Pay-Per-Click (PPC): How it Works, Key Aspects, and Benefits

Pay-Per-Click (PPC): How it Works, Key Aspects, and Benefits

When it comes to marketing strategies, there are two things that often become choices. Namely, the organic alias free strategy and paid advertising aliases. PPC or pay per click is one example of that paid.

That said, PPC is a potent recipe for digital marketing success. How come?

Well, this article will provide an explanation of PPC. Starting from what pay per click is, the purpose of pay per click, and its various details in full. Come on, listen to the end, okay!

What is Pay Per Click (PPC)?

Pay Per Click (PPC) is an advertising model where advertisers only pay when a user clicks on their online ads. This model allows advertisers to display their ads on various platforms, such as search engines or social media, and they are charged based on the number of clicks their ads receive.

PPC campaigns can be highly targeted, allowing advertisers to reach specific audiences based on factors like geographic location, demographics, or interests. This model provides advertisers with more control over their ad spend as they can set budgets, bid on keywords or placements, and track the performance of their campaigns.

A PPC campaign, or pay-per-click campaign, is an online advertising strategy where advertisers pay a fee each time their ad is clicked. It is a way to drive traffic to a website or landing page and is commonly used in search engine advertising platforms like Google Ads or Bing Ads.

In a PPC campaign, advertisers bid on specific keywords or phrases relevant to their target audience. When a user searches for those keywords, the search engine displays the advertiser's ad. The advertiser only pays when someone clicks on their ad, hence the name "pay-per-click."

PPC campaigns offer several benefits, including:

  1. Targeted advertising: Advertisers can choose specific keywords, demographics, locations, and other targeting options to reach their desired audience.
  2. Cost control: Advertisers can set a budget and control their ad spend, ensuring they don't exceed their allocated funds.
  3. Immediate results: PPC campaigns can generate immediate traffic and visibility for a website or landing page, unlike organic search engine optimization (SEO) efforts that take time to show results.
  4. Measurable results: PPC campaigns provide detailed analytics and metrics, allowing advertisers to track the performance of their ads and make data-driven decisions.
  5. Flexibility and scalability: Advertisers can easily adjust their campaigns, change keywords, ad copy, or targeting options based on performance and business goals.

Overall, a PPC campaign can be an effective way to drive targeted traffic, increase brand visibility, and achieve specific marketing goals.

PPC ads can also appear in a variety of formats and sizes, such as video, text and images. These creatives appear on search engines, websites, social media, and many others.

Set Up a PPC Campaign

Here are some key steps to set up a PPC campaign:

  1. Define your goals: Determine what you want to achieve with your PPC campaign, such as increasing website traffic, generating leads, or driving sales.
  2. Keyword research: Identify relevant keywords that your target audience is likely to search for. Use keyword research tools to find popular and relevant keywords for your campaign.
  3. Create compelling ad copy: Write engaging and persuasive ad copy that includes your targeted keywords. Make sure your ad copy is relevant to the keywords and provides a clear call-to-action.
  4. Set up landing pages: Create dedicated landing pages that align with your ad copy and provide a seamless user experience. The landing page should be optimized for conversions and have a clear and compelling offer.
  5. Set a budget: Determine how much you are willing to spend on your PPC campaign. Set a daily or monthly budget to control your ad spend.
  6. Set up tracking and analytics: Install tracking codes, such as Google Analytics, to monitor the performance of your PPC campaign. Track metrics like clicks, impressions, click-through rate (CTR), conversion rate, and return on ad spend (ROAS).
  7. Monitor and optimize: Regularly monitor the performance

Pay Per Click Formula

The pay-per-click (PPC) formula is a calculation used to determine the cost per click (CPC) and the potential return on investment (ROI) for a PPC campaign. The formula is as follows:

CPC = Total Cost / Total Clicks

ROI = (Total Revenue - Total Cost) / Total Cost * 100

In the CPC formula, the total cost is the amount spent on the PPC campaign, and the total clicks are the number of times the ad was clicked.

In the ROI formula, the total revenue is the amount generated from the PPC campaign, and the total cost is the amount spent on the campaign.

By using these formulas, advertisers can evaluate the effectiveness and profitability of their PPC campaigns. They can determine the average cost per click and calculate the return on investment to assess the success of their advertising efforts.

Why Should You Use Pay-Per-Click?

Advertising using the PPC technique is one of the most effective ways to bring traffic to your website, regardless of how much budget you have. However, for those of you who may still feel unfamiliar with advertising techniques using PPC, there's no need to worry.

The reason is, in the following explanation, Hadehana will discuss the benefits and reasons why you should start switching to using PPC advertising techniques for your business needs. The following is a full review of the reasons for the importance of advertising using PPC.

Ease in Setting the Target Audience

By using this PPC advertising technique, it will really help and make it easier for you to set how many target audiences you need to target to create an advertisement.

You are given the freedom to set the number of target audience in your ad later. However, the thing you need to remember is that of course the more target audience you target, the more costs you will incur.

