What Is PPC? The Definitive Guide to Pay-Per-Click Marketing

PPC stands for pay-per-click. It’s a type of digital marketing where you pay each time a user clicks on one of your ads. 

To see what PPC ads look like, run almost any search on Google (or Bing). You’ll see ads displayed at the top of the results page:

See the listings at the top marked “Sponsored”? Those are PPC search ads from Google Ads, Google’s ad platform.

PPC is sometimes referred to as CPC. But there’s a subtle difference. 

Cost per click defines the actual amount an advertiser paid per click. And PPC is the term for pay-per-click marketing. 

You can run PPC ads in a variety of places, including:

• Search engines like Google and Bing
• Social media platforms like Facebook and Instagram
• Banners on websites
• Videos on YouTube
• Marketplaces like Amazon

Why Is PPC Important?

PPC marketing can help attract new customers and grow your business. By making your brand visible to specific audiences and taking them to high-value pages that support your business goals. 

Let’s explore what makes PPC so valuable: 

PPC Ads Allow for Effective Targeting

PPC ads allow you to reach highly specific audiences, based on very specific criteria known as targeting. So you speak to the right people and avoid wasting ad spend.

The exact targeting options vary depending on the platform. Google Search has different targeting options compared to Facebook, for example. 

Here, you can see how Google enables you to target users based on demographics, keywords, topics, and more: 

You can even target users who already visited your website or engaged with your brand. This is known as remarketing, or retargeting. 

This enables you to remind the potential customer of your offerings. And encourage them to return and convert

PPC Ads Drive Fast Results

With PPC, you can start driving traffic the very same day you start your campaign. This is much quicker than search engine optimization (SEO).

SEO can take months to start driving results. 

Here’s a chart from Domain Overview (a tool that gives you insights into your competitors’ organic performance) showing how long it took Lululemon to start gaining traction with SEO.

PPC Ads Are Cost-Effective

With PPC, you have control over your budget. 

You decide in advance how much you want to spend in total, and per click. And you only actually pay when someone clicks on your ad. 

This combined with powerful targeting means you have a good chance of reaching a relevant audience for a price that seems fair to you (we’ll touch on this more when we discuss bidding).

PPC Is Easy to Measure and Track

PPC marketing provides much more data and analysis than traditional forms of marketing. So, it’s easy to understand how your ads are performing.

You’ll probably never know how many people saw your billboard or read your magazine ad. But you can easily track how many people clicked on your PPC ad and what they did from there. Like make a purchase. 

You can check anytime how many clicks and conversions your ads have generated in whichever platform you’re using:

You can use this data to make informed decisions for future campaigns. And optimize your strategies for better results.

It’s Easy to Manage & Make Changes

When you manage a PPC campaign, you can easily set and change the maximum cost-per-click, allocate budgets, and adjust your strategy on the fly. 

This level of control enables you to optimize your campaign and adapt quickly if needed. Like boosting the budget of ads that are doing well. And pausing or making changes to ads that aren’t performing. 

It Helps You Gain (Free) Brand Awareness

Yes, PPC generates clicks and conversions. But it’s also good for brand visibility. 

Even when users don’t click on your ads, they still see your brand and message. And the best part is that you only pay if they click. 

So, a bunch of people could have eyeballs on your brand. And you won’t pay a cent if they don’t click.

It Dovetails with SEO

Pay-per-click marketing and SEO complement each other. By running SEO and PPC at the same time, you can occupy more screen space in search engine results. Which is likely to drive more traffic and sales overall. 

SEO focuses on unpaid search rankings. And PPC complements it by providing almost immediate visibility. 

You can find your top organic pages using Google Search Console. Click “Search results” in the “Performance” section, and then select “Pages.”

You’ll see the clicks and impressions for each page of your site, sorted from highest to lowest. 

If you spot any important pages that aren’t generating much traffic, you can give them a boost with paid ads.

