Pay Per Click: 101 – A Complete Guide to Pay-Per-Click Marketing Basics

Pay-per-click marketing can be a tough nut to crack for a beginner, and even experts can have a hard time with it every now and then. PPC is complex and can lead to negative ROI just as easily as it can result in success.

There’s a lot to learn about using PPC effectively, from ad formats to ad networks, CTR and so much more. This guide provides in-depth information on everything you need to know to get going with PPC marketing. Learning the essentials is crucial for any search engine marketing professional, whether you’re new to it or have been working in the field for a while.

If you are marketing a business and are looking to raise your conversion rates this guide is the place to help you get started with paid search advertising.

Why is PPC such a powerful advertising tool?

With PPC, you’ll be in a good position to achieve diverse marketing and business goals, from sales on your e-commerce platform to high-level exposure for your brand. It allows you to track your conversion goals and can help you nurture the middle of the sales funnel through content entries, seeking newsletter signups and advertising content downloads.

PPC is:

  • Highly specific; PPC makes it easy to be specific. It lets you answer questions such as: what is the goal? Why does it matter? Who is involved? Which resources are needed?
  • Easily measurable; one of the major issues with advertising and marketing is that results aren’t always easy to measure. It’s different with PPC because it becomes easier to measure the relevant metrics such as conversion rate, click-through rate and cost per conversion with the help of Google Analytics and Google Ads.
  • Relevant and adaptable; PPC is a useful tool for just about any kind and size of business and it’s one of the most effective ways to convert prospects.
  • Timely; In little time, you can get the exposure you need.
  • Flexible; You have a great deal of control over how you reach prospects.
  • Easy to integrate with other marketing channels and strategies, including content marketing and SEO.
  • Highly targeted; PPC offers several ways to target potential customers.

What Are the Best PPC Ad Networks?

All PPC ad networks may carry ads, but that doesn’t mean they’re all alike. The different options makes it possible to reach a wide audience. The question you should be most concerned with is “Which PPC ad network is appropriate for my business?” The ones we’re most likely to recommend generally are:

  • AdRoll
  • Bing Ads
  • Facebook
  • Google Ads (the biggest and often the best)
  • LinkedIn
  • Pinterest
  • Twitter
  • Yahoo Gemini

The most well-known ad network is no doubt Google Ads, based on how many searches the Google search engine processes daily (3.5 billion) and the number of sites registered on the Google Display Network (GDN). Google Ads puts your ads on the search engine as well as YouTube, mobile apps, shopping and GDN web placements.

After Google, the most popular search engine is Bing and their share of desktop searches is actually growing faster than Google’s. Without having to start afresh with Bing Ads, you can simply import your Ads campaigns. However, any imported campaigns must be optimised for the Bing platform if you want the best results.

AdRoll is a retargeting platform that leverages several exchanges and marketplaces, including emails, Google and Facebook Exchange. For Yahoo, native and search ads are served on the company’s properties and Oath Network, including AOL and Yahoo, as well as the other websites that fall under their umbrellar.

With 2 billion monthly users, Facebook is fantastic, especially since you can get very specific with behaviours, interests and demographics. Placements include Messenger, Instagram, Facebook and Audience Network on mobile apps. LinkedIn, Pinterest and Twitter are also useful platforms that can help drive results.

How Do You Develop a PPC Strategy?

For any successful campaign, there must be the solid foundation of a strategy. To develop a strategy, you’ll need a goal or several goals. If your goals are not clear from the start, then you’ll need to take some time for deeper consideration. Your goals should be in line with the fundamental sales funnel of awareness, consideration and purchase.

Every business has its own sales funnel, so you need to customise your own strategy accordingly. If your sales cycle much longer because you’re a B2B software company you’ll need a very different strategy to if you sell blue widgets?

The first step in a winning strategy is to create brand awareness. Due to their many targeting options, social media PPC ads are ideal for branding, as are search campaigns with wider-range keywords. You may see irrelevant click-throughs and higher cost-per-clicks with this approach, but you can make it work by using negative keywords and smart keyword match types.

Moving to the considerations phase, consumers tend to be more specific and detailed with their search queries. With remarketing, you can get the prospect to look at the product they looked at before. As for leads who are ready to buy, search queries are likely to include words that indicate higher intent, such as coupons, financing, discounts, shipping information and so on.

Why is Quality Score Important?

Your quality score strongly affects the effectiveness and cost of your paid search campaigns. Google uses it to determine how much to charge you per click as well as the relevance and quality of your PPC ads and keywords.

Your quality score is determined by a number of factors, including how your Google Ads account has performed in the past, how relevant your ad text is, the relevance and quality of your landing page, how relevant a keyword is to its ad group and your CTR.

By taking the time to improve your quality scores you’ll be increasing your chances of getting a higher ROI because you’ll have both a lower cost per conversion as well as a lower cost per click.

