What is PPC, How it Works, and More (Your Ultimate Guide)

What is PPC, How it Works, and More (Your Ultimate Guide)

Pay-Per-Click (PPC) advertising has become an integral part of online marketing, providing businesses with a powerful tool to reach their target audience and drive relevant traffic to their websites. In this comprehensive guide, we will delve into the intricacies of PPC, exploring what it is, how it works, and the key components that make it a valuable strategy for businesses looking to boost their online presence.

What is Pay-Per-Click (PPC) Advertising?

Pay-Per-Click (PPC) advertising refers to an online advertising model where advertisers pay a fee to publishers/search engines every time their ad is clicked. Essentially, advertisers bid on keywords that are relevant to their business offering and only pay the bid amount when searchers click on their ads.

How PPC Advertising Works

There are three main players in PPC advertising:

  • Advertisers – The businesses/companies that want to promote their products/services and drive traffic to their website. They create ad campaigns, choose keywords, set bids and budgets.
  • Publishers/Search Engines – The online platforms like Google, Bing, Facebook, Instagram etc. that display PPC ads and get paid by advertisers when clicks happen.
  • Searchers – The people searching for products/services using keywords. They see text ads alongside search results and can click on ones relevant to their search query.

The PPC process involves the following key steps:

  • Advertisers research keywords that are relevant to their offerings. This allows ads to show for searches highly related to their business.
  • Advertisers create ads that include these keywords and link to landing pages on their website.
  • Advertisers bid on these keywords based on how much they are willing to pay for a click. Bids can be adjusted to control budget and performance.
  • When searchers enter a keyword search query, text ads with that keyword bid on by advertisers then appear alongside the search results on platforms like Google.
  • If searchers find an ad relevant and click on it, advertisers get charged the amount they bid for that keyword by the search engine. The ad then directs the searcher to a landing page on the advertiser’s website.

So in essence, advertisers pay only when their ad drives a valuable click from a potential customer, rather than just for the ad being displayed.

Why Use PPC Advertising?

There are a few key reasons PPC advertising is an extremely popular online customer acquisition model:

  • Delivers Targeted Traffic – Since advertisers choose specific keywords related to their offering, the searchers who click on their ads are highly targeted potential customers.
  • Measurable ROI – Advertisers can track clicks/conversions from PPC ads and calculate return on investment (ROI). Metrics help refine campaigns for better results.
  • Flexible Budgeting – Spend is controlled by setting daily budgets and maximum bids. Advertisers only pay for clicks received within budget limits.
  • Quick Implementation – PPC campaigns can be set up in a very short time by selecting keywords and creating relevant ads that drive clicks. Results start coming in quickly.

PPC Platforms

While the most common PPC platform is Google Ads, other places online where PPC advertising can be implemented include:

  • Facebook/Instagram – Through Facebook ads manager, businesses can create PPC ads targeted to specific demographics and interests.
  • Microsoft Advertising – Businesses can show PPC ads alongside Bing search engine results and on syndicated partner sites within the Bing Ads editor.
  • Twitter – The Twitter Ads dashboard allows setting up PPC ads to show up in search results and user timelines.
  • Pinterest – PPC ads can be created based on keywords just like search engines for the visually focused Pinterest audience.
  • And more specialized platforms like Reddit, Quora, etc.

PPC Management Best Practices

Managing a successful PPC campaign involves quite a few moving parts. Some key best practices include:

  • Extensive keyword research to build out relevant ad groups and brainstorm effective keywords. Focus should be on specific long-tail variants.
  • Landing page optimization so that users who click ads reach useful pages that convert them into customers.
  • Set bids and budgets for ad groups based on their expected conversion value. Budget caps losses from low-performing areas.
  • Ad testing – Create multiple ad variations for each ad group and A/B test them to find the top performers.
  • Analyze campaign data regularly and use it to guide decisions on budget allocation, bid adjustments etc. Refine targeting based on insights.
  • Track phone/form leads as well as site conversions to better understand cross-channel impact. Attribute assists across channels like PPC.

Proper ongoing optimization and governance is key to continued PPC success.

Pros and Cons of PPC Advertising

Some key advantages and disadvantages of using PPC advertising:


  • Delivers targeted, measurable results
  • Flexible spending control
  • Quick to set up and iterate
  • Can test out new offerings or campaigns with limited risk
  • Competitors bidding on keywords keeps pricing in check


  • Ongoing governance of campaigns is essential
  • Risk of spiraling costs if not managed properly
  • Continuously active – campaigns need constant refinement
  • Competitors can drive up keyword prices significantly over time through bidding wars

While PPC does take effort to manage correctly, the transparency and control for driving targeted results makes it very appealing for customer acquisition.

PPC Campaign Setup Checklist

Setting up an effective PPC campaign involves quite a few steps:

☑ Choose PPC platform
☑ Set campaign objectives – sales, leads etc. ☑ Define target audience
☑ Research buyer keywords
☑ Group keywords into ad groups
☑ Create relevant ad copy and landing pages
☑ Set bids and budgets based on expected conversion value
☑ Establish conversion tracking
☑ Geo-target campaign
☑ Schedule ads
☑ Set up A/B ad testing
☑ Launch campaign

Once the campaign is live, refine and optimize daily based on performance. Expand on areas that work, cut back poor performers.

PPC Reporting Metrics

Key PPC metrics to track for assessing performance include:

  • Click-through-rate (CTR) – Clicks divided by Impressions, helps assess ad relevance
  • Bounce rate – Single page sessions indicate poor landing pages
  • Cost-Per-Click (CPC) – Average cost per click, helps plan budgets
  • Conversion rate – Sales or goal completion from clicks drives ROI
  • Cost-Per-Acquisition (CPA) – Conversion cost to set targets
  • Return-On-Ad-Spend (ROAS) – Revenue generated from ad spend

Setting up tracking for these PPC metrics is crucial to optimize towards campaign targets.

The Importance of Landing Pages

Since PPC ads are all about driving clicks to advertiser websites, having useful landing pages that convince visitors to convert is pivotal. Some key landing page best practices:

  • Simple, uncluttered page design focused on the desired action
  • Clear headline and sub-headline conveying key customer benefits
  • Bulleted list summarizing offering if needed
  • Supporting images/videos showcasing product/service
  • Minimal forms – only essential info required from visitors
  • Clear call-to-action button/s driving conversions

Testing different landing page layouts and content is also important to maximize results from PPC traffic.


So in summary, Pay-Per-Click advertising provides targeted, trackable results that make it very compelling for customer acquisition and lead generation efforts. With the right ongoing optimization, it can deliver great ROI across online platforms. Managing campaigns properly does involve effort but brings transparency on performance and control of spending.

Contact 427 Digital for your PPC advertising needs!