top of page

The Simple Understanding of PPC

Pay-Per-Click can be both simple and confusing at the same time. Many clients understand the idea of PPC but can't grasp just how they are being charged when it comes to PPC Advertisement.

Image of line chart for an artcle about The Simple Understanding of PPC

The up rise of digital marketing has officially taken the lead in how we reach new clients. On average according to our research 65% of page visits come from mobile viewers and many of them use services that require PPC to play. Places like auction websites, search engines, and retail stores. But what exactly is PPC and why should you care.

Lets get to the root issue of simply understanding PPC. PPC stands for Pay-Per-Click. And is only one way of advertising online. Unlike display ads that either stay in one place or charge you for how many people view your ad. PPC charges for every time someone clicks on your ad.

One click = $. How much money depends on more than a few factors. PPC can be a very simple ad or it can be very complex. Depending on what website or platform you use to advertise with. Sounds complicated. Iet's continue.

PPC campaigns usually have a maximum budget you pay per month. But can also be by day, or threshold.

  • For example: your monthly max may be $500. This means no matter how many times someone clicks on your page you will not exceed $500 per month of ad spend.

Click placement and cost is based on auction bid and if your ad is clicked.

  • For example: If someone is searching for "Dog Grooming in San Jose CA". The first spot that shows up won a hidden auction for that space. The highest bidder will have their ad displayed on the top of the list. If that person searching for Dog Grooming does not click on the link. Then the advertiser does not pay the auctioned price. However if the ad is clicked, then the advertiser would pay for the cost.

Next you may wonder. How much is each click then?

The cost of a click is based on the cost of the auction won for the higher spot. The advertiser is bidding usually against thousands if not hundreds of thousands of other advertisers to get a quality top spot to display their ad. The one with the highest bid get the cake.

Some advertising sites like Google allow you to create a more complex approach to managing your PPC campaigns. For example in Google Ads you are allowed to place maximums per bid for auction spots. If you only want to pay a maximum of $10 per auction bid you can do this. However, this can come with a downside if your not clear on what others are bidding, or if your monthly budget is too low.

Google Ads is a perfect example of optimizing your PPC campaign. They offer many ways to ensure your budget goes as far as it can. Criteria they can add to make sure your minimizing wasted ad space are selecting specific keywords that your customers are interested in. Applying negative keywords that try to deter people that are not your customers, and setting geographical areas to make sure only customers in your service area are receiving your ads.

Not all PPC campaigns are the same. Some websites you may advertise on don't offer any auction bid maximums or have limited keywords available to choose from.

Another term to remember is CPC or Cost-Per-Click. We know what Pay-Per-Click is but how much each click cost is called CPC. This is easily calculated by dividing the total amount of your campaign by the total amount of clicks you received.

  • Example: Total Campaign $500/82 Total Clicks = $6.10 per click.

This is an average of CPC and not the exact number of each bid. Some bids are higher or lower than others. But knowing the Average CPC is a good way to determine if the ad campaign is worth while. Giving the advertisement manager quality data to make decision on your current or future campaigns.

PPC ads usually have a Header, text/body, and sometimes an image. But always have a destination to where the prospect will end up once clicked. The destination is usually determined on what type of goal the ad is for. It could be a general awareness ad with a goal of simply spreading the word about your business. Or it could be a hot sale where the destination is a URL directing visitors to a landing page with a promotion on it. Destination links can also be buttons to call direct or fill out a form. All depending on the goal of the campaign.

In all cases PPC is usually not the most economically friendly ad type. And could cost a pretty penny for those just starting out. For more established businesses they could easily spend tens of thousands of dollars on PPC campaigns monthly. For the local small business owner it may be more beneficial to spend your funds on more localized campaigns to reach more targeted audiences. PPC can still benefit the small business owner if the correct method is placed and the goals set are achievable.


bottom of page