You can increase your quality score by improving the quality of your keywords, ads and landing pages. You should have a continual improvement process in place, consistently investing in keyword research and organisation, adding negative keywords, optimising landing pages and refining your ad copy. With improved quality and more specific ads and content it will be easier to target the audience that’s most interested in what you have to offer.

Why Is Click-Through Rate (CTR) Important?

Your click through rate measures the number of clicks you get on an ad relative to the number of impressions. It’s important to pay attention to your CTR because it affects your quality score and the amount you pay for every click on your ad. A higher CTR means that a higher number of consumers will see your ad and click on it.

A hotly debated topic is, ‘what exactly makes a good CTR?’ There’s no straight answer to this question because it depends on many factors. The ideal CTR for one campaign or even keyword may not be good for another. Some industries naturally experience lower clicks rates than other industries.

CTR is not only an indication of the relevancy of your ads, but also affects ad rank in search engines. Getting your ad to the top position isn’t simply about being the highest bidder, CTR has an important role to play.

Sometimes, it’s okay to have a low CTR. In fact, a low CTR is good in some cases. For example, if you are dealing with ambiguous keywords you only want the people you are targeting clicking. PPC success is not strictly based on CTR and ad rank. It’s more important to focus on your business metrics first. It all comes back to what your goals are.

How Do You Find the Right Keywords for PPC Advertising?

Keywords allow you to define where your ads appear. There are many different kinds of keywords and it’s important to know where your keywords fit to determine how best to use them. Some of the types of keywords include:

  • Branded keywords; including company names.
  • Generic keywords; including ambiguous keywords such as dresses.
  • Long-tail keywords; comprising more than 3 to 4 words.
  • Locational keywords; including keywords that are related to a location.
  • Transactional keywords; keywords that have both a weak and strong purchase intent.
  • Informational keyword; keywords that are targeted at people who are in search of information.

A deep understanding of keywords is important because they can give you an idea of the position the prospect is in the buyer’s journey. One mistake many beginners make is to stick to one core keyword thinking they have different keywords. The key to avoiding this mistake is to find several core keywords related to your industry. It’s also important to understand that keywords aren’t an exact match by default. Using the keyword “buy foundation in London” doesn’t mean that that’s the only keyword you’ll show up for.

Depending on what users you’re trying to capture you may have to use different keyword match types, including broad match, broad match modified, phrase match and exact match. In fact, an effective Google Ads campaign will likely use them all. Don’t forget to use negative keywords to exclude your ads from showing up in searches that have proved to drive low ROI.

How Do You Create and Structure More Effective Ad Groups?

When done right, ad groups can help you get more leads and traffic at lower costs, along with higher conversions. Landing pages, text ads, and keywords are housed within ad groups. Search engines consider the organisation of your ad groups to determine where a user lands when they click on your ad, what users see when they look at your ad and which keywords trigger your ad.

There are two primary considerations to make when you’re creating an ad group: consistency and integration. Your landing pages, ad text and keyword groups need to be closely integrated with one another, which, in turn, should lead to consistency in your messaging.

It’s important to consider where you want your ad to run, including in what languages and in what locations. Consider running them on display networks or syndication sites and not search results alone. When selecting locations and languages, it’s a good idea to research where most of your traffic will come from and if your website and organisational structure can fully support the demand you generate. Be sure to consider your reporting and budgeting needs before you finalise the structure.

Cluster your chosen keywords by theme, but, before creating ad groups out of keyword clusters, consider messaging, audience targeting and match types. Don’t be tempted to create a structure that’s too detailed or complex. Review your structure from time to time, especially when you make updates to your site.

What Should You Know About PPC Budgeting?

Your PPC budget is the amount of money you commit to acquiring online traffic. The question to consider is, ‘how much should I spend on PPC?’ The appropriate amount for your campaign can be estimated in several ways. The first step is to determine what your goal for profitability is. You should be able to determine your Cost per Acquisition, Gross Margin Percentage and Average Order Value (AOV).

If you know how much profit you want to make in a month, you can use this equation to determine how much to budget: Number of Sales * AOV * Margin – Budget = Profit.

Before you even begin planning your budget, you need to engage in keyword research to ensure that you can create a realistic budget. That way, you’ll be able to learn if your keywords of choice have a search volume that’s enough to meet your goals.

What PPC Ad Targeting Options Can You Use?

Targeting allows you to cater to users with specific messages, based on the content they’re looking at, their search behaviour and so on. There are a number of ways to achieve this. The options available include:

  • Search targeting
  • Display targeting
  • Audience targeting
  • Contextual targeting

Search targeting is the most popular type. This allows you to place your ads on SERPs, positioning your ad as an answer to the query which the user is searching for. Display ads run on the GDN, but are divided into two main categories: audience and content. Audience targeting means you want to be seen by users who display certain characteristics, while contextual targeting means you want to appear on sites with relevant content.