PPC vs. SEO

SEO and PPC are both digital marketing channels businesses can use to drive traffic. 

SEO is focused on helping your website rank higher in organic search engine results. And driving more traffic. 

But PPC includes paid search and other channels like paid social and display. 

For example, here’s a PPC ad on Facebook:

The main difference is this:

• PPC involves paying per click
• SEO (organic search) clicks are free

Generally, businesses see the best results when they align SEO and PPC in their marketing strategies. 

You can start to drive traffic with PPC from search engines very quickly. But it usually takes time to rank organically.

SEO and PPC can, and should, work together to drive success online.

How Does PPC Advertising Work?

Pay-per-click advertising uses a pretty simple process:

1. Sign up for an advertising account with Google Ads or the platform you want to run ads on
2. Decide who you want to target based on keywords and other criteria like demographics
3. Set your overall budget and how much you’re willing to pay for each click
4. Create the copy and images/videos for your ads
5. Send your ad into an auction with other advertisers who are bidding on the same keywords or targeting criteria
6. Wait for the auction to determine whose ads will be shown—and where
7. Pay when someone clicks your ad

There are many different platforms and ad formats (more on those later). And even different strategies. But the main principles remain.

How the Google Ads Ad Auction Works

When a user performs a search, an ad auction takes place. Google uses Ad Rank to decide which ads to show, and in which order. Ad Rank consists of various factors, including:

• Bid amount (the amount you’re willing to pay)
• Auction-time ad quality (including expected click-through rate, ad relevance, and landing page experience)
• Ad Rank thresholds (the minimum Ad Rank needed to show your ad)
• Competitiveness of an auction
• Context of the person’s search (like location, device, time of search, the nature of the search terms, other ads and search results displayed on the page, and user signals) 
• Expected impact of assets and other ad formats

Another important concept to understand is Quality Score (QS).

Quality Score (QS) is a score between 1 and 10 that Google gives each of your ads. It consists of:

• The expected click-through rate (CTR) for an ad—how many people it estimates will click on the ad compared to how often it’s shown
• The ad’s relevance to the query being searched
• The landing page experience for the page that the ad directs to

While Quality Score itself is no longer used in the Google Ads ad auction, these three components are. So you’ll want to keep an eye on your Quality Score to ensure you’re getting optimal ad placements and pricing. 

To check your Quality Score, open Google Ads, navigate to “Audiences, keywords, and content,” then click “Search keywords.” This will bring up an overview of keyword performance.

Select “Columns,” then “Modify columns.” And scroll down to “Quality score.” 

Select all of the Quality Score components, and then click “Apply.”

You’ll then see all those metrics in the table. Including the Quality Score that Google has awarded to each of your ads’ keywords:

Key Components of Google PPC Ads

Now, let’s take a look at the basics of search ad campaigns.

Campaign Budget

You can set your campaign’s average daily budget based on what you want to spend.

Bear in mind that Google Ads can spend up to two times your daily budget on a particular day. But Google won’t charge more than your monthly budget.

Google uses 30.4 days per month. You can use this to calculate your average daily budget based on your monthly budget:

So, set your daily budget to $16.45 if you don’t want to spend more than $500 in a month.

Cost

The cost of your PPC ads varies based on how competitive the auction is. And how well your ads perform. 

But you can control how much you spend.

You specify a maximum CPC. Which is the highest amount you’re willing to pay for each click on your ads. 

And because it’s an auction, you might not pay the full amount for each click. 

You only pay enough to clear the Ad Rank threshold (minimum price for your ad to be shown) and beat any competitors below you. So, you might pay much less than your maximum CPC. 

Campaign Structure

Your PPC account is split up into campaigns, ad groups, and keywords. 

Like this:

Campaigns

Each campaign contains multiple ad groups.

You’ll probably only have a small number of campaigns in your account (unless you’re a huge global brand). 

In most instances, campaigns should be based on set goals, targeting, type of ads, or how you want to allocate budget. 

