What is PPC and what is it used for?

by Moises Hamui September 23, 2023

PPC (Pay Per Click or Payment Per Click) is a form of online advertising that consists of paying an amount each time a user clicks on an advertisement. These ads can appear on different digital platforms, such as search engines, social networks , websites or applications.

PPC is used to attract qualified traffic to a website, generate conversions (sales, registrations, downloads, etc.) and measure the return on investment (ROI) of advertising campaigns .

In this article, we will explain what PPC is, how it works and what its advantages and disadvantages are.

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How does PPC work?

How PPC works depends on the platform where the ads are published, but in general it is based on the following steps:

The advertiser creates and configures their PPC campaign , defining their objectives, their budget, their target audience, their keywords, their creatives and their landing pages.
The platform shows the advertiser's ads to users who match their target audience and who search or browse topics related to their keywords.
The user sees the ad and decides whether to click or not. If you click, you are redirected to the advertiser's landing page . If you do not click, there is no cost to the advertiser.
The advertiser pays the platform an amount for each click their ad receives. This amount depends on several factors, including competition, quality, and relevance of the ad and landing page.
The platform provides the advertiser with data and reports on the performance of their PPC campaign , such as the number of impressions, clicks, conversions, cost per click (CPC), cost per acquisition (CPA) and return on investment (ROI).

How do PPC ad bidding work?

PPC ad bidding is the mechanism that determines the cost and position of ads on online advertising platforms.

Every time a user searches or visits a page that displays ads, an auction occurs in which advertisers compete to show their ads to the user.

How PPC ad bidding works depends on the platform where your ads are served, but is generally based on the following factors:

The advertiser's budget . It is the maximum amount that the advertiser is willing to pay for each click on their ad. The advertiser can set a daily, monthly or campaign budget, and can adjust it based on the results they obtain.
The advertiser's offer . It is the amount the advertiser is willing to pay for each click on their ad for a given keyword or audience. The advertiser can set a manual bid, meaning setting the bid value for each ad, or an automatic bid, meaning letting the platform adjust the bid based on the campaign goal.
The quality and relevance of the advertisement . It is the measure of how appropriate the ad is for the user's query or for the context in which it is displayed. The platform evaluates the quality and relevance of the ad based on indicators such as CTR (click-through rate), ad copy, landing page, ad extensions, and the advertiser's performance history.
The Ad Rank or quality level of the ad . It is the result of multiplying the advertiser's offer by the quality and relevance of the ad. The Ad Rank determines the position and cost of the advertisement in the auction. The higher the Ad Rank, the greater the probability that the ad will appear in a prominent position and the lower the cost per click.

What are the advantages and disadvantages of PPC?

PPC has a series of advantages and disadvantages that you should take into account before deciding to use it as part of your online marketing strategy. These are some of them:

Advantages of PPC

It allows you to reach a broad and segmented audience . PPC allows you to show your ads to millions of users who use the digital platforms where they are published. You can segment your target audience by criteria such as location, language, gender, age, interests, behavior or purchase intentions.
Allows you to obtain quick and measurable results . PPC allows you to generate traffic and conversions in a short time, since your ads are displayed immediately after creating your campaign. Additionally, you can measure the performance of your campaign with accurate, real-time data and indicators.
Allows you to control the budget and ROI . PPC allows you to establish the budget you want to invest in your campaign and adjust it depending on the results you obtain. You can control the ROI of your campaign, calculating the relationship between the benefit and the cost generated by each click.
Allows you to optimize and improve the campaign . PPC allows you to A/B test different versions of your ads and landing pages to see which ones perform best and optimize your campaign. You can also pause or modify your campaign at any time, depending on the data you obtain.

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Disadvantages of PPC

Requires constant investment . PPC involves a cost for each click you receive on your ad, which means you must continually invest money to keep your campaign active. If you stop investing, your ads will stop showing and you will lose visibility.
Requires technical knowledge . PPC requires technical knowledge to create and manage an effective campaign. You should know how to choose the right keywords, how to design the most attractive ads, how to set up the most optimized landing pages, and how to analyze the data and reports that the platform provides you.
It has a lot of competition . PPC is a very popular form of advertising used by many advertisers, which implies high competition for advertising space and keywords. This can make your cost per click higher and make it harder to stand out from other ads.
You have a risk of fraud . PPC has a risk of fraud, since there are people or malicious programs that click on ads intentionally and repetitively, to increase the cost for the advertiser and reduce their profitability. This is known as click fraud or click fraud.

Top PPC Platforms

The main PPC platforms are those that allow you to create and manage online advertising campaigns based on pay per click, that is, paying an amount each time a user clicks on your ad.

