How Does Pay Per Click Work?

How Does Pay-Per-Click Work?

Pay-per-click is an essential business strategy. With a thorough understanding of the process, you’ll have a greater chance of a successful campaign!

PPC involves:

1. Advertisers

Advertisers are individuals or businesses that utilize PPC to promote their products and services. 

Every time an internet user clicks on your ad, you are charged by the PPC network.

The amount you pay per click, which can range from less than a dollar to a hundred dollars or more, depends on your target keywords and the level of competition.

The more advertisers compete for a keyword, the higher the cost of the click.

On Google’s search page, there are only limited slots available for ads.

This is why advertisers need to step up to secure a slot – a process known as bidding.

2. PPC Networks

This is the middle man – they display your advertisements on their network.

The most common PPC networks used by advertisers are Google Ads, Facebook Ads, and Bing Ads.

 3. Publishers

Publishers are individuals or companies who partner with the PPC networks to display ads on their website(s). 

Most publishers own several websites where ads are shown. Once a visitor of the website clicks on an ad, the publisher receives a percentage of the revenue.

Just like the amount paid by the advertiser varies, how much the publisher receives also depends on the keyword and its average bid.

When creating campaigns, advertisers are often given the chance to choose between having their ads shown on the network itself or with their partner publishers.

The latter is sometimes preferred as it means you can pay less per click than just advertising on the search engines.

How Bidding Works

Bidding affects the position of your ad and its result.

For every keyword, there are only four ad slots available above the first organic listing.

The average bid for a keyword determines the position of your ad on the search page. 

Remember, bidding for the #1 spot is not always worth paying more, because it is still possible for your campaign to be successful even at #4.

In a lower position, you still get relevant clicks, but for a lesser cost.

What is Quality Score?

Quality score also plays an important role in your cost per click (CPC) and your ad position.

Google rates the quality and relevance of your ads., and this rating is known as quality score.

Whether you will pay a lower or higher CPC depends on your quality score.

What is the Difference Between CPC and PPC?

Although often used interchangeably, PPC and CPC have different meanings.

Pay-per-click (CPC)  is the advertising program you run, while cost per click or CPC is the actual amount you pay per click within the program.

Have more questions about PPC advertising? Reach out to us!