What Are PPC Campaigns and How Do They Work

In this article you will learn what PPC campaigns are and how they work. We'll introduce you to the benefits, individual components and best practices for successful implementation.

Content

Introduction

How Does PPC Work?

Key Components of PPC Campaigns

Types of PPC Campaigns

Key Metrics to Track

Conclusion

FAQ

Introduction

PPC (Pay-Per-Click) campaigns are now almost an essential tool for companies that want to attract targeted traffic to their websites but more importantly scale their business. But what exactly are PPC campaigns and how do they work?

PPC is an online advertising model in which advertisers pay for each click on an ad.This approach is essentially an alternative to organic traffic acquisition through SEO and can significantly increase the number of visits to your website. In this article, we'll reveal the mechanics of how PPC works, explore all of its components, and provide recommendations for setting up and then optimizing successful PPC campaigns. The goal is for you to get a clear understanding of not only how this model can help your business, but also the best practices that can ensure your campaigns actually work.

How Does PPC Work?

PPC works on a simple but very effective principle: advertisers bid on specific keywords that are relevant to their business, and once the target user searches for those keywords, an ad appears in the search results. 

The Auction Model

PPC is based on the auction model, which is used by platforms such as Google Ads or Microsoft Ads. When a user enters a query into a search engine, an auction takes place which determines what ads are displayed but also in what order. This auction is not just based on the highest bid, but is influenced by several factors:

• Maximum bid: Maximum amount the advertiser is willing to pay per click.
  
  
• Quality Score: The quality and relevance rating of ads, keywords and landing pages has a significant impact on ad impressions. Higher quality scores can lead to lower costs and better positions.
  
  
• Ad Rank: A value that is used to determine the position of your ad. It is calculated based on your bid amount and quality score.

The Role of Keywords

Keywords are the cornerstone of PPC campaigns. Advertisers target keywords that they believe their target audience will use when searching for their products or services. It is also important to mention that keywords should not be selected based on gut feeling alone, but it is almost necessary to use modern online tools such as SE Ranking, Marketing Miner or Google Keyword Planner to find the most relevant keywords. The first two tools mentioned are chargeable, but Google Keyword Planner is directly included in Google Ads, so you can use it for free. However, keep in mind that it will only help you find search queries that users are using on Google, not on Microsoft Ads. 

The Bidding Process

The bidding process involves setting a maximum bid for each keyword. When a user initiates a search, the platform you are advertising on will compare the bids of all advertisers targeting that keyword. This platform will then also determine which ads to display based on the bid amount and quality score.

Example Scenario:

Let's say you are the owner of a project management software solutions company and you decide to run a PPC campaign targeting the keyword "project management software". Here's a simplified example of how the whole process works:

1. User search: A user types the phrase "project management software" into Google, for example. 
   
   
2. Auction: Google Ads will conduct an auction among all advertisers who bid on this keyword. 
   
   
3. Calculating Ad Rank: Google evaluates the maximum bid and quality score of each ad and calculates the ad rank. 
   
   
4. Display Ads: Ads with the highest Ad Rank will be displayed on the search results page. 
   
   
5. Clicks and Cost: If a user clicks on your ad, you pay an amount equal to your bid (or slightly less, depending on the auction dynamics).

Key Components of PPC Campaigns

A successful PPC campaign consists of several important components that work together to attract the right audience and achieve the desired results. Here you will find a detailed description of each of them:

Keywords and Keyword Analysis

The foundation of any PPC campaign is a careful keyword analysis to identify quality keywords that align with your business goals. You can use the tools mentioned above to do this.

Key points:

• Identify primary and secondary keywords
• Use long-tail keywords for more accurate targeting (long search phrases)
• Analyze competitor keywords

Tips for Choosing the Right Keywords:

• Conduct a thorough keyword analysis: use the right tools to identify relevant keywords with high search volume and low competition.
  
  
• Focus on long-tail keywords: These words are more specific and less competitive, often resulting in higher conversion rates.
  
  
• Eliminate irrelevant search queries: Identify and eliminate keywords that are not relevant to your campaign. This will prevent you from wasting your budget on unqualified traffic.

Ad Copy and Creative

Ad copy is the text that appears in ads. It's very important to create compelling and relevant ad copy that gets users to click on your ad. This includes the headline, description and display URL. Creative is the key to grabbing attention and getting clicks.