A discussion about targeting without mentioning retargeting is incomplete. To top off your efforts, engage in remarketing to target users who have encountered your brand before.

How Can You Write Copy for Extra Effective Text Ads?

The copy for your ads can make all the difference between profitable PPC and failure. While there’s no certified method of writing copy that converts, there are best practices you can adopt.

The first rule is to write for the customer and not for, or about, your brand. The customer is searching not because they want to know about your company, but because they need a fix or solution. To write for your target market, you have to know what they want.

Address your audience by using the second person pronoun; ‘you’, not ‘they’. This makes you relatable and personable. Also, don’t hesitate to use emotional appeal in your copy. If you know the needs of your target audience, it shouldn’t be a challenge to play up the emotions connected to the core desire that draws prospects to you.

Other things you can do is include statistics, address any objections to your service or product, use solid calls to action and emphasise what makes you different from the rest.

What Should You Know About Ad Extensions?

Ad extensions have a huge role to play in the success and appearance of your PPC ads. A Bing study found that mobile users are more likely to click on an ad if there are multiple kinds of ad extension. According to the data, the CTR was between 15 and 30%, which is impressively high. If you haven’t started using mobile extensions, this is the time to start. No matter how perfectly you set up your PPC account and strategy, you could be holding yourself back if you don’t invest in extensions.

Google takes the quality score of ad extensions into account when you auction your ads. Doing this lets their algorithm determine the ideal mix of extensions in a particular auction for the best possible CTR. Essentially, the algorithm helps you achieve the highest possible CTR, so it’s a good idea to focus on extensions.

Extensions which you can control in Google Ads include review, app, call and location extensions, as well as sitelinks. Those which you can’t directly control include smart annotations, communication extensions, beta extensions, Google+, consumer ratings and seller ratings.

What are the different PPC Ad Formats?

We couldn’t possibly provide an exhaustive guide on ad formats because they’re always changing. Many of the same ad formats available across Google Ads are also available across Bing Ads. They include:

  • App download/engagement ads; for apps.
  • Bumper ads; unskippable in-stream video ads.
  • Call-only ads; a mobile-only variation of the text ad.
  • Dynamic remarketing ads; responsive remarketing.
  • Gmail sponsored promotions; powered by interest and audience targeting.
  • Google Maps ads; clicks to location.
  • Hotel ads; feed-based ad units for hotels.
  • In-Stream; all kinds of video ads.
  • Lightbox ads; rich and interactive.
  • Local inventory ads; version of shopping ads featuring an inventory feed.
  • Local service ads; for limited household services.
  • Responsive ads.
  • Responsive text ads; automated text ads.
  • Shopping ads; for e-commerce retailers. Pay close attention to them because the data you send to Google is used to automate them.
  • Showcase ads; subset of shopping ads.
  • Static image ads; old but popular in GDN.
  • Text ad; basic.
  • TrueView discovery ads; video-driven variations of responsive display ads.
  • TrueView for shopping; hybrid of in-stream ads and Google shopping ads.
  • YouTube; video and display.

What Are the Most Important PPC KPIs to Track?

As in any other industry, key performance indicators can tell you how well you are doing. Determining what your KPIs should be is something that must be done right from the start, because your campaign goal should be matched to various KPIs.

Determining what you want to achieve with your campaign and how you’ll measure it helps ensure that you’re measuring performance properly. If you don’t measure adequately, there’ll be no convincing way to demonstrate ROI to your employer and clients, and it will be much harder to uncover ways to improve your campaigns. So, what are the most important KPIs to track?

  • Clicks; measure the number of people who have clicked on your ad because that’s where conversion starts. While the success of your campaign doesn’t depend on the number of clicks, you can use them to determine how you’re performing mid-month.
  • CTR; a key metric that tells you the percentage of people who clicked on your ad out of those who saw it. Look closely at this one because it can influence other KPIs, including quality score.
  • Quality score; elusive but important, because higher scores mean advertising will be cheaper for you.
  • Cost per click (CPC); an indication of how much you have paid. It can be measured by dividing the total amount spent on a campaign by the number of clicks.
  • Cost per acquisition (CPA); the amount you pay for every newly-acquired customer. It’s measured by dividing the amount spent on conversion by the number of conversions.
  • Conversion rate (CVR); measured by dividing the number of conversions by the number of clicks. It’s the reason you’d be hired to manage a PPC campaign in the first place.
  • Impression share (CPM); occurs when your ad is seen by a user, whether it’s clicked on or not. CPM lets you know how much more or less your ads are seen compared to your competitors’.
  • Average position; shows where your ad appears in relation to other ads. Can be useful for context, but not an indicator you should be too bothered about.
  • Budget attainment; a measure of how closely you come to achieving your set budget.
  • Lifetime value (LTV); an indicator of the lifetime of customers with your products or services. It’s complex and can be measured in various ways.
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