At its most basic, PPC advertising is an auction-based method of buying digital advertising on a pay-per-click (PPC) basis. Advertisers only pay when someone clicks on (or engages with) an ad rather than paying when an ad impression is served or viewed on the page.
Digital marketing is famously jargon-heavy, and companies often try to coin their own names for products and features. (The terms “remarketing” and “retargeting” refer to the same thing, as just one example.) Cost per click (CPC) is the reporting metric name used by the ad platforms. CPC refers to the bid price an advertiser sets (Max CPC) and the price an advertiser pays (reported in aggregate as Avg. CPC). Impression-based buying is referred to as CPM because ads are bought on a cost-per-thousand basis, and advertisers pay when their ads load on the page.
Common PPC terms
- PPC-Pay-per-click advertising. Advertisers are charged only when a user clicks on or engages with an ad.
- CPC-Cost per click. This is the amount an advertiser pays when a user clicks on or engages with an ad.
- Max CPC-Maximum cost per click. This is the bid an advertiser sets, establishing the maximum amount the advertiser is willing to pay for a click.
- CPM-Stands for cost per thousand. Advertisers pay per thousand impressions. An impression is counted whenever an ad is served.
To some extent, PPC has become shorthand for search advertising because PPC buying was popularized by the search engines. PPC buying has since been embraced by many other types of sites, including Facebook, Amazon, Twitter, Pinterest and more. Advertisers can now buy display, video, social and native ads on a pay-per-click basis.
This guide focuses on the paid search area of PPC, and specifically the text ads that appear on the search results of search engines such as Google, Bing and Yahoo.
Each of the engines has its own self-serve ad-buying platform through which advertisers can set up and buy text ads and image-based shopping ads that appear on its search results pages: Google AdWords, Bing Ads and Yahoo Gemini.
Additionally, in AdWords, advertisers can buy ads on the Google Display Network, which consists of millions of publisher websites and apps, and on YouTube. Yahoo Gemini enables advertisers to buy native ads on Yahoo properties such as the Yahoo home page. Bing Ads facilitates native ad buys on Microsoft properties such as MSN and external sites and apps in the Microsoft Audience Network. This guide addresses the specifics of running Search text ad campaigns.
For the purposes of illustration, this guide largely refers to products, features and processes related specifically to Google AdWords. It’s by far the dominant player in the market and tends to lead the market in developing new tools and features. Bing Ads has many of the same functions, as well as some unique ones, and also supports campaign imports from AdWords. Yahoo Gemini is the least mature of the three ad platforms, having launched in 2014 after Yahoo and Microsoft renegotiated their embattled search advertising deal in which Yahoo search ads were served by Microsoft’s ads platform. There are also engines in international markets that have their own platforms, such as Yandex in Russia, Baidu in China and Naver in South Korea, to name a few.
The AdWords screenshots and instructions in this guide all reference the AdWords interface that Google first introduced in 2016 and made available to all advertisers in the fall of 2017. For a few more months, advertisers will have access to both versions of the interface, and there will likely be references to the “old” version for quite some time. The new interface, which Google refers to as the new AdWords experience, will become the only option by the end of 2018. Switching takes quite a bit of getting used to, so if you are relatively new to PPC or just getting started now, get used to the new version and save yourself from having old interface nostalgia.
Why PPC (search) advertising?
While PPC has become increasingly sophisticated over the years, there remain two basic reasons companies of every size spend billions of dollars every year on search advertising:
- The ability to target ads based on the commercial intent that users signal with their search queries
With tracking, advertisers can see the results of their campaigns in near real time and adjust accordingly.
There are many different targeting methods available in search advertising. Keyword targeting remains the foundation of search advertising: Advertisers bid on keywords that people are likely to use when searching for their product or service. For example, an accountant in Chicago might buy keywords such as “Chicago accountant,” “accounting firm” or “tax accountant.” Audience targeting, however, has become an increasingly prevalent way for search advertisers to target their ads. Advertisers can further refine the targeting by layering location and/or device specifications.
It’s a cliché, but the one constant in PPC is change. The engines are constantly ad running tests and adding features. So don’t be surprised if one day things look a little different than the screenshots shown in this guide. There might be something new to learn, but the fundamentals stay the same.
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