What is PPC Advertising and How Paid Search Marketing Works

What is PPC Advertising and How Paid Search Marketing Works

PPC is contextual advertising that can be customized using Google Ads for example. Are you wondering what kind of advertising it is, in what format it is shown to users, how the payment is withdrawn, and how to launch it so as not to waste your budget? We will go over this in detail. We decided to collect everything you need to know about PPC in one article.

PPC Basics. A Detailed Excursion into the World of Contextual Advertising

Let’s start with the basics. What is PPC? PPC is a pay-per-click form of online advertising in which money is taken for clicks to a landing page. You pay exclusively for the targeted action.

This type of advertising is considered the most convenient and powerful tool to drive high-quality traffic to your site in a short period of time. Ads are not shown to random people. They are shown to users with similar searches and interests. These could be your potential customers if you set up your campaign correctly.

The name “contextual advertising” is connected with this fact. It is focused on the user’s past and present searches. It’s displayed within a certain context such as search phrases or the content of a web page. When launching a PPC campaign, the advertiser prescribes certain keywords and sets a number of restrictions on where, when, and under what parameters the ads should be displayed. Contextual advertising can look like a text fragment, graphic banner, animation, or video.

Before we move on to the specifics of setting up contextual advertising, familiarize yourself with the basic definitions, and understand what PPC in marketing is and how it works.

CPC – Cost Per Click

CPC is the cost per click of an ad. Pay per click in marketing is determined based on parameters such as competition in a niche, time of day, user geolocation, season, etc. Although the main factor is the Quality Score of the ad and page. In some cases, the CPC is fixed. We’ll go into more detail on what pay-per-click is when we explain how Google calculates the cost per click.


This is an attention-grabbing graphic banner or ad copy. The more interesting and understandable the creative approach is, the higher the chance that the user will click on the ad to the site and begin to study it without leaving after 10 seconds of viewing.

Quality Score

This is a quality rating from Google. The search engine checks how relevant keywords and advertisements are and then assigns an appropriate rating. This assessment is one of the most important factors that affect CPC. It determines the place where the ad is displayed on the page.

Types of Contextual Advertising

The main definition of PPC is the contextual ad serving model. The ads themselves can be displayed on different sites, not only on the search results pages. It can also be partner sites or social networks. Therefore, contextual advertising is conventionally divided into two types:

1. Search Network Advertising

Ads are shown when a user enters a search term. We see them all the time on Google. It is easy to identify such ads. They are displayed with the “Advertising” mark.

As you can see, PPC search marketing looks as close as possible to organic search results. Depending on the Quality Score parameter, the ad can be displayed in different places on the page, somewhere at the top or closer to the footer.

To customize search advertising, a huge number of key phrases are usually selected. They are sorted by search groups, and an ad is written for each.

2. Advertising on the Display Network

Ads appear on partner sites or social networks. Ads target users who have previously been interested in the topic. They searched for similar searches, visited sites or groups in social networks with certain content.

Sponsored integration is also marked in a special way on partner sites.

Business Insider

Usually, PPC ads look like a teaser banner: some catchy text and a bright picture, sometimes animation. The main purpose of such advertising is to attract the user’s attention. The total fees for teaser ads are usually lower than for search ads.

On social networks such as Facebook, paid integrations can look like this:


A key feature of paid advertising on social networks is that it can be fairly accurately targeted to the target audience. Facebook allows you to specify clear parameters of ads. This helps save your budget significantly and bring more interested users to the landing page.

In addition to the SERP page and the sites listed, Google allows you to display ads on YouTube before or while watching a video. Online store owners can create custom shopping ads so that Google searches for their products if they match a user’s search. Those who want to advertise applications can launch a universal advertising campaign. The advertising campaign option is selected in the Google Ads settings.

Targeting and Retargeting

These two concepts are often used when setting up contextual advertising. Targeting is setting up an advertising campaign for a specific target audience. You can indicate gender, age, geolocation, interests, and other behavioral aspects.

Retargeting is a strategy for returning users who were on your website or landing page but did not take a conversion action. Slightly different advertisements are created for this, the purpose of which is to re-attract potential customers to the site, but so that this time they have already made a purchase or left their data. Read the related article – set up remarketing AdWords.

Bidding PPC Ads

Now you can dive into how pay per click works. When you set up ads through Google Ads, your bid – the cost per ad – will be set in real time for each search.

How does this happen?

There are certain ad slots on the search engine results page. Some of them are in more favorable positions. After a user enters a search on Google, the system conducts an instant auction for all advertisers who have configured ads for these keywords. Search engine robots evaluate the quality of ads, giving a Quality Score, the relevance of the landing page, and the bid amount that the advertiser specified when setting up an advertising campaign. The winner takes the most profitable places. This can be the top lines of the search results. The rest are distributed according to the rating. Thus, the advertiser can influence the place in the search results. To do this, they need to either raise the bid or change the ad.