For example, let’s say you’re running ads for a car dealership. You might set up different campaigns for “used cars” and “new cars” to keep budgets, targeting, and other adjustments separate. 

Ad Groups

Ad groups contain multiple related ads.

You can think of them as specific groups of ads that are triggered by keywords.

And you can include multiple keywords (and match types) within an ad group.

Keywords

Keywords are words and phrases you choose that are important to your business. When a user searches for that keyword, your ad can be shown. 

When you add a keyword to your account, you will need to select a keyword match type. Match types allow you to control which search terms will trigger your ads.

Keyword Match Types

The Google keyword match types you can use are:

• Broad match: Ads may show on searches related to your keyword—giving you the least amount of control over what triggers an ad but the widest reach. This includes misspellings, synonyms, related searches, and other related variations. For example, using the keyword “vacation Hawaii” could also make your ads show up for “vacation planning Hawaii” and “hotels Honolulu.” But not for keywords with completely different meanings like “jobs in Hawaii.”

• Phrase match: Ads may show on searches that include the meaning or implied meaning of your keyword. Phrase match offers wider reach than exact match (we’ll get to that in a moment), but it’s a little more specific than broad match. For example, targeting the keyword “vacation Hawaii” would also have your ads show up for “holiday Hawaii,” “vacation Hawaii ideas,” and “summer trip to Hawaii.”
• Exact match: Ads may show only on searches with the exact meaning or intent of your keyword. This gives you the tightest control over the terms that trigger an ad but the least amount of reach. A search for “vacation Hawaii” could trigger an ad for “vacations in Hawaii.”

• Negative keywords: Ads won’t show in searches for keywords you want to exclude. This is an effective way to prevent wasted budget and irrelevant traffic.

When entering your keywords, make sure to use the correct syntax for the match type:

• Broad match = keyword
• Phrase match = “keyword”
• Exact match = [keyword]

Like this:

Bidding Strategies

Google offers numerous bidding strategies. You can choose which strategy is best for you based on whether you want to focus on getting clicks, impressions, conversions, or views. 

If you want to focus on conversions, Google offers five types of Smart Bidding strategies. These are automated bid strategies that use Google’s AI to optimize for conversions or conversion value:

• Target cost per action (CPA): This bidding strategy helps you control how much you want to spend on each desired action, like a purchase or a sign-up

• Target return on ad spend (ROAS): This bidding strategy lets you set a goal for how much money you want to make in return for every dollar you spend on ads, helping you maximize profit

• Maximize conversions: This bidding strategy involves the platform automatically adjusting your bids to get as many people as possible to take a specific action on your website, such as making a purchase or filling out a form

• Maximize conversion value: This bidding strategy helps youget the most value out of your ad budget by automatically optimizing your bids to drive higher-value conversions, such as larger purchases

• Enhanced cost per click (ECPC): This bidding strategy automatically adjusts your manual bids based on the likelihood of a click leading to a sale or other valuable action

If your goal is to generate clicks to your website, you could try these bid strategies:

• Maximize clicks: This automated bidding strategy has you set an average daily budget, and Google Ads will try to drive the most clicks possible within that budget

• Manual CPC bidding: This bidding strategy lets you manage your maximum CPC bids yourself. To gives you you more flexibility. For example, you can choose to set higher bids for top-performing ad groups or keywords 

If you want to focus on brand awareness, you can try a bid strategy designed to maximize visibility. Like CPM (cost-per-mille or cost per thousand impressions).

And if you’re running a video campaign (on YouTube or the Google Display Network), you can also choose CPV (cost-per-view) bidding.

It might be worth trying out a few different bidding strategies to see which works best for you. 

Note: These strategies are for Google Ads. Other PPC platforms have similar, but different, bidding options.

Best Pay-Per-Click Platforms

There are many PPC platforms out there. 

Here are some of the most well-known ones:

Google Ads

Google Ads is the largest PPC platform, with a market share of 28%. 

