What is Pay Per Click Advertising (PPC)?

PPC or Pay Per Click – campaigns give your business a boost by advertising your services on search engines such as Google and Bing. You know those links that often come at the top of your search results, which say ‘Ad’ underneath and sometimes have star ratings? Those are PPC ads, and every time someone clicks on one the business pays a fee, hence the name ‘pay per click’. The ads that you see on social networking sites are also often PPC ads, and in recent years have transformed the way that companies spend their advertising budgets. One advantage of PPC is that you spend as much as you’re willing to, so you can start small and grow your campaigns based on the feedback you get.

Using PPC ads increases your visibility in a fast and effective way, and when used skilfully can lead to much higher conversion rates. Other benefits include building brand awareness, having clear, measurable targets, and being able to tailor your target audience for each ad. In this guide, we’ll take you through everything you need to know about using PPC for search engines, including AdWords, as well as going into detail about ads for Facebook, Instagram, Twitter and LinkedIn. We’ll also take a look at some statistics on click through rates and offer some guidance on common mistakes to avoid.

PPC Terminology

As with any technical marketing campaign, PPC has specific terminology that can be a little confusing for newcomers. In order to learn about PPC with confidence, and to avoid being intimidated by unfamiliar terms, it’s a good idea to familiarise yourself with some of the terminology before you start. Then, when you come to set up your own PPC campaign, the process will be much smoother because you’ll already be clued up on everything you need to know. Below you’ll find the basic terms that we think all PPC beginners should know, along with jargon-free explanations for each one. Knowing these is the first step to building a successful PPC campaign.

Ad Extensions

Ad Extensions are bits of information you can add on to your standard PPC text ad. They include your company address, phone number, more page links and product images. Ad extensions are useful for customising your PPC strategy for your business, for example, a shop is more likely to include an address, while an online retailer is more likely to feature images.

Google Ad Extensions

Google Ad Extensions

Ad Position

This refers to where your ad displays on a search results page, and is determined by the amount you bid and your quality score. There are around 10 paid ads per search results page, with first position being at the top of the first page of search results. The better and more popular the advert the more prominent the position will be, which in turn increases the amount of clicks you receive as well as lowering the cost of the advert to you!

Adwords Ad Position

Google Adwords Ad Position

Click Through Rate

The click through rate (CTR) is a measure of the effectiveness of your PPC campaign, and is determined by dividing the number of clicks received by the number of impressions received. CTR is also used to determine the quality score of a keyword. By having high CTRs and quality scores, you can achieve a higher ad position at a lower cost.

Conversion

This is any action that a user undertakes on your site, which you deem to be more valuable than them simply visiting and leaving. Often referred to as ‘goals’, conversions include filling in web forms, watching videos, following social network profiles and, of course, making purchases.

Conversion Rate

The conversion rate is one way of evaluating the performance of your PPC campaign. It can be calculated at the keyword, ad or landing page level, and is done by dividing the number of conversions by the number of clicks.

Worldwide conversion rates

Impression

The term impression refers to an individual placement of an ad on a page, be it on a search engine or a social networking site. An impression is an estimate of the number of people a particular advertisement is reaching, and may be counted in different ways depending upon the way the ad is situated on the page, as well as the number of times the web page where the ad appears is shown. Ad reports list the number of total times of impression of the ad, which basically counts the number of times that the ad was served by the search engine when the keywords that the ad is connected to were searched for.

CPM

CPM stands for cost per thousand Impressions (the M is the Roman numeral abbreviation for 1,000.) CPM is one of the most common ways of buying digital media. You essentially pay for every time your ad loads on a page or in an app.

CPC

CPC stands for cost per click advertising. Here the advertiser pays when a click is made on an ad. Some advertisers prefer to buy CPC versus CPM because they believe they only pay when someone is interested enough in the message to want more info.

