If you are a business owner, it’s likely that paid advertising is a familiar concept to you. Whether you have paid for printed flyers or boosted a post on Facebook, the chances are you have paid for some form of advertising before.
However, there is another dimension to paid advertising that you may not know about, or perhaps you know about it but don’t fully understand it.
This is called pay per click advertising and this article will tell you everything you need to know about it and why you should use it as part of your marketing strategies.
What is Pay Per Click Advertising?
Pay per click, also known as Google Ads, Google Adwords or PPC is a form of internet marketing where advertisers pay a fee every time someone clicks on one of their adverts.
This time-efficient, budget friendly model allows you to put your business in front of potential customers who are already searching for what you while you put time and effort into building your following organically.
Both paid and unpaid marketing strategies are important when it comes to integrated marketing efforts; you should definitely be using both models to market your business.
How Does Pay Per Click Marketing Work?
There are three main principles of pay per click advertising – keywords and phrases, bidding and ad rank.
Each one of these principles plays a key role in the success of the campaign and understanding these roles will ensure you get the most out of your campaign.
Keywords and Phrases
When individuals are searching for something online, they use specific keywords or phrases that, to put it simply, explain to search engines what they are looking for.
Selecting the right keywords for your campaign will ensure that your advert lands in front of your prospects.
Therefore, keyword research is arguably the most important step in the process of setting up a paid campaign. Guessing is not going to get you very far, so make sure to take the time and put in the effort to find which keywords are relevant and are actually being used.
Bidding takes place in an auction; an auction is made up of a group of people who are competing for a product and (you guessed it) the highest bidder wins.
This exact concept applies to the bidding principle of pay per click advertising, except you will be bidding against your industry competitors for the same keywords and the highest bidder doesn’t always win.
Google can be quite picky – well, let’s just say that Google knows what it wants and will seldom deviate.
So, Google assigns each advert an ad rank which is ultimately a metric that is used to determine the order in which the paid ads will be displayed on the search engine results page (SERP).
Your ad rank will play a crucial role in the visibility of your advert; the higher your ad rank, the more likely it will appear at the top of the SERP.
Google determines your ad rank by considering the following:
- The quality of your advert and landing page
- The ad rank thresholds
- Ad extensions and other ad formats
- Your bidding amounts
- Search context:
- The time of search
- The query itself
- User signals such as location and device
- Other adverts and search results displayed on the page
Benefits of Paid Advertising
Qualified Lead Generation
Paid advertising allows you to strategically target consumers who have already expressed interest in your brand (or similar brands).
For this reason, PPC advertising can help you generate more relevant leads and the traffic you drive to your site from these ads is more qualified.
A qualified lead is a consumer who is most likely to turn into a paying customer of yours based on information they have willingly provided.
Pay-per-click marketing strategies have the potential to bring fast traffic to your website and may result in immediate results or return on investment.
This is a useful, complimentary tactic to use alongside your organic SEO strategies which usually take some time before results are visible.
PPC advertising is not a one-way ticket to success but rather a powerful sidekick to your obligatory, ongoing SEO efforts.
Local Traffic and Accessibility
Paid advertising allows you to target potential customers that are in close proximity to your business’ location.
Many people are on the go and will use their mobile devices to search for a business that are nearby. An additional advantage of this is that your paid adverts can include a click to call and click for directions option, making your business super accessible to your prospects.
Local traffic refers to prospects who are in the same area as your business, whether they are living in the area or just passing by.
Pay-Per-Click Marketing is Measurable
What is the point of advertising if you aren’t able to track or measure your efforts? Pay per click marketing offers you the opportunity to measure the success of your campaign.
What can you measure? Everything from the number of clicks on your advert to how many sales were generated from the clicks and how much each click cost you.
Why is this important? You can use this information to fine tune future campaigns, ensuring you get even better results from your efforts.
Without the ability to measure your efforts, you might as well print some flyers and throw them into the wind with the hope that your customers will catch them.
Paid Advertising is Budget Friendly
Yes, sometimes you do have to spend money to make money. But luckily with pay per click marketing, you don’t have to spend much.
In addition, PPC advertising allows you to set a budget cap and the search engines will not spend more than the allocated amount.
This makes it an ideal marketing strategy for small businesses who are working with smaller budgets.
PPC marketing is customisable, allowing you to adjust your campaign and optimise your budget in ways that will boost your return on investment.
Digital Marketing South Africa – Digital Marketing Agency in Cape Town
Pay per click marketing can be a useful tool to support your advertising strategies and efforts. However, to get the most out of your campaigns, it’s important to know and understand what Google and other search engines are looking for.
