PPC (pay-per-click) advertising, a name commonly applied to search ads, is a great way to reach prospective buyers when they’re looking for your products or remind customers you’re still around. If you want to own some of the most valuable real estate on the internet that drives traffic, sales, and conversions, you need to understand how PPC advertising works because this type of advertising isn’t free. Instead, PPC ads use a sliding cost structure that penalizes users who don’t know what they’re doing through something called a quality score, which we’ll discuss momentarily. Even if you used search ads in the past, platforms change all the time and mistakes are costly. So how do PPC ads work, and how can you bypass common mistakes that hold you back? Let’s take a look.
Before diving into an explanation of how to avoid PPC advertising’s pitfalls, it’s essential to know how pay-per-click fits in a successful marketing strategy. PPC advertising exists on most search engines, but Google retains the lion’s share of search traffic (over 90% of search occurs on the Google platform), so I mainly focus this discussion on that platform. Most other search engines, due to the dominance of Google, share many commonalities.
PPC advertising offers 2 options; search advertising and display advertising. Search ads appear when a user enters a query using keywords matching those you chose as part of your campaign. When a user clicks on your ad, you incur a fee and I’ll talk about fee structures in a bit. It’s this aspect that gives the PPC advertising (pay-per-click) its name. Search ads contain limited text and links or phone numbers for users to learn more about your advertised products. These ads are very structured and don’t contain images, except for shopping ads, which we’ll talk about separately.
Display ads appear on websites and the website owner collects a small fee each time a user clicks on the ad. Display ads are images with limited amounts of text and links to your desired web page.
In addition to these advertising options, some social platforms, such as Facebook, offer a PPC option for advertising. These ads are also commonly image ads, although you might use video or a carousel of images.
The “pay-per-click” model is effective for time-sensitive campaigns, addressing competitors, and finding new markets, but businesses quickly jump ship after a few marketing mistakes consume their budget without producing the desired outcomes. Trust us, PPC marketing does work; it just takes knowledge and practice to determine how to make these ads work for your niche. Below, you can see the average returns for advertising on various platforms (from 2018, which is the most recent image I could find):
What contributes to the cost of PPC advertising?
Unlike traditional advertising featuring set fees based on positioning, length, subscriber numbers, and other factors, PPC advertising uses a complex formula based on the popularity of your chosen keywords, your quality score, and your bid price (since PPC advertising is based on bids like an auction). The average CPC (cost-per-click) is around $2.59 (although I can get a CPC of around 50 cents for most of my clients unless they’re in one of the high-demand industries like insurance. On social platforms, like Facebook, I can get impressions for a few pennies) and small to mid-sized firms commonly spend anywhere between $300 and $10,000 per month on PPC advertising [source].
Before creating a set of PPC ads, always consider these costs:
- Geographical target location: You can select where you want your ad shown, but some audiences are pricier than others. Advertising in a larger city increases competition, for instance, and commands a higher price.
- Target keywords and industry: Some keywords cost as little as $0.08 per click, while others are $50 per click. Popular keywords are typically pricey. For instance, advertising in one of these niches is the most expensive ad market:
- business services
- bail bonds
- Intended action: Some platforms make clicks more expensive than likes or shares, while impressions are much less expensive than clicks. Facebook commonly makes ads that redirect landing pages more expensive.
In addition, a quality score greatly impacts your CPC on search but not on social media advertising. A website with a good quality score may pay a fraction of the CPC that Google charges for a website with a poor quality score. You can improve your quality score by:
- closely match the keywords used in your ads with the keywords used on the landing page
- posting a higher CTR (click-through-rate) achieved in prior ads or, as time goes on, the CTR you achieve with these ads
- featuring signals of good quality for your website as a whole, such as low bounce rates and longer time on-site stats
- organizing keywords into logical ad groups
Setting up PPC ads
Setting up Google ads is pretty simple but creating the ads is a bit of an art and a science. Plus, the platform continues to change over time. That’s why I tend to update this post every year or so. To help, Google offers free training on how to set up your PPC ads and a few companies offer good resources for learning how to optimize your ads, such as Wordstream (my fav) and Hubspot. You’ll also find some courses out there, such as ones from Coursera.
After you set up an account and linked a credit card to it, you can start using the Ads platform. One of the great changes in recent years is the platform now uses multivariate testing (an soon will add AI). That means you now create a host of keywords (Google offers a keyword planning tool within the platform to help you choose your keywords and advice varies greatly in terms of how many you should include in your campaign), a bunch of headlines (up to 30 characters), some descriptions (up to 90 characters), and sitelinks (more on this later. Instead of doing A/B testing across discrete ads, Google now recombines all these elements and chooses a final version based on how users respond to the ads shown live.
Just like traditional advertising, digital advertising isn’t a one-shot deal. You can’t expect to get results by running an ad a couple of times or once a day. Think of advertising like filling a glass. You don’t see water flowing over the sides until you overfill the glass. It’s the same with advertising, There’s some minimum amount of ad spend you need before you start seeing conversions. The rule of thumb is to dedicate 5-7% of your revenue to advertising.
I advise clients to start with $10-20 a day and then tweak the campaign based on key metrics. Once the client has optimized their results, they should increase their daily spending (focusing on days and hours when their customers are likely online) until they reach the amount they’ve budgeted.
