Understanding PPC: The Ultimate Handbook on Pay-Per-Click Advertising

Why Is PPC Important?

PPC, or pay-per-click, is a digital marketing strategy where you're charged for each click on your ads. For a glimpse of PPC ads in action, just conduct a quick search on Google or Bing. You'll notice these ads prominently featured at the top of the search results page.

PPC, or pay-per-click, is a digital marketing strategy where you’re charged for each click on your ads. For a glimpse of PPC ads in action, just conduct a quick search on Google or Bing. You’ll notice these ads prominently featured at the top of the search results page.

Notice the listings labeled “Sponsored” at the top? Those are PPC search ads, courtesy of Google Ads, Google’s ad platform.

While PPC is often equated with CPC, there’s a nuanced difference.

Cost per click (CPC) refers to the actual amount paid by an advertiser per click, whereas PPC encompasses the broader realm of pay-per-click marketing.

You can deploy PPC ads across a multitude of platforms, including:

  • Search engines like Google and Bing
  • Social media platforms such as Facebook and Instagram
  • Banner placements on websites
  • Video campaigns on YouTube
  • Marketplaces like Amazon

Why Is PPC Important?

PPC marketing serves as a potent tool for expanding your customer base and advancing your business. It achieves this by enhancing your brand’s visibility among targeted audiences and directing them to strategic landing pages aligned with your business objectives.

Let’s delve into the key aspects that render PPC such a valuable asset:

PPC Ads Allow for Effective Targeting

PPC ads empower you to connect with exceedingly precise audiences through meticulous targeting criteria, ensuring your message resonates with the most relevant individuals while minimizing ad spend wastage.

Targeting options differ across platforms; for instance, Google Search offers distinct options compared to Facebook.

For instance, Google provides a spectrum of targeting capabilities, including demographics, keywords, topics, and beyond:

You can aim ads at users who’ve visited your site or engaged with your brand already. It’s called remarketing or retargeting.

This allows you to remind potential customers about your offerings and encourage them to return and make a purchase.

PPC Ads Drive Fast Results

PPC offers the advantage of generating traffic almost immediately upon launching your campaign, unlike search engine optimization (SEO), which typically requires months to yield results.

SEO strategies can take considerable time to kick in and show measurable outcomes. For example, examining Lululemon’s journey, depicted in the “Organic Traffic” graph within Domain Overview, reveals the gradual trajectory of their SEO efforts before gaining significant traction.

PPC Ads Are Cost-Effective

PPC grants you full control over your budget.

You predetermine both your total expenditure and the amount you’re willing to pay for each click. Moreover, you’re only charged when someone interacts with your ad.

This level of control, coupled with precise targeting capabilities, enhances your likelihood of engaging a pertinent audience at a cost that aligns with your budgetary considerations. We’ll delve deeper into this aspect when we explore bidding strategies.

PPC Is Easy to Measure and Track

PPC marketing offers an abundance of data and analytics compared to traditional marketing methods, simplifying the assessment of ad performance.

Unlike the ambiguity surrounding the reach of a billboard or the readership of a magazine ad, PPC enables precise tracking of ad interactions. From the number of clicks received to subsequent actions taken, such as making a purchase, every engagement is readily traceable.

You can conveniently monitor the metrics of clicks and conversions across various platforms you’re utilizing at any given time:

This data serves as invaluable insights for shaping future campaigns.

By analyzing this information, you can refine and optimize your strategies to achieve improved outcomes.

It’s Easy to Manage & Make Changes

Managing a PPC campaign offers seamless control over crucial elements such as setting and modifying the maximum cost-per-click, budget allocation, and overall strategy adjustments on the go.

This granular level of control empowers you to optimize your campaign efficiently and swiftly adapt as required. For instance, you can increase the budget for successful ads to capitalize on their performance, while pausing or refining underperforming ads to enhance overall campaign effectiveness.

It Helps You Gain (Free) Brand Awareness

Absolutely, PPC not only drives clicks and conversions but also significantly boosts brand visibility.

Even when users don’t actively click on your ads, they’re still exposed to your brand and message. The beauty of PPC lies in the fact that you only incur costs when users do engage with your ad by clicking on it.