Key points:

• Emphasize unique selling points (USPs)
• Provide a clear call to action (CTA)
• Use keywords in ad text to boost ad rankings

How to Write Quality Ad copy:

• Highlight unique business benefits (USPs): Clearly communicate what makes your product or service stand out.
  
  
• Provide a clear call to action (CTA): Urge users to take a specific action, such as "Buy Now", "Learn More" or "Sign Up Today".
  
  
• Use keywords in ad text: make sure your ad text contains relevant keywords to improve ad relevance and quality score.

Landing Pages

A landing page is a page that users go to when they click on your ad. A quality landing page is one of the most important factors that play a role in converting clicks into conversions (purchase, registration...). Make sure your landing page is relevant to the ad, delivers value and has a clear CTA.

Key points:

• Relevance to the ad content
• Clear and concise message
• Strong visual elements and design
• Easy to use interface
• Fast loading

How to properly optimize a landing page:

• Pay attention to relevance: Landing page content should correspond with ad text and keywords to provide a seamless experience for users.
  
  
• Make navigation easy: Make it easy for visitors to find the information they need and complete the desired action.
  
  
• Optimize loading speed: Ensure fast site loading to reduce bounce rates and improve user experience.

Ad Groups and Campaigns

Organizing your ads into ad groups and campaigns helps you manage and optimize your PPC efforts. Each campaign can have multiple ad reports, each targeting a specific set of keywords. This structure allows for better budget allocation and performance tracking.

Example of a campaign structure:

Campaign: Project Management Software

• Ad Group 1: Project Management Software
  • Keywords: project management software, best project management software
  • Ads: Ad 1, Ad 2
    
    
• Ad Group 2: Team collaboration tools
  • Keywords: team collaboration tools, best team collaboration tools
  • Ads: Ad 1, Ad 2

Also use ad extensions for better performance:

• Sub-page link extensions: link to other pages on your website to improve ad visibility and click-through rates.
  
  
• Calling extensions: allow users to call your business directly from your ad, which is useful for mobile users.
  
  
• Location Extensions: display your business address and improve local search performance.
  
  
• Structured Snippet Extensions: Highlight specific aspects of your products or services, such as "Free Shipping" or "24/7 Customer Support."

Quality Score

Quality Score is a metric used by Google to evaluate the relevance and quality of keywords, ads and landing pages. Higher quality scores can lead to lower cost-per-click and better ad positions.

Key points:

• Click-through rate (CTR)
• Relevance of each keyword to its ad set
• Quality and relevance of ad text
• Quality and relevance of the landing page

How to achieve the highest possible quality score:

• Track key metrics: monitor your click-through rate (CTR), cost-per-click (CPC), conversion rate, and return on ad spend (ROAS).
  
  
• A/B testing: Continuously test different ad text, keywords and landing pages to see what works best.
  
  
• Adjust bids and budgets: Regularly review and adjust bids and budgets based on performance data to maximize ROI.
  
  
• Use automated rules and scripts: Implement automated rules and scripts to manage bids, pause underperforming ads, and optimize campaigns effectively. You can read about one of the scripts in our case study on the Flowboost Labelizer script.

Summary of PPC campaign components

Types of PPC Campaigns

PPC campaigns can be very varied, offering different ways of displaying ads to suit different marketing objectives and target audiences. Here are the most common types of PPC advertising:

Search Ads

Search ads are the most common type of PPC advertising. These ads appear on search engine results pages (SERPs) when users type in specific keywords. Search ads are some of the most effective because they target users who are actively searching for information or solutions related to your products or services.

Key Features:

• Text Ads
• Appear at the top or bottom of the SERP
• Targets specific keywords

Example:

A user enters the phrase "the best project management software". Your ad will appear at the top of the search results.

Display Ads

Display ads appear on websites within the Google Display Network, which includes millions of sites on the internet. These ads can be in the form of text, images or videos and are designed to attract attention and drive traffic to your site.

Key features:

• Visual ads (images or videos).
• They appear on websites, blogs and apps.
• Ideal for brand awareness and retargeting.

Example:

A visual banner ad promoting your new project management software appears on a popular business blog.

Shopping Ads

Shopping ads, also known as Product Listing Ads (PLAs), are used by e-commerce businesses to display their products directly in the search results. These ads include product images, prices, and merchant information, making them highly effective for driving sales.

Key Features:

• Product images and details.
• Appear on SERPs and Google Shopping.
• Ideal for e-commerce businesses.