CPL

CPL is short for cost per lead, meaning that the advertiser pays when a lead form is completed and submitted. CPL is common in B2B marketing, where it is unlikely that someone will make a purchase immediately.

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CPA or CPS

Cost per acquisition or cost per sale. Here the advertiser pays only if a purchase is made. This is relatively low-risk way to buy media because the advertiser only pays when revenue is driven

CPI

In mobile app marketing, CPI refers to media programs where the advertiser pays for every installed app. Lots of app marketing is purchased CPI, because it is a fast way to drive installs.

Quality Score

A quality score is a rating of the relevance of your ads, and is higher if you bid on terms that are relevant to your site, as well as if your ads include keywords that are also present on your landing page. Higher quality scores result in high ad positions, which encourages advertisers to only include relevant information and avoid spamming.

Advert quality score factors

ROAS

This acronym stands for Return on Ad Spend and is similar to ROI, as it is the revenue generated for each pound you spend on ads. It is sometimes used to compare the performance of two different advertising strategies. Ensuring that you understand your ROAS can be very important when trying to understand the overall profitability of a given marketing strategy or campaign.

Bids

Most advertising platforms employ a bidding strategy for their adverts. That means that multiple advertisers will be bidding on a keyword and the ones that is willing to pay the most will have their advert shown. Other factors such as the quality of the advert the click through also play a factor in this. But it is important to understand that you are in essence entering an automated auction when deploying your budget for adverts.

Remarketing

Remarketing is a clever way to connect with visitors to your website who may not have made an immediate purchase or enquiry. It allows you to position targeted ads in front of a defined audience that had previously visited your website – as they browse elsewhere around the internet. Most of the time this is on either Facebook or websites running Google adverts.

 

Using PPC for Search Engines

If you’re a newcomer to PPC and wondering where to start, paid ads on search engines are most likely the best starting point. For some businesses, this will make up their entire PPC campaign, whereas others may eventually focus more on social networks. In order to maximise the reach of your business, it’s best to have both, but starting with search engines will give you a good grounding in how PPC works. In this section, we’ll discuss both Google Adwords and Bing, explaining how each one works and helping you to avoid common mistakes that many advertisers make.

To make your PPC campaign as successful as possible, you’ll need to transfer some of your knowledge and understanding about SEO. If you don’t currently have an SEO strategy, you’ll need to address that before you make a start on PPC. Optimising your site for search engines is a highly effective way of improving traffic, and as it isn’t advertising you don’t need to pay for it. A key element of your SEO strategy will be keywords, and you’ll need these for your PPC campaign too, so make sure you’re clear on what they are before you start.

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Google Adwords

The most common type of PPC campaign is an Adwords campaign. In an Adwords campaign, you create themed ad groups, which contain all of your PPC ads. Each ad group has a list of keywords, which should be closely related and relevant to every ad in that group. For example, a sportswear retailer might have ad groups for ‘women’s shorts’, ‘men’s shorts’, ‘football shirts’, ‘rugby shirts’, and so on. Each of these groups should have up to 30 keywords associated with it, and a selection of ads that are strongly targeted to a specific customer. For larger businesses with big budgets, you might have multiple PPC campaigns for product categories, whereas smaller businesses might focus more on their bestselling products.

 

Now, have you got your keywords ready? Good, because they’re going to be important. To help you figure out which keywords to target, Adwords has a built-in keyword planner. It provides search data, forecasts estimated traffic and even suggests bid amounts. Perfect if you’re just getting started on your PPC campaign. There are also a number of alternative keyword planners available though.  In Adwords, there are a few different options for how your ads are matched up with the search queries users enter. Which one you choose will determine who sees your ads, so it’s essential that you choose carefully.

adgroups and campaigns

How It Works

Adwords has a relatively user-friendly format, and when you create an account you’ll be guided through the process of setting up a campaign. It’s a good idea to plan in advance what your campaign(s) will be, and what your ad groups will be. When you create an ad group, you’ll be asked to enter your keywords for that specific group of ads. This is where you need to make sure that your ad groups are strategically organised, so that your keywords are 100% relevant. In Adwords, there are three different options for matching the keywords in your ads to users’ search queries:

  • Broad match, the default option, targets your ads at any synonymous or similar search terms, according to Google’s algorithms. You can make this slightly less general with broad match modifiers.
  • Phrase match, which targets queries that include a specific phrase or close variations, but always in the same the order as they appear in your ad.
  • Exact match, as the name suggests, targets only search terms that are identical to your keyword, but allows for misspellings and plurals.

Varying your keyword match option is very important, as it allows you to change the specificity of each of your ads. While it might be tempting to always choose broad match, which has the widest net, this is not the best strategy for improving your conversion rates. This is because you’re likely to be targeting a lot of people who are not intending to buy your product. By being more specific about your keywords and who you’re targeting with your ads, you increase the chance that someone who is ready to buy will see your ads.

AdWords-Keyword-Match-Types

 

When you write your ads, make sure that you include your keywords in a relevant, natural way. If you don’t, Google will know. You’ll also be asked to enter your campaign budget and how much you’re prepared to pay per click. As you might imagine, higher bids mean that your ads will get a better placement. Once your ad has been placed, it will be given an ad rank. This shows the position of the ad on the page, and is calculated by a number of factors, including the amount you bid for the ad and the ad’s quality score. As mentioned previously, quality score is determined by the relevance of your ad to your website and your use of keywords.

Common Mistakes

Although setting up a PPC campaign on Adwords is relatively simple, there are some common mistakes that beginners often make. Luckily, we’re here to tell you what they are, so you can avoid them and create a successful campaign. One of the most common mistakes newcomers to PPC make is going for the top keywords. The most popular or general keywords might seem relevant, but competition for them will be so high that smaller businesses are unlikely to get a look in. Instead, choose long-tail keywords that are far more specific, such as “size 10 white football boots” instead of “football boots”.

Another common mistake is failing to update your ad text. You should be constantly optimising and updating your ads to make them as relevant and engaging as possible. Simply creating an ad and then leaving it for months will not yield great results. The same goes for updating your keywords according to which are performing well and which are not. You should also make use of the ‘negative keywords’ feature, which allows you to filter out search terms that Google may think are relevant to your ad but actually are not. For example, if you sell men’s jackets but not formal jackets, you can make ‘formal’ a negative keyword, so that your ad doesn’t show up when someone searches for ‘men’s formal jackets’.

Understanding AdWords Bidding

The key to how Google AdWords works is the Quality Score. Quality Score is generally how well an ad group, keywords, ad, and landing page relate to what a person is searching for, and how likely someone is to click on the ad.

Ad Rank = Quality Score * Bid

Ads are placed in order based on Ad Rank. The highest Ad Rank gets the top spot and so on down to either the last ad qualifying for the auction or the last position on the page. Here is where it really gets interesting; the person in the top spot could actually pay LESS than the people in the spots below them.

Your ad rank and price - wordstream graph

http://www.wordstream.com/articles/what-is-google-adwords

PPC for Bing

Although Google is by far the most popular search engine, Bing does have some dedicated followers, as well as its own PPC system, Bing Ads. Many businesses choose Bing Ads over Google Adwords because there’s less competition and the ads are cheaper. If you’re a small business with a modest budget, you might consider trying Bing Ads and seeing if it has more of an impact than an Adwords campaign would. Bing Ads works in a very similar way to Adwords, and it even has some extra features that Adwords doesn’t.

On Bing Ads, you can set time zones for different ad groups, which is ideal if you’re targeting customers in different countries. You can also target to different devices, such as tablets and mobiles, and exclude some devices if you wish to. When it comes to targeting different demographics, you have much more control and can even exclude specific age groups and genders from seeing your ads.