This means that numerous individuals may come across your brand, yet you won’t be charged unless they choose to click, making PPC an extremely cost-effective method for enhancing brand exposure.

It Dovetails with SEO

PPC marketing and SEO work hand in hand, synergizing to maximize online visibility. Employing both strategies concurrently enables you to dominate more screen real estate in search engine results, ultimately driving increased traffic and sales.

While SEO concentrates on organic search rankings, PPC supplements it by offering rapid visibility.

To identify your top-performing organic pages, utilize Google Search Console. Simply navigate to the “Performance” section and click on “Search results,” then select “Pages.”

Here, you’ll gain insights into the clicks and impressions garnered by each page of your website, arranged from highest to lowest performance.

If you notice any significant pages that are underperforming in terms of traffic, you can give them a boost by utilizing paid ads.

PPC vs. SEO

SEO and PPC are essential digital marketing channels for driving traffic to your business.

SEO aims to elevate your website’s position in organic search engine results, thereby increasing traffic organically.

On the other hand, PPC encompasses paid search as well as other avenues such as paid social and display advertising.

As an illustration, consider this PPC ad displayed on Facebook:

The primary distinction lies in the payment model:

  • PPC entails paying for each click.
  • SEO, on the other hand, secures clicks from organic search results without direct payment.

Businesses typically achieve optimal outcomes when they integrate SEO and PPC into their marketing strategies. While PPC facilitates swift traffic acquisition from search engines, organic ranking through SEO typically requires more time.

By harmonizing SEO and PPC efforts, businesses can synergistically drive success online.

How Does PPC Advertising Work?

Pay-per-click advertising follows a straightforward process:

  1. Register for an advertising account with Google Ads or your chosen platform.
  2. Define your target audience based on keywords and other demographics.
  3. Set your total budget and the maximum cost-per-click.
  4. Craft compelling ad copy and visuals.
  5. Enter your ad into an auction alongside competitors bidding on similar keywords or criteria.
  6. Await the auction results to determine ad placement.
  7. Pay only when someone clicks on your ad.

While there are various platforms, ad formats, and strategies available, these fundamental principles persist.

How the Google Ads Ad Auction Works

When a user conducts a search, Google initiates an ad auction to determine which ads to display and their order. Ad Rank, a crucial metric, incorporates several factors:

  1. Bid amount: The monetary value you’re willing to invest.
  2. Auction-time ad quality: This includes expected click-through rate, ad relevance, and landing page experience.
  3. Ad Rank thresholds: The minimum price required for ad display.
  4. Auction competitiveness: The intensity of competition in the auction.
  5. Search context: Factors like location, device, time of search, search terms, other ads, and user signals.

Another key concept is Quality Score (QS), rated from 1 to 10 by Google for each ad. It comprises:

  1. Expected click-through rate (CTR): Estimated ad clicks relative to impressions.
  2. Ad relevance: Alignment of the ad with the search query.
  3. Landing page experience: Quality and relevance of the page linked to the ad.

Although Google no longer uses Quality Score directly in its ad auction, its components remain crucial. Monitoring Quality Score ensures optimal ad placements and pricing.

To assess Quality Score, access Google Ads, go to “Audiences, keywords, and content,” then select “Search keywords” for a performance overview.

Navigate to “Columns,” followed by “Modify columns.” Scroll down to locate “Quality score.” Check all Quality Score components, then click “Apply” to confirm the selection.

Upon completion of these steps, all the selected metrics, including the Quality Score assigned by Google to each of your ad keywords, will be displayed in the table for your review.

Key Components of Google PPC Ads

Certainly, let’s delve into the fundamentals of search ad campaigns.

Campaign Budget

You have the flexibility to determine your campaign’s average daily budget according to your spending preferences.

It’s important to note that Google Ads may allocate up to twice your daily budget on certain days, although they won’t exceed your monthly budget.

Google operates on an assumption of 30.4 days per month, which you can leverage to compute your average daily budget from your monthly budget:

To ensure you don’t exceed a monthly budget of $500, set your daily budget to $16.45. This calculation aligns with Google’s assumption of 30.4 days per month.

Cost

The expense of your PPC ads fluctuates depending on the auction’s competitiveness and your ads’ performance. Nonetheless, you retain control over your expenditure.

