Tarun Gupta

What is Pay-per-Click Advertising? Understanding the Basics

Tarun Gupta | Apr 13th, 2023 | Digital Marketing Resources
PPC advertising

What is PPC advertising?

Pay-per-click (PPC) advertising is a marketing method where advertisers pay for each click their ad receives. This means that businesses are not charged just for displaying or showing their ads, but only when someone clicks on them. The platform where the ad is displayed charges the advertiser a fee for each click. The main platforms where PPC ads can be found are Facebook, LinkedIn, and Google.

PPC ads can bring a lot of traffic to a website or landing page, which advertisers can then try to turn into potential customers. It is a very effective advertising method for converting your target audience into paying customers.

Why PPC advertising is Important for Businesses?

Over the years, advertisers have tuned in to pay-per-click advertising for getting more targeted visitors for their products and services. There are multiple reasons why PPC advertising has become a buzzword for advertisers in recent times.

1. PPC ads bring instant visibility

With PPC ads, you can quickly improve your website’s visibility and generate more traffic from the platforms where these ads are displayed. PPC ads are mostly shown on top of the search results. If someone is searching for a product or service, the first few results displayed are the paid ads. If your ads come on top of the search, you will receive most of the visitors searching for those products online.

To ensure that your ads appear to the users, you should bid on relevant keywords and create a compelling ad copy that converts. If you have just launched your business, you can utilize pay-per-click advertising to make it more visible.

2. PPC Advertising is More Targeted

PPC enables users to reach more people by creating targeted ads. Being an advertiser you can create ad copies that are written for specific demographics, locations, and interests. For instance, if your business sells an exclusive clothing range for women, you can create targeted ads focused on women aged 25-45 who live in a specific geographic area.

With precise targeting, you can ensure that your ads are only shown to those who are most likely to be interested in your product range. It will increase conversion and improve return on investment (ROI).

3. PPC Advertising is Cost-effective

Unlike other advertising methods, PPC advertising offers excellent cost benefits. Since advertisers need to pay only when an ad is clicked, it considerably cuts the ad expenses. Advertisers can easily adjust their ad budget according to the campaign performance and the number of clicks. PPC allows bid management to let advertisers adjust bids and control their advertising costs.

4. PPC Advertising is Measurable

PPC campaigns are fully measurable. Paid advertisers have access to advanced analytics and tools that provide them with detailed insights into the campaign's performance. By using these tools, they can measure important ad metrics such as click-through rates, conversion rates, and cost-per-click. Precise campaign measurement enables advertisers to track their ROI and make data-driven decisions.

For example, if you found that some of your PPC ads have a low click-through rate, it’s an indication that the ad needs an adjustment. Based on those results, you can make changes to the ad copy or target audience to improve the campaign performance.

What is the auction-based model of PPC advertising?

In the auction-based model of pay-per-click advertising, advertisers make a bid on search terms, key phrases, or keywords that they think have the commercial intent. They then create ads based on the bid keywords. These ads are displayed to the users when a user triggers the search for the keywords the advertiser bids. The advertiser then pays the platform a fee each time a user clicks on the ad.

In this advertising model, the advertiser sets a maximum bid amount for each keyword. Search engines then run their algorithm to determine the ads to be displayed and the order in which they will be shown.

Different Types of PPC Ads

Advertisers might use different PPC ads to target their potential customers. Some of the most common PPC ads are the following:

1. Search ads

These ads are also called paid search ads. You can find these ads at the top or bottom of search engine results pages (SERPs). These ads have the label “ads or sponsored content”. Advertisers use search ads to promote their products or services.

When a user searches in a search engine using a keyword, the search engine displays a list of results that are relevant to the search query. On top of these organic searches, paid search ads appear at the top or bottom with a ‘sponsored’ label.

The paid search ads are based on the specific keywords an advertiser bids on. These keywords are relevant to this business, products, or services. These ads are an excellent medium to increase business visibility and gain a new customer base.

2. Display ads

PPC advertising

Such ads are also called banner ads. These ads are mostly found on websites, apps, and major social media platforms such as Facebook, LinkedIn and Instagram. Display ads might contain text, images, videos, or animations. Like search ads, display ads are also meant to capture a user's attention and promote products or services.

Display ads don’t appear on the search engine result pages. Instead, they are shown on websites that are part of an ad network. In this PPC advertising model, advertisers have the opportunity to choose ad networks and audiences.

Being an advertiser, you can choose different types of ad content to be used in the ad. The ads might come in diverse formats such as static images, animated GIFs, videos, and interactive elements.

3. Shopping ads

As the name implies, shopping ads are designed to connect with your potential customers who are searching for similar products or services you’re offering. These ads mostly contain product images, descriptions, and prices to attract potential customers. When a customer runs a search for a particular product on Google or any other search engine, shopping ads appear at the top of search results pages and help buyers quickly find the products they're looking for.

Advertisers use a product feed that lists all the products on sale. Now the retailers upload this feed to advertising platforms and create ads that are relevant to specific search queries. When a shopper runs a query that matches the products in a retailer's feed, these highly targeted shopping ads appear at the top of the search results page.

4. Video ads

PPC advertising

Such ads can be found on websites like YouTube and other similar streaming platforms. These PPC ads are designed to promote products or services to users who are watching videos online. These ads are available with both skippable and non-skippable options and come as pre-roll, mid-roll, or post-roll ads.

Mistakes to avoid in PPC advertising

PPC advertising helps advertisers to attract more targeted traffic and effectively generate leads for their business. However, you must do it correctly for getting the most out of it. Avoid doing the following mistakes while creating a Pay-per-click (PPC) advertising campaign.

1. Working without Clear Campaign goals

You must have a goal to fulfill with your campaign. Before going forward with a campaign, take note of what you want to achieve with the campaign. The goal might be anything including driving traffic to your website, generating leads, or increasing sales. Having a distinct goal will help you customize your campaign and monitor campaign performance.

2. Ads Using irrelevant keywords

Keywords are integral to any PPC campaign. Thus, choose keywords that are relevant to your products and services you’re offering to your customers. Instead of using broad or generic keywords in your ad copies, use specific and less-competitive long-tail keywords.

3. Using a Poor ad copy

The ad copy you create for your campaign must be compelling, to the point, and able enough to grab the customer's attention. You have to ensure that the copy highlights the unique selling proposition of your products and services.

The copy content should convey the benefits of your products or services. While creating the ad copy, test different ad formats such as text ads, image ads, and video ads, to check which ad format works well and which doesn’t.

4. Not testing and optimizing the campaign

Keep testing the ads to find the bottlenecks and fix them for further improvements. You should Track and monitor your campaigns. Adjust your targeting, keywords, and ad copy to improve your campaign performance. You can also create different ad versions to find which version delivers the best results.


PPC advertising is the proven method to drive targeted traffic on your website or app. It can be incredibly helpful in increasing your website’s online visibility. To reach your targeted customers using PPC advertising, it’s important to have a clear understanding of your target audience and goals.

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