Using this PPC advertising technique will allow you to determine your target audience based on demographics, location, and so on.

Therefore, PPC is an advertising technique that can work effectively in helping you to reach the right target audience.

Getting Traffic Faster

There are different results if you advertise using PPC techniques compared to using only SEO (Search Engine Optimization). Generally, promotion techniques using SEO are organic in nature so that it really takes a long time to get the results you will get.

However, if you advertise using PPC, you can get results in a relatively fast time. That is, you can get a large number of website visitors but in a short period of time.

Adjustable Budget

When you hear the word advertisement, maybe what comes to your mind is the cost of installing it which is very expensive. However, this does not apply if you advertise using PPC. Because this PPC advertising technique allows you to set advertising costs according to the budget you have.

Not Influenced by the Algorithm

Advertising using PPC does not have a significant impact over organic algorithms. That way, the ads you create can still be delivered properly to the target audience without worrying about changes to the algorithm.

Disadvantages of Pay Per Click (PPC)

While pay per click (PPC) advertising can be an effective marketing strategy, it also has some disadvantages to consider:

Expensive long term strategy

PPC advertising can be expensive, especially in competitive industries where the cost per click (CPC) is high. Advertisers need to have a sufficient budget to sustain their campaigns and achieve their desired results.

Click Fraud

Click fraud refers to the practice of clicking on ads with malicious intent, such as artificially inflating costs for competitors or generating revenue for website owners. This can lead to wasted ad spend and inaccurate performance metrics.

Ad Blindness

Many internet users have become accustomed to ignoring or avoiding ads, leading to ad blindness. This means that even if your ads are displayed, they may not receive much attention or generate clicks.

Limited Reach

PPC advertising only reaches users who actively search for specific keywords or visit websites within the ad network. This can limit your reach to potential customers who may not be actively searching for your products or services.

Time and Effort

Managing PPC campaigns requires ongoing monitoring, optimization, and analysis. It can be time-consuming and requires expertise to ensure that campaigns are effective and cost-efficient.

Ad Rank Competition

In competitive industries, advertisers may need to bid higher to achieve a desirable ad rank. This can lead to increased costs and make it challenging for smaller businesses with limited budgets to compete effectively.

Visibility is lost when you stop paying

One of the main drawbacks of PPC is that ads will no longer be at the top of search engines when companies stop paying for ads.

Unlike the content marketing strategy, which can still be in the SERPs as long as the content remains relevant to the keywords.

Likely to generate low ROI

One of the drawbacks of PPC advertising for advertisers is that it generates low ROI. PPC ROI is calculated in the short term through the amount of product sales revenue minus the total costs incurred for PPC.

That is, every time a company stops paying for advertising, the ROI won't add up in the long run either.

Not suitable for increasing brand awareness

The goal of PPC is to sell products/services quickly. Because the way it works is by paying for the advertising platform, the PPC strategy is not suitable for increasing brand awareness.

Companies still need a content strategy (such as social media or blogs) that can increase brand awareness among customers.

Types of Pay Per Click Ads

Here are some types of PPC that often appear in cyberspace: 

  1. Search Advertising This type of PPC generally appears on the SERP (Search Engine Result Page), both on Google and Bing search engines. These PPCs usually appear with Ad text appearing alongside search results. 
  2. Social Advertising Not much different from search advertising, this type of PPC social advertising is advertising that appears on social media. Depending on the settings, ads of this type can appear on feeds, stories and more. 
  3. Display Advertising alias Google Display Network, this type of PPC will display your ads in the form of display ads. This ad can be in the form of text, or visual in the form of an image or video. 
  4. Google Shopping This type of PPC displays product images and their prices in Google search results. If you click on the ad, you will be directed directly to the seller's stall on the e-commerce website. 
  5. Remarketing This type of PPC will only display ads to people who have previously visited the website or made a purchase with you. Remarketing is a type of PPC that is quite effective because it targets people who are already interested.

Best Pay Per Click

The best pay-per-click (PPC) platform depends on your specific business goals and target audience. However, some of the most popular and effective PPC platforms are:

  • Google Ads: Google Ads is the largest and most widely used PPC platform. It allows you to display ads on Google search results pages, as well as on websites and apps within the Google Display Network. Google Ads offers a wide range of targeting options and advanced features for optimizing your campaigns.
  • Microsoft Advertising: Formerly known as Bing Ads, Microsoft Advertising allows you to display ads on the Bing search engine, as well as on Yahoo and AOL. While it has a smaller reach compared to Google Ads, it can be a cost-effective option, especially if your target audience uses Bing as their primary search engine.
  • Facebook Ads: Facebook Ads is a powerful PPC platform that allows you to target specific demographics, interests, and behaviors of Facebook users. It offers a variety of ad formats, including image ads, video ads, and carousel ads, and can be effective for businesses looking to reach a wide audience and build brand awareness.
  • LinkedIn Ads: LinkedIn Ads is a great option for businesses targeting professionals and B2B audiences. It allows you to display ads on LinkedIn's newsfeed, in the sidebar, and in sponsored InMail messages. LinkedIn Ads offers advanced targeting options based on job title, industry, company size, and more.
  • Twitter Ads: Twitter Ads allows you to promote your tweets, accounts,

How to do PPC?