By setting a maximum CPC (Cost Per Click), you establish the highest sum you’re willing to pay for each click on your ads. Since it’s an auction, you may not necessarily pay the full maximum CPC for each click.

Instead, you’ll only pay the amount required to surpass the Ad Rank threshold, ensuring your ad is displayed, and outbid any competitors below you. Consequently, you might end up paying significantly less than your specified maximum CPC.

Campaign Structure

In your PPC account, organization is key, typically structured into campaigns, ad groups, and keywords, depicted as follows:

Campaigns

Within your PPC account, campaigns are further divided into multiple ad groups.

Typically, you’ll have a limited number of campaigns unless you’re a large global brand. Each campaign is usually centered around specific goals, targeting criteria, ad types, or budget allocation preferences.

For instance, suppose you’re managing ads for a car dealership. In this scenario, you might create distinct campaigns for “used cars” and “new cars” to maintain separate budgets, targeting strategies, and other adjustments.

Ad Groups

Ad groups are comprised of multiple related ads, functioning as specific clusters of ads triggered by keywords.

Think of them as categorized sets of ads that activate based on specific keywords. Within an ad group, you can incorporate multiple keywords, along with their respective match types, to refine targeting and enhance relevance.

Keywords

Keywords are the words or phrases that hold significance for your business. They serve as triggers for displaying your ad when users search for them.

Once you integrate a keyword into your account, you must specify its match type. This selection enables you to regulate which search terms activate your ads.

Keyword Match Types

Google offers several keyword match types for your ads:

  1. Broad match: This type allows your ads to appear on searches related to your keyword, providing the widest reach but the least control. It includes variations like misspellings, synonyms, and related searches. For instance, if you target “vacation Hawaii,” your ads might also show for “vacation planning Hawaii” and “hotels Honolulu,” but not for unrelated terms like “jobs in Hawaii.”
  2. Phrase match: With this match type, your ads can display on searches containing the meaning or implied meaning of your keyword. It offers broader reach than exact match but is more specific than broad match. For example, targeting “vacation Hawaii” could also include “holiday Hawaii,” “vacation Hawaii ideas,” and “summer trip to Hawaii.”
  3. Exact match: Ads are triggered only by searches precisely matching your keyword, providing the highest control but limited reach. For instance, a search for “vacation Hawaii” would trigger an ad specifically for “vacations in Hawaii.”
  4. Negative keywords: By excluding specific keywords, you can prevent your ads from appearing in irrelevant searches, thereby saving budget and targeting relevant traffic effectively.

Ensure you use the correct syntax when entering keywords for each match type:

  • Broad match: keyword
  • Phrase match: “keyword”
  • Exact match: [keyword]

For example, [vacation Hawaii] for exact match, “vacation Hawaii” for phrase match, and vacation Hawaii for broad match.

Bidding Strategies

Google provides a range of bidding strategies tailored to different advertising goals:

For prioritizing conversions, Google offers Smart Bidding strategies powered by AI:

  • Target cost per action (CPA): Allows control over spending for each desired action, such as purchases or sign-ups.
  • Target return on ad spend (ROAS): Sets a profit-maximizing goal for every dollar spent on ads.
  • Maximize conversions: Automatically adjusts bids to encourage specific actions on your website, like purchases or form submissions.
  • Maximize conversion value: Optimizes bids to maximize the value of conversions, focusing on higher-value actions.
  • Enhanced cost per click (ECPC): Automatically adjusts manual bids based on the likelihood of a click leading to a valuable action.

For driving website clicks, consider these bid strategies:

  • Maximize clicks: Sets an average daily budget with Google Ads aiming to drive the most clicks possible within that budget.
  • Manual CPC bidding: Allows manual management of maximum CPC bids, providing flexibility to adjust bids for top-performing ad groups or keywords.

For enhancing brand visibility:

  • CPM (cost-per-mille or cost per thousand impressions): Maximizes visibility by charging based on the number of impressions.

For video campaigns on YouTube or the Google Display Network:

  • CPV (cost-per-view) bidding: Specifically designed for video campaigns, charging based on the number of views.

Experimenting with various bidding strategies can help determine the most effective approach for your advertising goals.