That’s where we come in. Our digital marketers are skilled enough to know what makes search engines tick and, more importantly, how to create the connection between businesses and consumers.
If you would like to know more about how pay per click marketing can help your business or to chat about our digital marketing services, please feel free to contact us.
If you have all the right elements to get on to the top of the SERPs (search engine results page) but just can’t seem to get there; pay-per-click advertising could supplement your digital marketing strategy just enough to get you ranking.
What is Pay-Per-Click Advertising?
PPC is a prevalent form of paid Search Engine advertising that is based on an auction system. As the business owner, you bid on specific ad positions, keywords and phrases which are relevant to your business. Your ad is rated according to a specific system and placed accordingly.
Pay-per-click advertising includes the following vital elements, among others:
- Identifying and targeting demographics;
- Keyword research and selection;
- Ad writing;
- Configuring group Ad settings;
- SEO copywriting to create content for landing pages;
- Creating call-to-actions (CTAs) and
- Measuring conversions.
If your advert wins first place on the bid; it will be located at the top of the SERP, above even the highest ranking SEO pages. Pay-per-click is a form of supplementary advertising; it cannot be used as a replacement of other marketing tools such as SEO (search engine optimization), but is rather as support for other digital marketing tools.
What is cost-per-click (CPC)?
CPC (cost per click) is used to refer to the actual price one would pay for each click in a pay-per-click (PPC) marketing campaigns.
How is cost-per-click calculated?
The cost-per-click is an average of bids against a series of competitors over a period of time. Therefore, the cost-per-click will always be equal-to or less than your maximum bid.
As a result of Google AdWords’ functioning, your actual cost-per-click is heavily influenced by you and your closest competitor’s ad rank, maximum bid and quality score.
The AdWords cost-per-click formula
Competitor Ad Rank + .01 = Actual CPC (cost-per-click)
Your Quality Score
What is the average cost per click?
The levels of CPC vary depending on the type of business and industry; however, the average CPC across industries is around $2.
Google AdWords has some remarkable data concerning the average cost-per-click across 20 common industries. It’s always a great idea to cross-reference this average with your average cost-per-click.
If your cost-per-click is much higher than these set-out benchmarks, it is likely that you are paying too much.
Why is CPC important in Search Engine Advertising?
CPC is the value that determines the financial success of your paid search campaigns (as well as how much AdWords will cost you). CPC is determined by several factors which include:
- Your maximum bid;
- Your Quality Score; and
- The Ad rank of the other advertisers who are in competition (bidding) for the same keyword.
Your ROI (return on investment), whether over- or under-paid for each click is determined by how much you pay for each click; and by the kind of quality traffic you receive for such an investment.
It’s important to think of cost-per-click in terms of cost and value; as the overall ROI (return on investment) of the campaign is determined by the amount paid for clicks and the quality of traffic they attract.
The goal is to identify, target and attract clicks that are both inexpensive and valuable.
Pay-per-click Keyword Research
A PPC campaign is built around keyword research. The most successful PPC campaigns have continuously evolving PPC keyword lists which are frequently redefined.
Keyword research must be performed many times so that your business doesn’t miss out on hundreds, even thousands of low-cost, long-tail, highly valuable and relevant keywords and phrases that could drive traffic to your website.
A successful PPC keywords list should be:
The keywords you bid on should be closely related to the services and products you offer. You want to find keywords that will lead to a higher PPC click-through rate (CTR), low cost per click and increased profits.
Pay-per-click is repetitive, the campaign must constantly be refined and expanded to create an environment that your keyword list can constantly grow with and adapt to.
Keyword research for PPC should include both the most popular and frequently searched terms in a niche category as well as the long-tailed keywords, better known as phrases.
Long-tailed keywords are less common; less expensive due to being less competitive and more specific keywords, which account for the majority of search driven traffic.
How Does Pay-per-click Advertising Work?
In order to explain this, let’s take a look at the most popular PPC platform: Google AdWords.
What is Google AdWords?
All search engines have their own PPC models in order to assist businesses in advertising and, in turn, generate profits of their own.
Google AdWords is the number one PPC advertising system on Earth. It works on the PPC model, where users bid on Ad placement and keywords.
Every time a search is activated, Google checks if there are numerous bids on the same keyword and determines whether there will be an auction. If there are a few, Google triggers an auction.
An Ad auction is an automated process used to determine the validity and relevance of Ads that appear in SERPs. Google determines the winners of the bid by observing two key factors:
- Your Maximum CPC (cost-per-click) bid : the maximum bid you are willing to pay per click and
- Your Quality Score: This metric is used to determine how useful and relevant your Ad will be to users.