There are various types of PPC marketing, but the two most popular are search advertising and social advertising.

key points about PPC marketing:

  • Ad Platforms: The most popular PPC platforms are Google Ads (formerly known as Google AdWords) and Bing Ads. These platforms allow advertisers to create and manage their PPC campaigns, set budgets, and target specific keywords and demographics.
  • Keyword Research: PPC campaigns are built around keywords that are relevant to the advertiser's products or services. Extensive keyword research is crucial to identify the most effective and cost-efficient keywords to target.
  • Ad Creation: Advertisers create compelling and relevant ads that will appear in search engine results or on other websites within the ad network. Ads typically include a headline, description, and a call-to-action to entice users to click.
  • Bidding and Budgeting: Advertisers bid on keywords, determining how much they are willing to pay for each click. The bid amount, along with the ad's quality score, determines the ad's position in the search results. Advertisers also set daily or monthly budgets to control their spending.
  • Targeting Options: PPC platforms offer various targeting options to reach a specific audience. Advertisers can target based on keywords, location, demographics, interests, and more.

Search Advertising

Most people, including companies, start doing pay-per-click marketing with search advertising. Search advertising is usually made using Google Ads.

Google Ads is the most popular PPC ad system currently in the digital world. This platform allows you to advertise on the Google search engine and other Google products.

In accordance with the marketing concept, Google Ads works on a pay-per-click model. So the user will bid (auction) keywords and pay for each click. Every time someone searches for certain keywords on search engines, Google will select several ads to appear on the search results page.

In choosing which ads to display, Google pays attention to several factors such as the quality and relevance of keywords to the campaign and the bidding value.

If you want to discuss it more specifically, which ads appear more depends on the ranking of the business ads. The ranking of these ads is determined by two main factors, namely the CPC bid (the budget set by the advertiser – the higher the better) and the Quality Score (this consists of the click-through-rate, relevance and quality of your account's landing page).

To make Google Ads is very easy. You can follow these steps: 

  • Go to Google Ads 
  • Create a Google account 
  • Choose a goal that fits your business 
  • Determine the range of locations you are targeting 
  • Set the business categories you manage to make it easier for Google to determine the target audience 
  • Create ad copy 
  • Determine the budget that you provide 
  • Choose a payment method

cost per click google ads

The cost per click (CPC) in Google Ads can vary widely depending on factors such as industry, competition, and targeting options. On average, the CPC in Google Ads across all industries is around $1 to $2. However, some highly competitive industries, such as finance or insurance, can have much higher CPCs, ranging from $5 to $10 or even more.

It's important to note that the CPC you pay in Google Ads is determined through an auction system, where advertisers bid on keywords and compete for ad placements. The actual CPC you pay can be lower or higher than your bid, depending on factors such as ad quality, relevance, and competition.

To get a more accurate estimate of the CPC for your specific industry and target keywords, you can use Google's Keyword Planner tool or consult with a digital marketing agency that specializes in Google Ads.

Social Advertising

Social advertising will not only help your sales or ROI but also brand awareness and brand loyalty. If you are interested in doing social advertising, every social media now has their own advertising program.

Facebook is one of the most widely used social media for social advertising. With a very large number of users, you can definitely find your audience on Facebook. This social media has also prepared a special feature so you can advertise easily, namely Facebook Ads.

To be able to make pay per click on Facebook Ads, you can follow these steps: 

  • Go to Facebook Ads 
  • Select Integrated Ad Creation 
  • Define the advertising goals you want to achieve 
  • Click which ad objective is best suited for your business 
  • Select a Facebook ad type 
  • Write an ad name and choose a traffic destination 
  • Show promos 
  • Determine the target audience 
  • Choose a placement 
  • Set how long your ad will appear 
  • Choose an ad format 
  • Create copy for your ad 
  • Choose an image, write a title and enter a link 
  • Make a payment

The following are the steps for creating Instagram Ads:

  • Go to Facebook Ads 
  • Select Integrated Ad Creation 
  • Define the advertising goals you want to achieve 
  • Click which ad objective is best suited for your business 
  • Select a Facebook ad type 
  • Write an ad name and choose a traffic destination 
  • Show promo Select target audience, placement and schedule 
  • Connect with Instagram account 
  • Choose an ad format 
  • Create copy for your ad 
  • Choose an image, write a title and enter a link 
  • Make a payment

Bottom Line

Pay Per Click (PPC) is one of the most effective and efficient digital advertising techniques that you should apply to your business, especially in this digital era.

Especially if your prospective customer is someone who already understands using the internet and social media.

With PPC, it's easier for companies to reach specific advertising targets, measure results, manage advertising budgets, and get faster advertising results.