How Does PPC Work? Your Guide to Pay Per Clicks

Did you know that paid advertising returns $2 for every $1 spent? That’s a 200% return on investment rate!

If you’re not implementing a pay-per-click (PPC) advertising campaign, your business is falling behind.

PPC is a form of digital advertising. It differs from traditional advertising because, rather than buying ad space, you only pay a fee each time someone clicks your ad.

So, how does PPC work? Keep reading to find out.

What Is Pay-Per-Click Advertising?

While there are several types of PPC ads, the paid search ad is the most common.

Paid search ads appear when people use a search engine, especially when they’re looking for something to buy. PPC ads are triggered by all searches, whether it is someone on their mobile phone looking for a late-night eatery, someone looking for local services, or someone planning to buy a gift.

With the PPC model, you’re only charged for running ads when a user clicks on them. This is where the name “pay-per-click” comes from.

Banner ads and remarketing are also forms of PPC advertising.

Is PPC Right for Your Business?

There are several factors to consider before determining whether PPC is right for your company. When assessing your advertising needs, weigh these questions:

• Do we have a budget for paid advertising? If not, can we afford it?
• Would your efforts be better spent on amplifying your organic reach?
• If you have a paid search budget, is it best to spend the entire amount on PPC, or should you explore other tactics?

PPC is only effective if you’re targeting people who are searching for keywords related to your product or service. Your overall budget will be determined based on your audience, competition, and industry.

How Does PPC Work to Increase ROI?

Having your ads show adjacent to search engine results is not a “you get what you pay for” scenario. If that were the case, the top brands would dominate paid search.

Google and other major search engines use an automated process called the Ad Auction to determine which ads should appear on their search engine results pages (SERPs).

Keywords play a key role in pay-per-click advertising. To increase the chances of your ad displaying, you must bid on specific keywords.

Let’s say your business sells athletic wear. Someone looking for new running shoes could enter “top running shoes” into a search engine.

As they submit their search query, Ad Auction gets to work implementing complex algorithms to determine which ads to display. Ad Auction then uses these equations to determine the order in which it shows the ads.

SEO is extremely important in paid search, as you should only bid on keywords specific to your product or service. Invest in a keyword tool or SEO agency to help you find the perfect keywords likely to drive sales or increase conversions for your business.

For example, if you’re in the tourism industry, you’d look into tourism SEO strategies to get the most ROI from your ad spend.

Ready to Grow Your Business Through PPC?

Now you can answer, “How does PPC work?” and get started growing your business with a successful paid search account.

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