Example: 

A user searches for "buy running shoes," and your product listings with images and prices appear at the top of the search results.

Video Ads

Video ads appear on platforms like YouTube and across the Google Display Network. These ads can be in-stream (played before or during a video) or discovery ads (appear in search results and related videos).

Key Features:

• Engaging video content.
• Appear on YouTube and partner sites.
• Ideal for storytelling and brand engagement.

Example: 

A video ad introducing your latest project management software features will play before a popular YouTube business tutorial.

Performance Max Campaigns

Performance Max campaigns are a newer type of PPC campaign that allow advertisers to access all of Google's advertising platforms mentioned above in a single campaign. These campaigns use machine learning to optimize performance across multiple channels, including YouTube, Display, Search, Discover, Gmail, and Maps.

Key Features:

• A single campaign across all Google channels
• Uses machine learning for optimization
• Simplifies campaign management

Example:

The only campaign promoting project management software that automatically splits ads across YouTube, search, display and more, optimizing them for best performance and conversions.

Comparison of PPC Ad Types

Key Metrics to Track

• Click-through rate (CTR): The percentage of people who click on an ad after seeing it. A high CTR shows that your ad is relevant and attractive to your target audience.

CTR = (clicks / impressions) * 100

• Cost Per Click (CPC): The amount you pay each time someone clicks on your ad. Managing CPC is essential to staying on budget and ensuring a good return on investment.

CPC = total cost / clicks

• Conversion Rate: The percentage of visitors who take a desired action, such as making a purchase or filling out a form. A higher conversion rate indicates that your landing page and campaign as a whole are effective.

Conversion rate = (conversions / clicks) * 100

• Cost Per Action (CPA): Cost associated with getting a conversion. The key to a successful campaign is to keep the CPA low while maintaining high quality conversions.

CPA = total costconversions

• Return on Ad Spend (ROAS): Measures the revenue earned for every dollar spent on advertising. A high ROAS value indicates a profitable campaign.

ROAS = revenue from ad campaign / total ad spend

Use of performance measurement tools

• Google Analytics: Tracking and analysing traffic, conversions and user behaviour on your website. Set up custom goals and funnels to measure specific actions.
  
  
• Google Ads. Use the platform's integrated reporting tools to get detailed information.
  
  
• Third-party tools: Tools like SEMrush, Ahrefs and Moz provide additional analytics and insights on keyword performance, competitor analysis and overall campaign effectiveness.

Conclusion

Pay-Per-Click (PPC) advertising is a powerful and versatile tool that can significantly improve your digital marketing efforts. It offers a number of benefits, such as instant visibility, high ROI or precise targeting. However, implementing strategic keyword analysis, creating compelling ad copy and optimizing landing pages are essential to maximizing these benefits. In addition, regular monitoring and adjustment of campaigns based on key performance indicators is essential to maintain and improve results.

In conclusion, PPC advertising is an indispensable part of modern marketing strategies and offers the opportunity to reach potential customers at the right time with the right message. Start implementing these insights today to unlock the full potential of your PPC campaigns and drive your business forward.

However, if you're not getting the results you want or simply don't have the time to manage your PPC campaigns, don't hesitate to contact us to arrange a free consultation with our specialists.

FAQ

1. What is PPC?

PPC (Pay-Per-Click) is an online advertising model where advertisers pay each time their ad is clicked.

2. How does PPC work?

Advertisers bid on keywords; ads appear in search results when those keywords are searched for. Advertisers pay for each click.

3. What are the benefits of PPC campaigns?

• Immediate results
• Targeted advertising
• Measurable results
• Cost control
• High return on investment

4. What are the key components of a PPC campaign?

• Keywords
• Ad text
• Landing pages
• Ad Sets and Campaigns
• Quality Score

5. What types of PPC ads are available?

• Search Ads
• Display ads
• Shopping Ads
• Video Ads
• Performance Max

6. How to choose the right keywords for a PPC campaign?

Use tools like Google Keyword Planner. Focus on relevant, valuable and long-tail keywords.

7. How to write effective ad copy?

Emphasize the USP, include a strong CTA and use relevant keywords.

8. What are ad extensions and how can they benefit my PPC campaign?

Ad extensions add additional information and links to improve ad visibility and CTR.

9. How often should I monitor and optimize my PPC campaigns?

Monitor weekly; adjust bids, test ad text, refine keywords and improve landing pages based on performance.