What Is Pay Per Click (PPC)?

       
By Ashley Fletcher

When people are looking for something on the internet, they use search engines like Google, Yahoo! and MSN to get a list of relevant web pages.
Pay per click advertisements are placed in the search results pages.  They appear above or to the right of the main results, as shown below.
Businesses are charged each time someone clicks on their advertisement and visits their website, hence the name: pay per click.

An exceptionally targeted form of marketing

What’s remarkable about PPC is that it allows for far more sophisticated and targeted marketing.  Unlike most other media which have a scattergun approach to advertising, people searching the web are already in an
information gathering mindset.  They are explicitly looking for information about a particular subject.  This means that, if you know what your customers are interested in, you can reach them at the time they are mostly receptive to your marketing messages.


New to pay per click?

How search engines calculate their advertising costs

The amount you pay to advertise can vary from just a few pence up to twenty or thirty pounds for the most lucrative keywords, with the price determined by a complex set of factors including the popularity of the search term, the relevance of the bidder’s website and a search engine’s assessment of the site’s quality.

The difference between PPC and search engine optimisation

Search engine optimisation (SEO) aims to improve your listings in the natural (and free) search rankings.  This may include improving the design, functionality and relevance of website content so that it receives a higher quality score and hence appears nearer the top in a given set of search results.  PPC by contrast, focuses on placing adverts near search results where the searcher may be receptive to marketing messages.

The impact of PPC

• The internet accounts for 27% of people’s total media consumption – it’s higher still among young people.

• UK companies spent £1.2bn on PPC last year – a rise of 52% – representing
6.8% of the total UK advertising budget.

• In the same period, spend on TV advertising dropped by 4.7%, while radio fell 5.2% and press classified by 7.8%.

• Google UK’s income was £870m last year – more than Channel 4, Sky or Five earned from TV advertising.


How easy is PPC to use?

PPC doesn’t require detailed technical knowledge.  The principles are relatively straightforward and search engines provide a range of tools and advice to help businesses initiate and manage PPC campaigns.  PPC does however reward expertise and effort.  The most successful users of PPC have sufficient resources to monitor and tweak campaigns daily – and the experience to know how to get more from their investments.  This expertise is apparent in tackling issues like which search terms to bid for; when and where to bid; how much to pay; and how to convert those clicks into actual sales.  For this reason, many businesses use PPC specialists to help drive higher returns.


The advantages of PPC:

• Receptive customers – PPC lets you contact the people who are actively searching for information about your products and services.

• Measurable results – from click-through rates and conversion rates, to return on investment, PPC provides extremely detailed, quantifiable results.

• Responsive campaigns – which creative execution will get results?  What if a billboard campaign isn’t working?  PPC is simple to monitor and tweak, allowing you to optimise performance.

• Minimal commitment – PPC requires no contract, and campaigns can be switched on and off at will, giving complete control over your costs.

• Complements other activity – researching products and services on the web is a standard part of the modern buying process.  PPC supports other online and offline marketing.

PPC rewards expertise and effort.  The most successful users of PPC have sufficient resources to monitor and tweak campaigns daily – and the experience to know how to get more from their investments.

How well you set up a campaign has a major impact on its success.  Get things wrong at the beginning and it can undermine your campaign before it’s even begun.  A common mistake is to set up one campaign and assign a large number of keywords to it – thinking you’re covering all bases.  The reason this is a poor strategy is that Google assesses quality and relevance at many levels including by customer action, by keyword and by advert (see Strategy 5 “Build your quality score” for more).  Some keywords will inevitably perform poorly, reflecting badly on the whole campaign and damaging your quality score. It pays to take a much more granular approach, grouping your products into categories and assigning appropriate adverts and keywords for each.

The above is from Coast Digitals Pay Per Click Guide written by Ashley Fletcher, Search Marketing Specialist.

Coast Digital are an award-winning online marketing agency, offering a unique blend of creativity and digital marketing expertise.