What Is PPC?

Not sure if you notice this but all of the results are advertisements, none of the ones showed on the first screen are organic!
On this case, someone (parents) are trying to solve a problem (to buy winter boots for their getaway) by searching for options on Google. A bunch of brands/businesses who are doing PPC are getting visible because of this search.

PPC is also perfect for people who want instant gratification. Your highest-volume keywords and audiences can start generating traffic mere minutes after they’re launched, meaning that you can start the cycle of observation and optimization extremely quickly. You can watch your campaigns succeed or fail in real time and make adjustments at any moment.

The other unique thing about PPC advertising is that you have a tremendous amount of control over your audience. By carefully selecting the keywords that will trigger your ads to show, you can target internet users at any stage in the buying journey. Unlike organic SEO, you can tailor your ads to show the most relevant value propositions and calls to action to each audience.

What is PPC and how Does PPC Work?

We’ll start by talking about PPC in search since it’s the easiest to understand.

If you are interested in using them, start by creating a list of keywords that you think are relevant to your business. For example, if you own a boots store, you’d probably come up with keywords like “buy women’s boots” and “men’s winter boots”. Each keyword would have its own bid and at least 1 ad associated with it. When someone performs a search using a query that contains one of your keywords, you and everyone else bidding on that term are entered into a quick auction for the top spot on the Search Engine Results Page (SERP). The results of that auction determine the order in which various ads are shown on the page and the amount that you would pay if your ad were clicked.

PPC on non-search networks

PPC on non-search networks works essentially the same way, except instead of having ads being triggered by user queries, the auction occurs when a user in your target audience lands on a new webpage, looks for a video on YouTube, or scrolls sufficiently far in their social media newsfeed. While the details of determining when an ad can show and to whom will vary by network, the core concept of only paying for an ad when it’s clicked remains the same.

What Do I Pay for a Click?

Unlike auctions on eBay, Google and other PPC-based ad networks have a vested interest in who wins each auction. People will stop using a search engine that doesn’t provide them with useful results, and advertisers won’t spend time and effort managing networks that can’t provide them with qualified traffic.

Google and Bing have solved this problem by calculating ad rank based not only on each keyword’s bid but its Quality Score, and many other networks have followed suit with similar metrics. Networks are deliberately vague about how quality is determined to avoid allowing people to game the system, but the three major components are ad relevance, landing page experience, and historical click-through rate.

You can achieve a higher Quality Score by ensuring that your ad is tightly related to both your landing page and the keyword it’s associated with, that your website loads quickly and doesn’t contain popups or malware, and that you’re building on a history of relevant user interaction. On the flip side, if your Quality Score is too low, your ads may not be displayed at all.

Let’s walk through an example to see how a Quality Score fits into PPC ad placement:

• You own a boots store and decide to bid $2 on the keyword “buy men’s boots”.
• You write a great ad and make sure that it points to a landing page that shows your selection of men’s boots.
• Your Quality Score is 9.
• Your ad rank is $2.00 x 9 = 18.
• You also have a competitor bidding $2.50 on the keyword “buy men’s boots”, but their ad and website are not good, giving them a Quality Score of 5.
• Their ad rank is $2.50 x 5 = 12.5.
• You outrank your competitor and therefore show up in the top spot, even though your bid is lower.

Let’s add one more twist to this equation. Let’s pretend that you increase your bid on the above keyword to $3.00. The next time your ad enters the auction, your ad rank is $3.00 x 9 = 27, compared to your competitor’s 12.5. You’re certainly going to show in the top position! However, it would hardly be fair to charge you the full $3 for your click when your ad is so much better than your competitor’s. In this case, you would only pay $2.51, one cent higher than your competitor. This is a clean way to ensure that bidding high on relevant keywords won’t punish advertisers who have really strong campaigns.

The math gets more complex as you introduce more competitors into the mix, along with things like bid offsets and different automated bid strategies.

Key Takeaway: The most fundamental aspect of PPC bidding is that you will not pay more than your keyword bid, and you can often pay less by creating good ad campaigns.