Best Pay-Per-Click Platforms

Numerous PPC platforms exist for online advertising. Here are some of the most recognized ones:

Google Ads

Google Ads holds the title of the largest PPC platform, commanding a hefty market share of 28%.

Google Ads comprises two primary components:

  1. Google Search Network: This includes search ads displayed on Google search results, Google Maps, Google Shopping, and search partners’ websites outside of Google.
  2. Google Display Network: This segment encompasses display ads and videos showcased on YouTube, Gmail, Blogger, as well as on 3 million partner websites and mobile apps.

Meta Ads

Meta, formerly known as Facebook, owns two of the most prominent social media platforms: Facebook and Instagram.

Through Facebook Ads Manager, advertisers can manage PPC campaigns on both Facebook and Instagram.

Meta provides highly precise targeting options based on demographics and interests. This, coupled with its extensive reach, allows brands to access a vast pool of potential customers.

TikTok Ads 

TikTok is a widely used short-form video platform, known for its popularity among younger demographics. Utilizing TikTok Ads can serve as an effective method to connect with this audience, which tends to be highly engaged with the platform.

TikTok Ads provides various advertising options, such as branded hashtags and in-feed ads.

With a user base of 1.7 billion worldwide, the platform is experiencing rapid growth and is particularly favored by Generation Z.

Microsoft Ads

Microsoft Ads provides an opportunity to expand your advertising reach beyond Google. It enables targeting of users on Bing and its network of partner sites.

The Microsoft Search Network drives 38.1% of U.S. desktop searches and facilitates 6.4 billion monthly searches globally. Microsoft Ads asserts that it can connect advertisers with 46 million searchers in the U.S. who may not be reached through Google.

LinkedIn Ads

With LinkedIn Ads, you have the opportunity to reach 900 million users globally on the largest social media platform dedicated to professional networking.

LinkedIn Ads provides advanced targeting options, including parameters like job title, employer, industry, and professional skills. This level of granularity makes it particularly well-suited for B2B marketing efforts.

Types of PPC Ads

When launching a PPC campaign, you’ll encounter a diverse array of ad formats, each contingent on the platform you’re utilizing.

Search Ads

Search ads are prominently displayed on search engine results pages, such as Google, when users seek information.

These ads are triggered when users search for relevant keywords, ensuring that your ads are visible to audiences actively looking for products or services akin to yours.

For instance, a search query like “best puppy food” may yield sponsored results from pet food companies, effectively targeting users seeking such products.

Search ads offer instant visibility, effectively capturing the attention of your desired audience.

Display Ads

Display ads are banner or image-based advertisements showcased across a multitude of websites within the Google Display Network and affiliated partner sites.

These ads have the flexibility to appear at the top, bottom, sides, or anywhere else on a webpage, frequently making appearances on news sites.

Video Ads

Video ads are displayed on websites throughout the internet and on video-centric platforms such as YouTube.

Various types of video ads exist, with one common example being pre-roll ads displayed before the video content that users intend to watch.

How to Create a PPC Campaign with Google Ads

Here are the steps required to set up a PPC campaign, tailored for Google Ads, but applicable to other PPC platforms as well:

Set Up an Account

To start, create a Google Ads account. It’s free. Simply provide your email address and select a password.

Select Your Goal and Campaign Type

The precise steps may vary based on factors such as your location. Typically, you’ll begin by selecting a goal and campaign type. Here’s how:

  1. Open Google Ads and click “Create,” then select “Campaign.”
  2. You’ll be prompted to choose your objective. Google will suggest different channels based on your goals. For example, selecting “Brand awareness and reach” will prompt recommendations for Display and Video.
  3. To explore all available channels, click “Create a campaign without a goal’s guidance.”

After selecting your objective, proceed to choose a campaign type. Options include “Search,” “Display,” “Shopping,” “Video,” “App,” and more.

For instance, if you intend to run a campaign on Google search, click “Search” and then “Continue.”

You have the option to select the desired outcomes for your campaign, such as website visits, but it’s not mandatory. Google offers additional guidance during setup if you choose to do so.

Lastly, name your campaign and click “Continue.”

Proceed by selecting your primary focus. “Clicks” is often a good starting point, particularly for your first campaign.

