Pay per click refers to advertising where an advertiser only pays when someone clicks on an ad.
Google AdWords is the leading choice of pay per click interface, as it allows advertisers to run ads on Google, Google’s partner network, and any other websites that hope to get revenue from Google to run AdWords’ ads via it’s display network. Google AdWords also offers a cookie based retargeting method. Partner websites receive a portion of the income they generate via Adsense. Adwords targeting includes local, national, and international.
AdWords is Google’s top source of revenue. Gross AdWords revenue for 2015 topped $75 billion USD!
PAY PER CLICK TERMINOLOGY
There are several terms that you must know when considering pay per click advertising:
PPC (Pay Per Click): This is the catch all term that describes any form of advertising where clicks are tracked and the total ad bill is total clicks times cost per click.
CPC (Cost Per Click): This refers to how much money each click costs. It is determined partly by algorithm and partly by bidding. Highest bids usually appear #1 is search engine results.
SERP (Search Engine Results Page): Any time you search Google, the resulting page that you view is called a SERP. Every business wants to be #1 in a SERP.
Banner Ad: Visual ads, usually defined dimensions, that appear on advertisers’ websites. Usually clickable and linked to a landing page.
Landing Page: The page you land on when you click a link or an ad.
Retargeting: If you spend enough time online, you may notice that after checking out some product on some e-commerce website, you suddenly see ads on other websites trying to get you back to that product. This is retargeting. A cookie on your computer tracks where you have been, and advertisers can try to get you back.
Click Through Rate (CTR): Easily explained by this example; If 10 people see an ad, and 1 person clicks, the CTR is 10%. Search engines track CTR and reward advertisers for a higher CTR.
AB Testing: The opportunity to advertise two similar pages equally and compare results.
Squeeze Page: Similar to a landing page, but sometimes can be a one page website intended only for hard lead generation.
Other search engines also offer PPC advertising. Bing and Yahoo round out the top 3 search engines. There are actually many more search engines and because a small piece of such a big pie is significant, there will always be competition. With a small budget, Google AdWords is sufficient. However, with a large budget, there is more opportunity to distribute a small portion of the overall budget into a top 10 search engine list.
Advantages of PPC Advertising
There are several advantages to PPC advertising, and some clear disadvantages. First, we have to compare the ads on the search engines versus the ads on the display network (such as banner ads). The biggest difference is something I call Intent. Let’s say that when you search on Google for a plumber, you see a relevant SERP, and click on an ad. The intent is high because you intended to do exactly what you did. However, if you are an advertiser, you know that not everyone that sees a banner ad for a plumber and clicks because they need a plumber. Therefore, the intent is lower. The visual aspect, however, allows more creative ways of attracting clicks, adding control over the click through rate.
The advantages of PPC Advertising in general include:
- Turn ads on/off very easily
- Monitor and control spending
- Target specific landing pages
- AB testing
- Results can be immediate
The disadvantages of PPC include:
- Can be costly.
- Ads require money to run. No money, no ads.
- Steep learning curve for DIY businesses.
- If a budget is spent without any results, the money is wasted.
- Pay for data. Campaigns are only optimized after clicks happen.
It is important to be entirely aware of the steps to setup and manage a PPC campaign. Fortunately, we are here to help. We can setup your campaign and turn it over to you, or we can manage your campaign on a continuing basis. Contact us with your PPC needs!