Google Ads is made up of two key parts: 

• Google Search Network: Search ads on Google search, Google Maps, Google Shopping and search partners on non-Google websites
• Google Display Network: Display ads and videos on YouTube, Gmail, Blogger, and 3 million partner websites and apps

Meta Ads

Meta owns two of the largest social media platforms: Facebook and Instagram. 

You can use Facebook Ads Manager to run PPC ads on both Facebook and Instagram. 

Meta offers very specific targeting options based on demographics and interests. This, combined with enormous reach, enables brands to tap into a huge pool of potential customers.

TikTok Ads 

TikTok is a popular short-form video platform. And TikTok Ads can be a great way to reach a younger and highly engaged audience. 

TikTok Ads offers a range of advertising options, including branded hashtags and in-feed ads. 

With 1.7 billion users worldwide, the platform is growing fast and very popular with Gen Z.

Microsoft Ads

Microsoft Ads offers a way to extend your reach beyond Google. You can target users on Bing and partner sites. 

The Microsoft Search Network powers 38.1% of U.S. desktop searches and 6.4 billion monthly searches worldwide. And Microsoft claims that Microsoft Ads can connect you with 46 million searchers in the U.S. that Google can’t reach.

LinkedIn Ads

With LinkedIn Ads, you can reach 900 million users worldwide on the largest social media platform for professional networking. 

LinkedIn Ads offers advanced targeting options, including job title, employer, industry, and professional skills, making it ideal for B2B marketing.

Types of PPC Ads

When you run a PPC campaign, you have a wide choice of different ad formats. The formats available depend on the platform.

Search Ads

Search ads appear on the results pages of search engines like Google when users look for information. 

Search ads are shown when users search for relevant keywords. This makes sure your ads show specifically to audiences searching for terms related to your products or services.

For example, a search for “best puppy food” will bring up sponsored results from pet food companies.

Search ads provide immediate visibility and attract your target audiences.

Display Ads

Display ads are banner or image ads that appear on various websites within the Google Display Network and other partner sites.

They can appear at the top, bottom, side, or anywhere else on a webpage. They often show up on news sites. 

Like this: 

Video Ads

Video ads appear on sites across the web and video platforms like YouTube. 

There are many different types of video ads. A common one is a pre-roll ad that’s shown before the video the user wants to watch.

How to Create a PPC Campaign with Google Ads

Here are the steps you need to take to set up a PPC campaign. This is for Google Ads, but the steps are similar for other PPC platforms.

Set Up an Account

First, you need to create a Google Ads account. It’s free. You’ll just need to enter your email address and choose a password.

Select Your Goal and Campaign Type

The exact steps can vary depending on different factors, like your location. 

Usually, you’ll start by choosing a goal and campaign type. 

Here’s how you do it:

Open Google Ads and click “Create.” Then click “Campaign.”

At this point, you’ll be asked to choose your objective. Google will recommend different channels based on what your goals are. For instance, if you say you want to drive “Brand awareness and reach” Google will recommend Display and Video.

To choose from all available channels, just click “Create a campaign without a goal’s guidance.”

Next, select a campaign type. There are many different options, including “Search,” “Display,” “Shopping,” “Video,” “App,” and more. 

Let’s say you want to run a campaign on Google search. You would click “Search,” then “Continue.”

Then, you can select the results you’d like to get from your campaign, such as website visits. But you don’t have to. Google just gives you some extra help during the setup process if you do. 

And finally, name your campaign and click “Continue.”

Next, select what you want to focus on. “Clicks” is a good option to start with, especially if this is your first campaign. 

Choose a Bidding Strategy and Set Your Limit

You’ll need to decide how much you want to spend per click. And which bidding strategy you want to use.

During the campaign setup, you can check the box “Set a maximum cost per click bid limit.” 

Like this:

Or, you can leave it blank and set the CPC limit at the ad group or keyword level later. 

When you’re done, click “Next.”