AdWords advertisers are placed into pools created from parties competing for the same keywords. Then Google chooses a set of winners that will appear in the prime Ad space at the top of the SERP.
The higher your quality score, the better your chances of placing. The ideal would be a combination of highest cost-per-click (CPC) bid and quality score; this type of Ad would achieve the best position.
Types of pay-per-click advertising
There are numerous ways to create PPC advertisements, including:
- Banner Ads
- Text Ads
- Mobile Ads
- Video and YouTube marketing
The goal of all types of PPC campaigns would be to increase click-through rate (CTR) – the number of times your Ad is clicked on vs. the number of times your Ad was displayed – by optimizing your campaign.
Measuring and managing PPC campaigns
PPC advertising offers immense control over the volume of leads you generate. Campaigns require attention on a daily basis to monitor performance and make necessary adjustments according to statistical results.
This ultimately leads to Conversion Rate Management (CRM) and adds benefit as regular activity is one of the best predictors of account success.
These continuous adjustments in management should include:
- Adding PPC Keywords– Expand your reach by adding relevant keywords to your PPC campaigns.
- Adding Negative Keywords – Reduce wasted spending and improve campaign relevancy by adding non-converting terms as negative keywords.
- Splitting Ad Groups – Improve quality score and click-through rate (CTR) by splitting Ad groups into smaller, more relevant and easy to manage groups. This in turn helps you to create more targeted Ad text and landing pages.
- Review and Discard irrelevant and costly PPC keywords – review under-performing and expensive keywords, and then disable them if necessary.
Improving your pay-per-click campaign
Lower your CPC while maintaining value
How does one lower the price you pay for each click while sustaining or improving the value of visits? There are two parts to this plan-of-action:
An automated system was created by Google that offers discounts to well-managed PPC campaigns with high quality scores.
The average score being 5, if your quality score is over 6 then your PPC campaign could be granted a discount between 16% and 50% in CPC. Conversely, a quality score of 4 or lower results in a 25% to 400% increase in CPC.
Tips to boost your Ads Quality Score:
- Create compelling, relevant Ads to increase click-through rates (CTR).
- Build out Ad groups that are closely related.
- Optimize all Ad text and landing pages that refer to individual search intent.
Expand your reach
Improve the distribution of your budget considerably by discovering new, relevant and valuable keywords. In order to do this, one must constantly go though the process of finding new PPC keywords and searching for advertising opportunities, while simultaneously eliminating irrelevant and overpriced keywords from your campaign.
It may sound strange, but designating negative keywords in your AdWords account can help control your average CPC. How? By filtering out traffic from searchers which are likely to convert.
Also, once you start to add new keywords to your account, remember to eliminate the losers (ineffective and expensive keywords). When you only target keywords which are relevant to your business and perform well, it confirms that:
- Your spending is protected – it’s no use lowering your CPC if you still end up paying (albeit low prices) for irrelevant clicks. Negative keywords tell your PPC campaigns which terms they are NOT to target, therefore only allowing your budget to be spent on relevant terms.
- Your Quality Score is improved – when your keywords are clearly related to your Ad text, offering and landing pages; your click-through rate (CTR) and other quality score factors are positively affected. This results in you acquiring more cost-efficient clicks on search terms which are more likely to convert.
A low cost-per-click (CPC) is the key to a successful pay-per-click PPC campaign as it ultimately translates into cost per conversion.
The benefits of pay-per-click advertising
Pay-per-Click is a very effective form of paid digital advertising that allows you to:
- Pay only when you see results- such as when your Ads are clicked.
- Pay-per-click is the only short-term solution to getting to the top of the SERP (search engine results page) with a low page ranking.
- It allows your business to market products and services to the very people who are searching for them.
- It provides a platform for businesses of all types and sizes to compete semi-equally.
Digital Marketing South Africa
The world of digital and social media marketing is complex and diverse. Furthermore, if you are not using email marketing as a tool to market your business then it is guaranteed that you are missing out on incredible benefits.
Digital Marketing South Africa offers you the opportunity to take your business to the next level. We have a team of digital and social media marketing wizards equipped with all the tools necessary to help you grow your business.
We handle all aspects of online marketing, including:
- Pay Per Click
- Content Creation,
- Content Strategy,
- Search Engine Optimisation (SEO)
- Social Media Marketing (managing and sharing across all social networks)
- Email Marketing
- Marketing Automation
Feel free to contact us for more information about our online marketing services.
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