. <\/p>\n\n\n\n

Be aware that if your maximum daily budget is too low for the keywords you want to target, you risk running through it within the first few hours and missing out on some of the prime times of day for getting clicks. Make sure it\u2019s not too high for you to stay within your budget for the month or quarter, but not so low that you miss out on the best opportunities for reaching your audience. <\/p>\n\n\n\n

Manual and Automatic Bidding<\/h4>\n\n\n\n

Anyone that does paid search has two options for the bidding process: you can handle it manually, or you can let the platform do much of the work for you. Manual bidding <\/strong>can be a good choice for PPC professionals who are well versed in the process and have time to monitor campaigns throughout the day. <\/p>\n\n\n\n

For most businesses who do PPC though, it\u2019s more practical to stick with automatic bidding<\/strong>. With automatic bidding, the platform\u2019s algorithm will automatically select the bids based on what past data suggests will get you the right results. If you don\u2019t have time to monitor your accounts full time or the skills to make the best choice in every campaign, then automatic bidding is the more practical choice.<\/p>\n\n\n\n

What is PPC Targeting?<\/h2>\n\n\n\n

One of the big benefits of PPC<\/a> is that it allows you to reach a huge portion of the world\u2019s population. Most people in the United States<\/a> are on at least one of the main social media platforms, and most of those people visit social media sites more than once a day. One survey found that 97% of people<\/a> use search engines at least once a day. <\/p>\n\n\n\n

But most marketers don\u2019t need to reach everyone with their product ads. <\/p>\n\n\n\n

You get more value from your advertising if you\u2019re able to get it in front of the right<\/em> people-those most likely to buy your products or services-instead of all people. PPC platforms provide extensive targeting options to help you effectively do that. <\/p>\n\n\n\n

In particular, you can use four powerful forms of PPC targeting.<\/p>\n\n\n\n

1. Keyword Targeting<\/h4>\n\n\n\n

For any advertising to work, you need it to show up for someone in your target market at the time they\u2019re looking for what you\u2019re selling. With tactics like billboards and commercials, you\u2019re playing a numbers game and hoping for the best-if 100,000 people see that billboard today, hopefully at least one of them needs the product featured on it.<\/p>\n\n\n\n

But with PPC, keyword targeting<\/strong> ensures that every ad will only display at the moment someone is actively searching for what it sells. That vastly increases your chances of reaching the right person at the right time to land a conversion. Keyword targeting is therefore a huge part of PPC. <\/p>\n\n\n\n

Any good PPC strategy will include keyword research to learn which terms your audience is using, how competitive they are, and what the average CPC for each term is. With that information, you can craft your PPC campaigns to target the keywords that will bring in the most ROI, and analyze your results as you go to refine your keyword strategy based on what\u2019s delivering results. <\/p>\n\n\n\n

2. Geographic Targeting <\/h4>\n\n\n\n

Another key targeting option available with PPC campaigns is geographic targeting<\/strong>. If you run a local business, you only need your PPC ads to reach people in the particular community you serve. Even if you have a global or national business, you may want to create different ads for people in different areas based on the language or cultural trends common in each place. <\/p>\n\n\n\n

Geographic targeting lets you limit the audience for each ad campaign based on city or state, so you only pay to reach the communities relevant to your ads. <\/p>\n\n\n\n

3. Audience Targeting<\/h4>\n\n\n\n

Marketing tactics are generally more successful when they\u2019re focused on a specific buyer persona<\/a>-the description you develop of what your ideal customer looks like. With PPC audience targeting<\/strong>, you can use the audience categories PPC platforms create based on the extensive data they have to only display ads to the people that best match your personas.<\/p>\n\n\n\n

You can target different campaigns at different audiences, and tailor the ads in each to better appeal to the specific people that will be seeing them. <\/p>\n\n\n\n

PPC platforms provide audience targeting categories that include:<\/p>\n\n\n\n