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PPC stands for pay-per-click, a model of internet marketing in which advertisers pay a fee each time one of their ads is clicked.


May, 20

How Does A PPC Campaign work

Have you seen the top search results of Google? Notice anything different? Well, usually the top 2 to 3 search results are the result of PPC advertising (pay-per-click) which has an “Ad” in front of the link.

So, what is PPC?

PPC, or pay-per-click is an online advertising model where the advertisers pay for each click of their website. So when a user clicks on the link, you will pay the advertising company. While there are a lot of ways of PPC advertisement, we will focus on the most common one: paid search advertisements.

When people search something on Google (Google is a service which provides PPC service), specially when someone is looking to buy something, these ads show up on the top of the search engine result page (or SERPS). Here’s an example.

Google adword example

These search queries can be of anything ranging from best pizza places to local plumbers or shopping for gifts. If you searched for something like this, you’re sure to get the pay-per-click ads on your SERP.

This is really popular among online businesses because, you’re only charged for the amount of clicks to your advert. Unlike traditional advertisement, where you’re charged for even displaying the ad, this method only charges for the traffic coming to the site.

Seems like a good deal, but how does it work?

In order for the ads to appear on top of the search result page, advertisers cannot simply pay more to get ahead of the competitor’s ads. All these ads are subjected to an “Ad auction” which as entirely automated process of Google which determines the relevance and the validity of the ad.

Advertisers are allowed to bid for specific keywords related to their business and whoever wins the ‘ad auction’ gets featured on Google search result page for that keyword.

Simply, if a company bids for the keyword “buy domain”, there listings will show on the very top of Google. Every time someone clicks on the advert and lands on their page, they will pay a small fee to Google.

buy domain keyword example

You might think “people will click on it and leave, but I will have to pay for it”, well this is true but the truth is the visit is worth more than what you will pay for it. Let’s assume the company pays $1 dollar but makes a sale of $20, that’s a big profit. And for the ones who come and leave, will get to know the brand and the service.

However a lot of work goes into building a profitable PPC campaign. Google charges less per click if your advertisements and landing pages are useful and satisfying to the users. Let’s dive into the nitty gritty details.

Google Ads

Google Ads is the most popular PPC advertising system in the world. In order to win the Ad Auction, Google multiplies two key factors CPC bid and Quality score.

Quality Score

Quality score is Google’s rating of the quality and relevance of your keywords and the PPC ads. There are multiple factors which depends on your quality score.

  1. Click through rate: Click through rate is the rate your PPC ads are being clicked. This is calculated by taking the total clicks on your advert divided by total people who viewed your advertisement.
  2. Relevance of each keyword to its ad group: This is based on the relevance of the keywords that you target to the advertisement.
  3. Quality and relevance of the landing page: The click from the user takes the person to your website. Google will check how relevant the ad is towards the landing page and the quality of your landing page.
  4. Relevance of your ad text: Compares the relevance an quality of the text displayed below the clickable link (Ad).
  5. Your Google Ads account performance: Takes into consideration the performance of your Google Ads account. Includes how many Ads were carried out, how was the success rate among others.

These are the core quality score components, however no one outside of Google knows how much each of the above factors weighs to the QS (Quality Score) algorithm.

However we assume that the click through rate plays a big role on it. If more people see and click your ad, it’s a sign that the ad is relevant and useful. Google likes it and rewards these ads with higher Ad ranking for a lower cost.

CPC bid

CPC or cost-per-click is the amount of money that you will pay to Google for each click that will direct users to your website.

So, higher the bid, higher the chance of getting traffic?

Not quite! As we mentioned above the CPC bid is multiplied with the quality score. So there’s no point in bidding a big amount of money, if your quality score is low.

Final Notes

A lot of work goes into building a winning PPC campaign. From research of relevant and right keywords, to organizing these keywords into relevant campaigns and ad-groups, to setting up relevant quality landing pages with a clear call-to-action.

If you hit all the points, Google will definitely reward you. If your PPC campaign is successful, Google will charge you less for the clicks while providing a higher rank on the result page.

While getting on top of SERPs through organic search ranking take a lot of work. Having a PPC campaign will get your brand/company exposure and in turn get more sales.

If you have more ideas that you think might work, drop it in the comments below.

Susith Nonis

I'm fascinated by the IT world and how the 1's and 0's work. While I veture into the world of Technology I try to share what I know in the simplest way possible. Not a fan of coffee, a sweet addict and a self accredited 'master chef'.