Bing Adverts

How it works

Creating a PPC campaign on Bing Ads is very similar to creating one on Adwords, which means you don’t have to worry about learning how to use two very different systems. An immense advantage of Bing Ads is that it allows you to import your existing Adwords campaigns, so you don’t have to go through the process of making them all again. If you’re using both Adwords and Bing Ads, be sure to take advantage of this time-saving option.

Just like Adwords, Bing Ads has its own keyword research tool, which allows you to find out the volume of searches for each keyword. Then you can use the keyword planner tool, which is very similar to the one on Adwords, to select the right keywords for your campaign. At this stage of the process, you can also refine who sees your ads by selecting different languages, time zones and age brackets.

When you’re ready to build your Bing Ads campaign, you’ll be asked to give it a title, and then to create different ad groups within the campaign. Make sure you plan these in advance, considering how you’re going to link the ads in each ad group, so that your campaign has a coherent structure. Then you need to write the content for your ads, making sure that it is relevant, accurate and, most importantly, engaging. Ask yourself if you would click on the ad if you saw it in your search results. If the answer is no, start again.

Common Mistakes 

The same mistakes advertisers often make in Adwords also apply to Bing Ads. However, there are some that are specific to Bing and how you use it alongside your Adwords account. One common mistake is to run exactly the same campaigns on both Adwords and Bing Ads, with the same keywords and the same budget. Although you should certainly make use of Bing’s import tool, remember to edit your campaigns so you can take advantage of the lower competition and lower prices that Bing offers. On Bing Ads, you can bid on more popular search terms that you might not bid on with Adwords due to the high level of competition. You might also reduce your budget slightly, so you’re effectively getting the same number of clicks for less money.

You can sign-up for bing advertising here with up to £100 worth of spending. 

 

Using PPC for Social Media Networks

 Social media PPC advertising is a relatively new area for marketers, but in the past few years the revenue and popularity gained from social media ads has skyrocketed. It is now an absolutely essential part of any digital marketing campaign, and has the added bonus of being extremely user friendly. Most social media networks have designed their ad platforms with everyday users in mind, rather than PPC specialists, so if you’re not very confident when it comes to social media, don’t worry.

Social media PPC is in essence very similar to PPC for search engines, in that you create an ad, you provide a budget and you control who sees your ad. You can also easily track the success of your ad by analysing click through rates and the reach of your ad, meaning how many people see it. PPC for social media also offers the opportunity to engage with your audience through likes, comments and shares. You can draw customers in with attractive imagery, humour and genuinely useful content, rather than just straight-forward ads. As you’ve probably noticed, there are quite a few different social networks with their own individual advertising platforms, so let’s take a look at the most popular ones.

 

PPC for Facebook and Instagram

Facebook’s advertising platform has become the number one social media marketing tool in recent years, thanks to its intuitive interface and high level of impact. As Facebook owns Instagram, their advertising platforms work in essentially the same way, which is great news for marketers. You can even create Instagram ads on Facebook’s ad manager, making it much easier to post the same ads on both platforms. On these social networks, you can post image ads, video ads, carousel ads and slideshow ads, which gives you a lot of options to engage potential customers and get creative.

Facebook-and-Instagram

How it Works

Creating an ad using the Facebook ad manager is pretty easy, although it does require you to create your content in advance. To create a successful ad, you need to carefully select which images or videos you’re going to use as ads and write engaging copy that will really stand out. Social media networks are packed full of links crying out to be clicked on, so you need to find a way of persuading users to click yours. Once you’ve planned your ad, you can upload your content to the ad manager and preview it to make sure it looks just right. You can sign-up for Facebook adverts here

When it comes to selecting your demographics, Facebook offers you a lot of control over who sees your ads. As well as selecting specific locations, genders and age groups, you can target users with particular interests, behaviours and connections. This hugely increases the chances that those who see your ad will click on it, like it or comment on it. For each ad you create, you’ll be asked to provide a daily budget, just like you would for Google Adwords. Once your ad has been posted, you can track its progress by looking at click through rates, numbers of likes, comments and shares, video views and website conversions. You can then use these to improve the performance of your next ad, experimenting with different types of content.