Some of the main PPC platforms are as follows:

Google Ads : It is the most popular and used PPC platform, since it allows you to show your ads on the Google search engine, on its display network, on YouTube, in Gmail and on other associated websites. Google Ads offers you a wide variety of formats, segmentation options, and measurement and optimization tools for your campaigns.

Microsoft Advertising : It is the PPC platform that allows you to show your ads on the Bing search engine, on its display network, on MSN, in Outlook and on other associated websites. Microsoft Advertising has less competition and a lower cost per click than Google Ads, but also a smaller audience and reach.

Facebook Ads : It is the PPC platform that allows you to show your ads on the Facebook social network, on Instagram, on Messenger and in its audience network. Facebook Ads offers you a great segmentation capacity by demographic data, interests and user behaviors, as well as different formats such as images, videos, carousels or stories.

AdRoll : It is a PPC platform specialized in remarketing or retargeting, that is, showing your ads to users who have already visited your website or have interacted with your brand. AdRoll allows you to create remarketing campaigns on different platforms such as Google, Facebook or Twitter, as well as access more than 500 advertising networks.

RevContent : It is a PPC platform focused on native content, that is, content that adapts to the design and context of the website where it is displayed. RevContent allows you to create native content campaigns with attractive images and headlines, displayed on websites relevant to your niche.

Keywords when running a PPC campaign

Keywords when creating a PPC campaign are the terms or phrases that advertisers choose to show their ads to users who search or browse related topics.

Keywords are essential to the success of a PPC campaign, as they determine the relevance, cost and position of your ads.

There are different types of keywords that can be used in a PPC campaign, depending on their intent, specificity, and match. Some of the most common types are:

Brand keywords : These are those that include the brand name or its variants. For example, “Nike”, “Nike shoes” or “Nike store”. These keywords typically have a high CTR (click-through rate) and low CPC (cost per click) as they indicate high interest and low competition.
Generic keywords : These are those that describe the product or service without mentioning the brand. For example, “sports tennis”, “food delivery” or “travel agency”. These keywords typically have low CTR and high CPC as they indicate low interest and high competition.
Long tail keywords : These are those that contain more than three terms and are more specific and descriptive. For example, “sports shoes for running on asphalt”, “vegan food delivery in Jalisco” or “travel agency specializing in cruises”. These keywords typically have a high CTR and low CPC, as they indicate high interest and low competition.
Negative keywords : These are those that are excluded from the campaign to avoid showing the ads to users who are not relevant or who have no purchase intention. For example, if you sell sneakers, you can exclude words like “free,” “used,” or “repair.” These keywords help reduce the cost and improve the quality of traffic.

To choose the best keywords for a PPC campaign, the following factors must be taken into account:

The objectives of the campaign : The objectives that you want to achieve with the campaign must be defined, such as generating traffic, conversions, sales or brand recognition.
The target audience : You must know the profile, needs and interests of the audience you want to reach with the campaign, as well as the language, location and device they use.
The competition : The competition that exists in the market and on the platforms where the campaign is going to be published must be analyzed , as well as the keywords they use and the ads they show.
The tools : Tools such as Google Ads Keyword Planner, Ahrefs Keywords Explorer or SEMrush Keyword Magic Tool should be used to search, analyze and select the most suitable keywords for the campaign.

PPC vs. SEO

PPC and SEO are two digital marketing strategies that are used to attract traffic to a website through search engines.

PPC in marketing means pay per click and SEO means search engine optimization. Both have their advantages and disadvantages, depending on the objectives, budget and competition of each business.

PPC consists of creating and displaying ads on digital platforms, such as Google, Bing or Facebook, and paying an amount each time a user clicks on the ad. PPC allows you to obtain quick and measurable results, control the budget and return on investment, and segment the target audience by various criteria.

However, PPC also requires constant investment, technical knowledge, high competence and risk of fraud.

SEO consists of improving the visibility and relevance of a website in the organic results of search engines , that is, those that are not paid. SEO is based on creating and optimizing content, links and technical aspects that meet the quality and relevance criteria of search engine algorithms.

SEO allows you to obtain free and consistent traffic, improve the reputation and authority of the website, and reach a broader and more diverse audience. However, SEO also requires time and effort, relies on frequent and unpredictable algorithm changes, and has less control over the results.

Written by Moises Hamui Abadi : I am an entrepreneur, founding partner of Viceversa and SoyMacho. After leading several digital businesses and advising several other businesses; I decided to form MHA Consulting, a digital marketing consultancy dedicated to growing and enhancing digital businesses in more than 7 countries and generating more than 1,500 million pesos.

If you want more information on this topic or are looking for other options to profile your ideal client, at MHA you will find the solution you need. Schedule a call.