Not sure how much you should be paying per click? Research the average CPCs for your industry and adjust over time based on ROI (return on investment).

Configure Your Campaign Settings and Targeting

You need to choose where your ads will be displayed. 

To show your ads on Google search only, ensure the boxes “Include Google search partners” and “Include Google Display Network” are not checked during campaign setup:

Then, scroll down and choose where you want your campaign to run. 

If you’re trying to target users who live in a particular country, select that country. 

Then, click “Location options” and select “Presence: People in or regularly in your targeted locations.” Like this:

By default, Google will show your ads to people who are also just interested in the country. But this isn’t always a good option. Like for a French furniture brand that doesn’t ship internationally. 

Then, select the languages your customers speak:

If you click “More settings,” you’ll find a few more options. 

Some key things here are the start and end dates. 

Decide when you’d like your campaign to start and finish. If it’s an always-on campaign, you can just leave the end date as “not set.” 

Enter Your Keywords and Upload Your Ad Assets

Next, you’ll come to a section called “Keywords and ads.” It looks like this:

You’ll want to name your ad group to reflect what you’re focusing on. Click the pencil icon next to “Ad group 1.” And change the name to something memorable. 

Next, enter the keywords for that ad group. Google offers you a few ways to find keywords. 

You can then enter the product page where it says “Enter a URL to scan for keywords.” Or, you can type keyword ideas where it says “Enter products or services to advertise.”

It’s best to research your keywords and group them before you start the Google Ads setup. This gives you more time to find the best keywords and decide on a structure. 

To find the best keywords for your campaign, you can use Keyword Magic Tool. 

Type in a seed keyword (a broad keyword related to your business or product). Like “puppy food.” 

And click “Search.”

You’ll see a bunch of keyword ideas like “best puppy food” and “food for puppies.” 

You can see the average cost-per-click for each keyword. And at the top, you can toggle between “Broad Match,” “Phase Match,” and “Exact Match.”

Select the keywords you want to use, click the “+ Add to keyword list” button, and name your list.

If you have a lot of keywords, it’s a good idea to split them into groups. These are called clusters. 

Click on the name of your list to open it. Then, click “Cluster this list.” 

And the tool will split your keywords into clusters for you:

For example, all the keywords related to puppy food for large breeds are split into one cluster:

Then, copy and paste the keyword clusters into Google Ads. 

A common structure is to use one cluster per ad group. You may also want to split your ad groups based on a common theme, like products you offer.

Create Your Ads

Next, scroll down to the “Ads” section in Google Ads. This is where you can create your ads, exactly as you want them to be shown.

Where it says “Final URL,” enter the URL of the page you want to drive traffic to. 

Under “Display path,” indicate how you want the link to be displayed. 

For example, if you want the link to be clothesbrand.com/jeans you would enter “jeans.” If you leave it blank, it will be the same as your domain (clothesbrand.com). 

Then, you need to actually write your ads. Create some catchy headlines and up to four descriptions so Google can show different versions and see which performs best. 

Be mindful of the character limits. You can check the preview on the right-hand side to ensure your ads look how you intended. 

When you’re done, click “Next.”

Set Your Budget

Now, it’s time to set your budget. Decide how much you’d like to spend per day based on the formula we discussed earlier that divides your monthly budget by 30.4. 

Then, enter that number in the box under “Set custom budget.” And click “Next.” 

Review Your Campaign

It’s now time to review your campaign.

Google Ads will show you an overview of the settings you’ve chosen and the ads you created. 

On the right-hand side, Google will show you a Campaign Optimization Score. Which gives you an idea of how well-optimized your ads are. 

Double-check everything, including your campaign settings, keywords, ads, and budget. 

If everything is in order, click “Next.” 

Google will review your campaign and push it live once it’s approved. This can take a few minutes or a couple of hours. 

Pro tip: Use our handy PPC checklist to make sure you didn’t forget anything when setting up your campaigns. 