Common Mistakes  

Although Facebook’s ad platform is relatively easy to use, there are still some common mistakes that newcomers make. One of these is creating the same type of ad that you would for Adwords or Bing Ads. On social networks, most people are looking for content they can engage with, and are often turned off by traditional sales tactics. They’re there to be entertained, not necessarily to buy things, so your job is to entertain them and encourage them to engage with your brand. This builds brand awareness and trust, which may then convert into sales further down the line.

Another common mistake is to not test out which of your posts is most likely to generate interest before you turn them into ads. This is very easy to do, and could save you a lot of money over time. All you need to do is to keep track of which of your social media posts receive the most interest from your audience, and then use the same type of content in your ads. You can even boost your most popular posts to extend their reach even further.

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PPC for Twitter

If you’ve put some time into developing your social media channels, you’ll know that Twitter is a great tool for promoting your business and creating a strong brand image. Twitter’s open platform allows you to interact with users all over the world and, while it might not have the same reach as Facebook, it does have some unique marketing tools that you should be using to your advantage. Twitter Ads offers more flexibility than Facebook does, and allows you to target groups so specific that your chances of succeeding are quite a bit higher. All in all, it’s a worthwhile part of any PPC strategy.

Twitter Logo

 

How it Works

Twitter Ads works in a slightly different way to other PPC platforms, as you don’t necessarily pay for clicks, but for performance. Each campaign you create should have a set intention, whether that is to gain followers, have more website conversions, or get people to download an app. With Twitter Ads, you pay when people take your desired action, rather than just when they click. This means that you can be sure that your money is going on real, measurable engagement. Speaking of money, it’s worth noting that Twitter Ads often offers cheaper rates than Facebook, sometimes allowing you to bid as little as three pence.

Setting up a Twitter Ad is similar to using Facebook Ads, so if you’ve used that already then you won’t have a problem navigating your way around. One thing to take note of is Twitter’s keyword targeting tool, which allows you to specifically target people who have used a particular word or hashtag in their updates. This is the highest level of specific user targeting you’ll get on any social media network, so it’s definitely worth taking advantage of. You can also target your ads at users who have recently engaged with your previous Tweets, in other words, people who you know are already interested in what you have to say. This tool is called Tweet engager targeting, and it’s a real game-changer for PPC campaigns.

Common Mistakes 

The options available to you with Twitter Ads are so specific that the most common mistake newcomers make is getting intimidated by them and then failing to use them. At the prices that Twitter offers, it’s worth playing around with the different tools to see what works best for you. The same goes for not using hashtags and images to your advantage, as Tweets that include images receive a lot more engagement than those that don’t. Finally, remember that you should be using multiple Tweets in your campaign, as Twitter doesn’t promote a Tweet more than once as part of their user experience policy.

You can get access to twitter adverts here: https://ads.twitter.com

 

PPC for LinkedIn

Perhaps the most overlooked platform for marketers is LinkedIn, as its professional nature leads many to mistakenly believe that it is only suitable for B2B advertising. On the contrary, LinkedIn is a growing network of almost 500 million users, many of whom are individuals with a range of interests. Of course, LinkedIn ads do need to be relevant to the platform, so it’s not for everyone, but you’d be surprised at how making use of the LinkedIn ad system can help you to target very specific groups of potential customers. Be aware that LinkedIn adverts can be very expensive. So it is important that you pay a lot of attention to the target audience and what action you want them to take in order to get their details. Landing pages with download options often work best for sponsored posts. Whilst short messages with a highly relevant benefit work best for sponsored InMails.

linkedin-advertising-b2b

How it Works

When setting up an ad on LinkedIn, you have two options: create a new ad or create a sponsored post. Sponsored posts on LinkedIn work in a very similar way to boosted posts Facebook, taking content that is engaging and promoting it to further users. Creating an ad is pretty straightforward if you have experience with Facebook and Twitter ads, which you should have before you consider using LinkedIn. You can use video content and images in your LinkedIn ads, which is good practice for maximising engagement across all of your PPC campaigns.

