What Is PPC Advertising?
Pay-Per-Click (PPC) is that method that digital publishers use to bill their advertising options. Typically, businesses are billed based on the number of times that visitors click on the link of a given advertisement.
There is an alternative method which is called cost per thousand impressions. This billing method is measured by the number of views or impressions, whether the advertisement is clicked or not.
Breaking It Down
PPC is often used when there is a daily budget set by advertisers. When the budget is hit, then the ad is simply removed for the remaining billing period. Cost-Per-Click (CPC), not to be confused with PPC, is the rate at which the advertisement will be billed. It is determined by a formula that divides the market value of an advertisement by the click-through rate (CTR). The result of this formula will be billed to the advertiser by the publisher at the end of a billing cycle.
The value of PPC advertising for publishers is conducive to the market for online advertising by business, so it is no surprise that PPC advertising is a large revenue. Publishers collaborate with third parties and offer search options in return for advertising placement. Google AdWords has become the most popular platform for digital advertising placement.
Google AdWords works with Search Partners and their associated websites for placement in the form of text, images, and videos. Depending on the demand, traffic, and relevance, the advertiser will choose where the advertisement will be located. Because of the various factors that determine demand, CPC bidding can be dynamic and the prices often change quickly.
Clicks on PPC advertisements are often referred to as interactions. Interactions with a PPC advertisement represent the attention that the audience is willing to give after the result of a search query with keywords that match your advertisement. This attention is of high demand with businesses, so it is important to ask questions before creating a PPC campaign.
There are two factors that you should note:
- What kind of attention do you want?
- How much are you willing to pay?
The average CPC usually varies between industries and the size of businesses, so research of your own industry is imperative to determine your budget. Your budget should be set in accordance with a healthy return on investment (ROI) and where you see value in advertising. ROI is best determined by an increase in traffic, lead generation, and the quality of that traffic rather than just an increase in sales.
Maintaining Value After Reducing PPC Budget
Google AdWords has developed an automated system that offers price discounts to PPC campaigns that are well-maintained and measured with high-quality visitor scores. By increasing the ad quality score, you can find yourself reducing advertising dollars without losing interested visitors.
Some best practices to achieve a high ad quality score are:
- Create engaging and relevant content for your visitors
- Use landing pages with valuable information for the visitor
- Build ad groups that have closely related keywords to increase visibility on searches
- Follow industry trends and evaluate the success of keywords over time
- Designate negative keywords to filter and refine traffic from visitors with low conversion