PPC Marketing Best Practices: Tips for Better Results

Here are some best practices to help you get better results with your PPC campaigns:

Set Up Negative Keywords

Excluding poor-performing keywords can help you spend your budget more effectively.

Let’s say you run a shoe store that only sells adult-sized shoes. And you notice your ads are showing up when people search for “children’s sneakers.” 

You can add the term “children’s sneakers” as a negative keyword to stop your ads from showing up when people search for that term.

Look for terms like these using the Search terms report—it shows which search terms are triggering your ads. 

To do this, open Google Ads. In the “Insights and reports” section, click “Search terms.”

You’ll see key information for each search term, such as impressions, conversions, average cost, and total cost. 

If you spot any irrelevant and/or expensive search terms that aren’t performing well, you can add them as negative keywords. 

To do this, select the search term by ticking the box next to it. And click “Add as negative keyword.”

Try Different Bidding Strategies

Experiment with different bidding strategies to meet your campaign goals and get the highest ROI from your ad spend. 

For example, if your aim is to generate conversions, you can try one of the Smart Bidding strategies to generate as many conversions as possible for your budget.

Optimize Your Ad Copy

Crafting compelling and relevant ad copy will grab users’ attention and encourage clicks. 

Google will automatically try out different combinations of headlines and descriptions. Those that perform best will be displayed the most. 

You can keep updating your ads with fresh copy so Google can keep testing and improving. 

Need some inspiration to get started?

Look at what ad copy your competitors have used with Advertising Research.

Open the tool and enter a competitor’s domain. Then, click “Search.”

You’ll first see the “Positions” report. Which shows which keywords their ads are appearing for.

From here, click the “Ads Copies” tab. 

You’ll now be able to see the exact headlines and descriptions your competitor is using in their Google search ads. And which keywords are triggering them.

Use these examples to start brainstorming ideas for your own copy.

Try Ad Scheduling

Does your data show that your website visitors are more likely to convert at certain times of the day?

Ad scheduling lets you adjust bids (or stop bidding altogether) based on the time of the day. 

You can make this adjustment by clicking the campaigns icon in your account. Next, click the “Audiences, keywords, and content” drop-down menu, and select “Ad schedule.”

Just select the days and times you want:

Why do this?

Because it lets you focus on times when users are more likely to convert. So, a custom ad schedule avoids wasting budget on clicks that aren’t converting.

It’s common to turn ads off overnight, for example.

Use Additional Ad Assets

Ad assets (previously called ad extensions) let you add more information to your ads and occupy more screen real estate. 

A few different types of ad assets include:

• Location assets: These show information about your specific location, hours of operation, etc.
• Lead form assets: These help you generate leads by allowing users to submit their information directly in the ad 
• Sitelink assets (pictured below): These are additional blue links that take users to specific pages on your website

Assets allow you to enhance a standard search ad. And help showcase that your result is the most relevant to a query. Which encourages users to click.

It’s also important to know that a click on an asset costs the same as a click on the main ad.

Use Bid Adjustments

You can use bid adjustments to increase or decrease the maximum CPC based on factors like device type, time of day, and audience. To improve cost-efficiency and help you allocate your budget more effectively.

Let’s say you have a lower conversion rate on mobile devices. 

You could reduce the max CPC that you’re willing to pay for clicks from mobile devices to compensate for the lower conversion rate.

Try a PPC Tool

While you can set up and run ads on the platforms themselves, there are PPC tools out there that can help you plan your PPC campaign and streamline the process. 

Get More Out of Your PPC Campaigns

It’s pretty simple to start running PPC ads. 

But to enhance the effectiveness of your campaigns, you need the right insights. 

Effective tools can help. With Advertising Research, you can identify paid search competitors, explore competitors’ strategies, and more.

To further support your advertising efforts, explore the Advertising Collection in the Semrush App Center. 

Here, you'll find various tools, like the Ads Launch Assistant, which can streamline your ad creation process and help you easily manage successful campaigns.