10 ways to improve your PPC advertising campaigns
Effective management of PPC ads is a dance between reducing your CPC and increasing your conversion rate to produce higher returns — we call this ROI for return on investment. If you find your ROI isn’t as high as expected, don’t assume PPC advertising doesn’t work. The problem may be fixable and your ROI will improve once you can fix some simple problems. Try these 10 tactics for improving your advertising ROI.
1. Track results frequently
Start-ups and those new to digital advertising must track their PPC results if they want to understand what users want and how well ads match their needs. Without a tool to track these results, a company stumbles into success accidentally but more likely misses the mark entirely. Businesses can use Shape as a PPC tracking tool to effectively track their PPC campaign results and create better custom ads.
Google offers some analytics as part of its advertising platform (see below) and you can always link your Google Analytics account to your Google Ads account to get richer results. the new analytics platform from Google, GA4, now offers more information from the combination of your website and your Google Ads.
2. Focus on the right keywords
Keywords with a high search volume don’t necessarily produce a high conversion rate for your brand. Highly competitive keywords not only cost more, but your ad likely appears in a worse position, such as on page 2 or 3 of search results, where few users ever look.
Instead, focus on targeted keywords that are specific to your niche because you’ll likely attract interested customers. Long-tail keywords often work best, especially as more users employ voice search through Alexa or another platform.
If you want to learn more about long-tail keywords, check out my post using the link.
3. Use tightly focused keywords
It’s possible to use the right keywords for your projects and still get penalized. Loosely bunched keywords, like “jewel,” “jewelry,” and “jeweler,” are all related, but their broadness and lack of uniqueness can result in low quality scores when used with every project. Rather than using the same keywords repeatedly, create keywords that are specific to your campaign to see improved results.
4. Too many keywords
Using too many keywords can quickly bankrupt your ad campaign but it will also tank your impression share and effectively prevent you from showing up on search engines. Most experts suggest using no more than 20 keywords per ad group. However, there isn’t really a magic number since some campaigns require more; just don’t go over the Google keyword usage limit.
5. Don’t forget about user experience
When users click on your ad, they expect to go to a website that loads quickly and isn’t tricky to navigate. If your landing page takes longer than 5 seconds to load or visitors can’t figure out how to buy or search for products, your bounce rate goes up and your quality score suffers.
Paid search won’t fix a bad landing page, so focus on creating a great user experience to keep visitors engaged with your brand. If you’re paying good money and not getting sales, you’ve missed the entire point of PPC advertising.
- Ask for the sale.
- Provide information in a way that’s easy to consume. By using dropdowns within the page, you allow users to determine which information they want and make it streamlined for those who don’t require a lot of information.
- Connect your mobile and desktop together so users can pick up where they left off as they switch devices. Many users switch devices during a single purchase occasion.
- Filter based on the features important to visitors. When searching for a beach wedding dress, a bride might consider the length, material, and other factors that make it different from a bride planning a formal church wedding.
- Don’t hide costs. If a user gets to the checkout page and the price is different they won’t explore why, they’ll simply abandon their cart.
6. Update ads over time
Maybe your PPC ad worked in the past, but after a few months, you notice it isn’t pulling the numbers it did before. Even experienced account managers struggle to rotate, throw out, or edit previous ad campaigns out of fear new ads won’t match the results of the ads they replace. The solution is to adopt a workflow that includes tweaking ads to get the most out of old but functioning campaigns.
7. Pay attention to your ads
It’s a bad idea to “set it and forget it.” Never wait until the end of a campaign to check your stats because tweaking a campaign is the best way to optimize results. Successful online campaigns are rarely formed by leaving for a month and waiting. Your customer’s likes, dislikes, and spending power change based on the month from trends and available funds, so stay interested in your campaigns after launch.
Also, setting a budget for your campaign doesn’t guarantee that Google stops delivering once you reach that budget. I once had a team working for a client that overshot their budget by a lot because they didn’t check their ads to manually stop them.
8. Optimize your landing page
Newbie PPC advertisers link their ads directly to their website and not a specific page, called a landing page. Think of your landing page as your salesperson. This page must motivate visitors to make a purchase, answer their questions, and lead them easily through the conversion process. See the advice from above on things to consider when creating landing pages.
9. Bid on your brand
Bidding on your brand name allows you to dominate search engines. Search any large brand on Google and see how their name appears as a paid ad on the top of the page before the unpaid website link. Keep your brand name on all your marketing to bring awareness to your business, build a brand reputation, and prevent the competition from stealing your customers.
10. Using extensions
Extensions (called sitelinks in setting up Google Ads) are like superpowers when it comes to PPC advertising. Never seen an extension? Yes, you have. Here’s an example.
Look how much extra space you get and all this extra space attracts a bunch more clicks and you still only pay for each click once. So, extensions are great for creating awareness. BTW, you don’t pay for clicks beyond the first 3, so users can click away without costing you a nickel.
Other types of ads
Shopping ads are a specific type of PPC advertising for companies that sell online. They look like this:
Notice how much information is provided for shoppers online, such as the company, the price, and the rating given by other shoppers to each product. Users can use the arrows to see more products.
Display ads are another type of ad run through the Google Ad platform.
Social media ads are run from the individual social media platforms. For instance, Facebook and Instagram run from the Facebook Ads Manager.
If you want to compare the performance across some of these ad platforms, check out the image below. As you can see, Google Search Ads like the ones we discussed in this post.
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