Choose a Bidding Strategy and Set Your Limit

During the campaign setup, you’ll need to determine your desired cost per click and select a bidding strategy.

As part of the setup process, you can tick the box labeled “Set a maximum cost per click bid limit.”

Alternatively, you can leave it blank and adjust the cost per click limit at the ad group or keyword level at a later stage.

Once completed, click “Next.”

If you’re uncertain about the appropriate cost per click, research average CPCs within your industry and adapt over time according to ROI (return on investment).

Configure Your Campaign Settings and Targeting

You need to choose where your ads will be displayed. 

To show your ads on Google search only, ensure the boxes “Include Google search partners” and “Include Google Display Network” are not checked during campaign setup:

Afterward, scroll down and specify the locations where you want your campaign to run.

If your target audience resides in a specific country, select that country.

Then, click on “Location options” and choose “Presence: People in or regularly in your targeted locations.”

By default, Google will display your ads to individuals interested in the country you’ve selected. However, this may not always be suitable, such as for a French furniture brand that doesn’t ship internationally.

Next, select the languages spoken by your target audience:

Clicking “More settings” reveals additional options.

Key considerations include setting start and end dates for your campaign. Decide when you want your campaign to commence and conclude. For ongoing campaigns, you can leave the end date as “not set.”

Enter Your Keywords and Upload Your Ad Assets

Then, you’ll reach a section titled “Keywords and ads.” It appears like this:

Rename your ad group to reflect its focus by clicking the pencil icon next to “Ad group 1” and changing it to a memorable name.

Next, input the keywords for that ad group. Google provides several methods to find keywords. You can either enter the product page URL to scan for keywords or type in keyword ideas directly.

It’s advisable to conduct keyword research and organize them before initiating the Google Ads setup. This allows ample time to identify the best keywords and establish a structured approach.

To discover optimal keywords for your campaign, utilize the Keyword Magic Tool. Simply input a seed keyword, such as “puppy food,” and click “Search.”

You’ll see a bunch of keyword ideas like “best puppy food” and “food for puppies.” 

You can see the average cost-per-click for each keyword. And at the top, you can toggle between “Broad Match,” “Phase Match,” and “Exact Match.”


Choose the desired keywords and click the “+ Add to keyword list” button. Then, assign a name to your list.

If you possess numerous keywords, it’s advisable to divide them into groups, known as clusters.

Open your list by clicking on its name. Then, select “Cluster this list.”


The tool will automatically categorize your keywords into clusters. For instance, all keywords pertaining to puppy food for large breeds will be grouped into one cluster.

Then, copy and paste the keyword clusters into Google Ads. 

A common structure is to use one cluster per ad group. You may also want to split your ad groups based on a common theme, like products you offer.

Create Your Ads

Navigate to the “Ads” section in Google Ads. Here, you can craft your ads precisely as you wish them to appear.

Input the URL of the page you wish to direct traffic to in the “Final URL” field.

Under “Display path,” specify how you want the link to be displayed.

For instance, if you desire the link to appear as clothesbrand.com/jeans, you would enter “jeans.” Leaving it blank defaults to your domain (clothesbrand.com).

Next, proceed to craft your ads. Develop engaging headlines and up to four descriptions to enable Google to display different versions and gauge their performance.

Pay attention to character limits. Utilize the preview on the right-hand side to verify that your ads appear as intended.

Once completed, click “Next.”

Set Your Budget

Now, it’s time to establish your budget. Determine your daily expenditure by dividing your monthly budget by 30.4, as per the formula discussed earlier.

Enter this figure in the box labeled “Set custom budget” and click “Next.”

Review Your Campaign

Now, it’s time to review your campaign.

Google Ads will provide an overview of the settings you’ve selected and the ads you’ve crafted. On the right-hand side, you’ll see a Campaign Optimization Score, indicating the level of optimization of your ads.

Double-check all aspects, including campaign settings, keywords, ads, and budget.

If everything appears correct, click “Next.”

Google will review your campaign and activate it once approved. This process may take a few minutes or a couple of hours.

PPC Marketing Best Practices: Tips for Better Results

Here are some best practices to enhance the performance of your PPC campaigns

Set Up Negative Keywords

Excluding underperforming keywords can optimize your budget allocation effectively.