Being a professional social network, LinkedIn offers a unique set of targeting options that relate to users’ job titles, places of study, places of work and skills. This can be very useful if you’re advertising a course or event. When it comes to paying for your ads, you can either pay per click or per 1,000 impressions. It may come as a surprise that LinkedIn’s prices can actually be higher than those of Facebook or even Google, but don’t let that put you off. If you can create a highly targeted ad and put it in front of a highly targeted audience, you’re much more likely to get a better ROI for your campaign

Common Mistakes

When using LinkedIn, the most common mistake advertisers make is taking the same approach that they would with Facebook, or another platform. This is very unlikely to have positive results, as the campaign simply won’t be relevant. Take the narrow reach approach and tailor your LinkedIn ads to a very specific audience, taking advantage of the platform’s unique options. You should also seriously consider whether LinkedIn is relevant to your business at all, as you shouldn’t feel obliged to use it just because it’s there. Putting yourself in the user’s position can help you to decide whether your campaign will be worth it. You can access Linkedin adverts here

 

Why Choose Pay-Per-Click Ads?

Why choose PPC ads? Because you are reaching the people you want to reach where and when you what to reach them. Display ads can be shown on specific websites that relate to your business, and search ads appear at the top of the search engine results.

  • On average, 41% of clicks go to the top 3 paid ads on the search results page. (Wordstream)
  • For high commercial intent searches (someone looking to buy a product) paid ads get 65% of all clicks. (Wordstream)
  • The average click through rate for an ad in the first position is 7.94%. An average click through rate is 2%. (AccuraCast)
  • PPC visitors are 50% more likely to purchase something than organic visitors. (Unbounce)
  • 65% of B2B companies have acquired a customer through LinkedIn paid ads. (HubSpot)
  • One company increased their PPC ROI by 2.5 times with Facebook remarketing. (AdRoll)
  • Search ads can increase brand awareness by 80%. (Google)

Some more Pay Per Click Stats

  • Across all ad formats and placements, the ad click through rate is 0.05%. This is equivalent to 5 clicks per 10,000 impressions.
  • Rich media ads have a click through rate of 0.1% across all platforms.
  • Click through rates for Google Adwords and Facebook can exceed 1%.
  • Full banner ads have a click through rate of just 0.04%, while large rectangle ads have a click through rate of 0.33%.
  • Facebook ads have an average click through rate of 0.1%, while Twitter ads have an average click through rate of between 1% and 3%.
  • The highest performing industries on Facebook ads are legal and retail, with average click through rates of 1.61% and 1.59% respectively.

What Makes People Click and Convert?

  • 46% of people can’t identify paid ads on the search results page. (Wordstream)
  • Social and mobile gaming video ads have a 91% viewing completion rate. (CMO)
  • Consumers are 27 times more likely to click through online video ads than standard banners. (CMO)
  • 69% of searchers that are mobile call a business straight from Google search.
  • 36% of searches on Google are associated with location.

 

Summary

There are many different options and opportunities when it comes to developing your PPC campaign, and which you choose will depend on the specifics of your business. By starting with Adwords, you can master most of what you need to before branching out to social media advertising platforms. The key is to track your campaigns closely and to constantly update your ads so that they are as relevant and engaging as possible. Make use of all the tools available to you and you’ll learn how to create successful PPC campaigns that contribute to your overall marketing strategy.

Additional resources

Here are some excellent guides for even more information on PPC marketing:

 

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PPC Guide 2017 Cover