Pay per click advertising is a form of advertising where the marketers only pay for each ad that gets clicked – thereby meaning they are in fact only paying for each visitor. PPC is in itself an important metric in these campaigns, along with things like CPA and maximum bid. This definition will explain everything you need to know in depth.
Per Per Click describes an advertising model wherein the advertiser pays only when someone clicks on an advert. This form of advertising essentially means that marketers are paying for each visit to their website – usually for only a few cents per visitor. As long as they have a high conversion rate then, it is almost possible to guarantee at least some profit.
While many networks offer PPC, the biggest platforms include:
PPC: Pay Per Click
CTR: Click through rate. This is the percentage of users who click on your advert. Many advertisers mistakenly think that raising their CTR should be the primary goal in order to improve their PPC. However, the truth is that the CTR is considerably less important than how well targeted your audience is.
CPC: This is your ‘cost per click’. This refers to how much you are paying for every click. Knowing this figure is important, as it will allow you to better decide what budget you have to spend on your ads. You will pay a different CPC for each ad, so this number is usually calculated as an average across multiple clicks.
Demographic: Knowing your target demographic is important. This means knowing who you are aiming your ads at and that in turn will allow you to use targeted advertising.
CPA: CPA stands for Cost Per Action. This means the amount you are paying for each time a user completes the action you wish for them to complete. Popular options include signing up to mailing lists, buying products, liking Facebook pages or downloading free apps. Some platforms like Facebook let you opt for a CPA payment method. Others simply allow you to calculate what your CPA is.
Maximum bid: Adverts in a PPC campaign are typically shown on a bid-for basis. This means that if two different adverts are considered suitable for a single advertising space, the advertisers will then enter into a bidding war. That means that the advertiser with the highest maximum bid will win, but only by the lowest amount necessary to win the price war. This is why your CPC varies. However, your maximum bid will determine the most you’re willing to pay per click (per visitor).
Budget: Your ad campaign will have daily, weekly or monthly budgets on top of your CPC. This means that once you have reached that pre-agreed amount, your ads will then stop showing.
PPC is a great way to potentially bring more traffic to your website. With the right PPC campaign, you can get highly targeted visitors to your site for just a few cents per click and you can gather a lot of useful data regarding the kinds of people who visit your site; which keywords lead to the most clicks and/or sales, which regions bring the most traffic etc.
However, if you get your PPC wrong on the other hand, then it is a very quick and effective way to waste a lot of money and become rather disheartened. And this can be perplexing, because in theory it all seems so easy. Just create your advert, choose your keywords and set a budget right?
Well, yes and no… while these are indeed the fundamental aspects of creating a PPC campaign, there is also a lot more to it than that, and a lot of subtle factors that come into play. To demonstrate, let's take a look at just some of the different things that influence your success or otherwise when creating a PPC campaign.
Negative keywords mean keywords that you want to exclude from your PPC. In other words, when someone types in these phrases you are stating that you explicitly don't want your add to show as a result – even if it otherwise would. There are many reasons you might do this, but the most obvious is that you might know for certain that particular searches aren't going to lead to sales or clicks.
For instance, if you are selling a book on fitness, then you might want to put the word 'free' as a negative keyword. That's because the people using that search term will be looking specifically for things they don't have to pay for and will thus be unlikely to be willing to spend money on your book.
Likewise, you might want to include terms like 'Football'. These people will be looking specifically for football workouts most likely, so they're not going to want to spend money on a workout that is more general.
What many PPC campaigns don't take into account is the amount of competition that they are facing up against. This is a big mistake though, as if you are targeting keywords with too much competition, you'll find that each click costs you too much money (PPC works using a 'bidding system') and that your ad only shows occasionally. Thus it becomes less cost effective and you don't get the volume of traffic you need.