For instance, if you operate a shoe store exclusively selling adult-sized shoes and observe your ads appearing for searches like “children’s sneakers,” you can add “children’s sneakers” as a negative keyword to prevent your ads from displaying for this term.

Identify such terms using the Search Terms report, which reveals the search terms triggering your ads.

To access this report, open Google Ads, navigate to the “Insights and reports” section, and click on “Search terms.”

In the Search Terms report, you’ll find crucial details for each search term, including impressions, conversions, average cost, and total cost.

Identify any irrelevant or costly search terms that aren’t yielding satisfactory results. To add them as negative keywords, simply select the search term by ticking the box next to it, and then click “Add as negative keyword.”

Try Different Bidding Strategies

Experimenting with various bidding strategies can help align your campaign goals and maximize ROI from your ad spend.

For instance, if your objective is to drive conversions, consider implementing Smart Bidding strategies. These automated bidding methods leverage machine learning to optimize your bids and maximize conversions within your budget. By utilizing Smart Bidding, you can efficiently allocate your resources and generate the highest possible number of conversions for your campaign.

Optimize Your Ad Copy

Crafting engaging and pertinent ad copy is crucial for capturing users’ attention and prompting clicks.

Google automatically tests different combinations of headlines and descriptions, displaying those that perform best more frequently. Continuously refreshing your ad copy allows Google to continually test and enhance performance.

Looking for inspiration to kickstart your ad copy creation?

Utilize the Advertising Research tool to examine the ad copy utilized by your competitors.

Simply open the tool, input a competitor’s domain, and click “Search” to gather valuable insights.

You’ll initially encounter the “Positions” report, revealing the keywords for which your competitors’ ads are displayed.

To proceed, navigate to the “Ads Copies” tab.

Now, you’ll have access to the precise headlines and descriptions utilized by your competitor in their Google search ads, along with the keywords that trigger them.


Utilize these examples as a springboard for brainstorming ideas to craft your own compelling ad copy.

Try Ad Scheduling

If your data indicates that your website visitors are more inclined to convert during specific times of the day, ad scheduling enables you to adjust bids accordingly or pause bidding altogether during those periods.

To make these adjustments, navigate to the campaigns icon in your account. Then, click the “Audiences, keywords, and content” drop-down menu and choose “Ad schedule.”

Simply select the days and times you wish to target or exclude.

Implementing ad scheduling allows you to concentrate your efforts on times when users are more prone to convert. By customizing your ad schedule, you can avoid allocating budget towards clicks that are unlikely to result in conversions.

For instance, it’s common practice to pause ads overnight when conversion rates typically decline.

Use Additional Ad Assets

Ad assets, formerly known as ad extensions, enable you to enhance your ads by providing additional information and occupying more screen real estate.

Here are a few types of ad assets:

  1. Location assets: Display information about your specific location, such as address and hours of operation.
  2. Lead form assets: Facilitate lead generation by allowing users to submit their information directly within the ad.
  3. Sitelink assets: Additional blue links that direct users to specific pages on your website.

Assets enable you to enrich a standard search ad, emphasizing its relevance to a query and encouraging user clicks.

It’s worth noting that the cost of a click on an asset is the same as that of a click on the main ad.

Use Bid Adjustments

Bid adjustments allow you to modify the maximum cost-per-click (CPC) based on factors such as device type, time of day, and audience, enhancing cost-efficiency and aiding in budget allocation.

For instance, if you observe a lower conversion rate on mobile devices, you can decrease the maximum CPC for clicks originating from mobile devices to offset the lower conversion rate.

Try a PPC Tool

Although you can create and manage ads directly on the platforms, various PPC tools are available to assist you in planning and optimizing your PPC campaigns, streamlining the process for greater efficiency.

Get More Out of Your PPC Campaigns

Starting PPC ads is straightforward, but maximizing campaign effectiveness requires valuable insights.

Effective tools play a crucial role. Utilize Advertising Research to uncover paid search competitors, delve into their strategies, and gain actionable insights.

For further support, explore the Advertising Collection within the Semrush App Center. Here, you’ll discover a range of tools, such as the Ads Launch Assistant, designed to streamline ad creation and facilitate the management of successful campaigns.