How Pay Per Click Advertising Works for Dummies

May 31, 2017

Pay Per Click


The online part of business has become nearly impossible to avoid. Consumers today look for solutions to their problems online and take advice from friends, family and even strangers posting reviews online. But, if your business gets lost in the shuffle, you miss out on a large chunk of the digital market.


Just like your physical location has signs, billboards, flyers and other materials designed to get people through the doors, your virtual location is going to need help drawing in relevant traffic.

How Pay Per Click Advertising Works

Pay per click (PPC) advertising is a way for companies to keep a careful reign on their budget and still advertise to the people who have an interest in their products or services.


Since it takes a lot of work to get to the top of search pages and in people’s social feeds, PPC is a way for your company to be guaranteed a spot in the limelight.


Unlike traditional advertising, PPC depends on people actually clicking through to your site before you are charged.


This means that perhaps hundreds or thousands of viewers see your ad before you even pay for one. Essentially, it is like only paying for a billboard when someone actually enters your store.


The parameters for who sees the ads and what causes the ads to pop up (keyword searches, for example) depends on the platform the ad spots are purchased through.


When a user sees your ad and clicks, you are charged the going rate for that spot until your set budget is maxed out.

How Does PPC Help My Business?

PPC ads are designed to appeal to a certain consumer in your target audience and then take them to a relevant page where they can find the content they are seeking.


You can establish landing pages to keep the contents of the page consistent with the ad that the user first clicked on.


With the right wording, images, CTA and landing page, you can improve the numbers of new leads that are exploring your brand and all that you have to offer.


With PPC ads, you can bring in customers that are at various points of the sales funnel. Ads can target those who have just started exploring a problem they have and need to find solutions for, while other ads can target users who’ve already visited once or are specifically looking for products that you offer.


By using selective ads to target distinct groups in the sales funnel, you can establish landing pages that are better suited to field their particular needs and questions, personalizing the experience.

Platforms Offering PPC

Social media and search engines are the most common platforms for purchasing PPC ads.


Facebook and LinkedIn offer a lot of narrowing factors that help you pinpoint the audience you want to target with your ads.


Most social media platforms also offer the ability to sponsor content – or pay for your content to be placed more often in relevant feeds. PPC ads can also be purchased for aps, website banners, blog banners and other locations where consumers can be found browsing or searching.

Using Google AdWords

An important PPC platform to talk about specifically is Google AdWords.


When you type in a search on Google, you will notice that as many as four businesses are listed at the top with a small “Ad” box and may have ratings and links for specific parts of the site.


You probably already know these top results are paid for, but the pricing equation we will discuss is rarely talked about in depth.

Pricing and Ranking

A few years ago, the AdWords ad ranking formula changed. Your AdRank is determined by multiplying the cost per click (CPC) bid you give by your quality score.


The price of your ad is then the AdRank of the person below you, divided by your quality score plus $.01. The most important thing to note, however, is that you might be paying more per click than someone above you because you have a lower Quality score and people with better quality scores were willing to pay more.


A great AdRank can lead to saving 500% per click when competitors aren't utilizing the same AdWords strategies.


Not only does your AdRank partially determine your position, it also alters the CPC of your competitors.


And, if you are wondering what improves AdRank, Google offered on its AdWords support page, “When estimating the expected impact of extensions and ad formats, we consider such factors as the relevance, clickthrough rates, and the prominence of the extensions or formats on the search results page.”

Take Advantage of Extensions

A really big part of AdRank has shifted into taking full advantage of ad extensions.


Google stated,


“If two competing ads have the same bid and quality, then the ad with the more positive expected impact from extensions will generally appear in a higher position than the other.”


Not only do those extensions affect the AdRank number, but they can form a better advertisement opportunity for a brand.


The top position in a Google AdWords position is going to have the potential to show the most content. The ad extensions allow a spot to have more prominence as Google will show more content.


Brands need to enable all relevant ad extensions in order to take advantage of these benefits. Continually check those extensions to make sure they stay up to date.


Always use full sentences for your meta descriptions and only include valuable information that will help a lead be drawn to your site.

4 Tips for Optimizing PPC Ads

Every small business (and many large businesses) are carefully doling out the dollars to pay for all of the necessary marketing materials. The great thing about digital marketing is that it is very cost effective for the level of impact it has on the target audience.

1. Define Your Buyer Persona

Before you start, it is very important to outline who you are advertising to first.


A buyer persona should be an in-depth look at who is likely to be interested in what you have to offer and is also in a position of making a purchase decision.


The targeted consumers may hold a position of influence in their company or might simply hold the power to purchase for their own household, depending on whether you are a B2B or B2C company.


Defining those target customer types is important because it will help you narrow down the best channel, the problem you are addressing and the best way to communicate your solution to get the click through.

2. Determine CPA

You have to have some concept of what you are willing to pay for each new customer in order to set a reasonable budget and strategize effectively.


Start by determining what the average customer is worth to your business. Then, from that number, determine how much you are willing to spend to get those sales.


Now, not every lead is going to convert into a customer, so you have to include non-converted leads into the price paid for each conversion—or cost per acquisition (CPA).


So, if the average customer is worth $100 to you and you are willing to spend $50 to get that customer, then $50 should be your max CPA. And, if out of every 10 leads you get 1 conversion, then you should have a max pend of $5 per lead.

3. Strategize Your Targeting

The great thing about PPC ads are that they can pinpoint specific types of visitors that are at different points along the conversion funnel.


You can use location, time, language, previous activity and more to target exactly who you want to get to a specific landing page.


You should establish a content calendar that helps you organize your campaigns and track your efforts.

4. Test Your Message

Use unique landing pages for each PPC ad and start trying to understand what works better for your customers on a given platform.


PPC offers an easy way to test content and get to know what is converting the most effectively. Simply rearranging a headline or moving a picture can change the results of how people click through and convert on your page.


Paid search and PPC are a low-cost way to draw in new leads and keep a tight rein on your advertising. While tracking every dollar you spend, you can carefully analyze metrics to help your process improve.


PPC is an important way for a small company to focus on making the most of a vast online community.

Will Cartwright

Will Cartwright

Will specializes in digital marketing and web design with ROI as the determining factor for all decisions. Will makes use of all possible sources of traffic from the web. Focusing also on converting, closing, and nurturing each website visitor.

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