As we mentioned above, CPC in some cases can be fixed. This happens when advertisers and ad space owners agree on it in advance. At the same time, there may be competition for the best place on the page or the number of impressions if the ad banner is dynamic, not static. When it is not shown constantly, but changes when the page is refreshed to another advertisement.


The success of a PPC campaign is measured by return on investment. For example, if the CPC was $2 and 100 buyers clicked on the ad, which means that they spent $200 in total, then the ad didn’t bring any profit. If there were no conversions at all, then it was unprofitable. In this case, you need to refine the creativity, revise the keywords, and possibly redesign the landing page.

The main goal of PPC marketing is to achieve the lowest cost per click and attract high-quality traffic. We will tell you how to do this further.

Tools for Setting Up a PPC Campaign

To set up a PPC company, the tools of the site where you intend to place advertisements are used.

  • If you want contextual ads to appear on your SERP page, use Google Ads.
  • If you want to customize the display of ads on social media, create an ad account on social media.
  • If you want to place an ad on a partner site, contact its owner.

The most difficult thing is to set up ads in Google Ads, as there are many nuances, requirements, and parameters to consider. However, a huge plus is that on this site you can set up different types of campaigns: contextual ads of various formats, videos, shopping campaigns, etc. There are also special advanced settings here. You can specify the price, address, phone number, detailed structured description, seasonal promotions.

How to Set Up a PPC Campaign in Google Ads and Not Lose Money

Since setting up a PPC campaign in Google Ads is quite difficult, we will write out a detailed manual on what you need to consider in order not to waste your advertising budget. For convenience, let’s divide this section into three blocks: preparation, launch, and campaign optimization.

Preparing to Launch a PPC Campaign on Google Ads

What you need to do before starting.

  1. At the first stage, determine the portrait of the target audience: gender, age, geolocation, interests, and what niche they work in. You need to clearly understand what and to whom you will offer, and what trigger will make your potential client click on the ad.
  2. Analyze your competitors’ ad campaigns. Enter a search and see which ads are at the top and in the less profitable positions. What will help your ad get a better Quality Score?
  3. Write down keywords and divide them into groups of searches for each individual product. Remember the rule. There are as many products as there are ad groups with their own keys. This way you can easily manage your campaign.
  4. Create ads for each group of requests. How you can personalize them based on the needs of your users. Consider the triggers that you thought of in the first paragraph.
  5. Create and scrupulously analyze a landing page. How much it meets the UI-UX requirements, whether it leads the customer through the funnel to the target action, is the button visible for the target action, whether the page loads quickly and how it is displayed on mobile devices. If you are advertising multiple products, create the same number of landing pages. It is considered a good practice to create landing pages and ads in the same style so that the user understands that they have come to the right place. If the ad contains information about the discount, it should be in a prominent place on the page.
  6. Check your Google Analytics settings. It’s important to track all conversions.
  7. Don’t forget to create ads not only for new users but also for returning those who have already been on your site. This comes in handy when retargeting.

What do you need to know about keywords?

Their selection for setting up contextual advertising will take the most time. However, the success of a PPC campaign depends on the accuracy of the key phrases that Google searches for. When choosing keywords, it is important to consider three factors:

  1. Keywords should describe the searches that users enter when searching for your product.
  2. Consider not only high-frequency but also low-frequency keywords and long-tail keywords. They will significantly reduce the cost per click and bring customers ready to make a purchase to the site.
  3. Expand your keyword list by testing different options. Experienced PPC specialists do this all the time.

What do you need to know about ads?

To create them you will need:

  1. Come up with three titles with no more than 30 characters. The first heading should contain words describing the user’s request. The second and third are data on product benefits, seasonal promotions, discounts, and other trigger bonuses that motivate the user to follow the link. These are qualifier headers and may not always be displayed.
  2. Write a laconic ad text, preferably in two versions. You need to fit all the important information into 90 characters. Don’t forget the keywords.
  3. Make sure your landing page has CNC. Users don’t like to navigate too long URLs.
  4. If your landing page has a separate mobile address, you can also include it in your ad.

Launching a PPC Campaign on Google Ads

The preparatory work has been done, it’s time to launch an advertising campaign. We go to Google Ads and create an account if it has not yet been created. You can create a separate mailbox and link an advertising account to it, or log in through an existing Gmail account.

Ads Google

After logging in, click on New Campaign to launch the ad campaign.

Ads Google

The service will offer to choose the goal that you pursue when creating a campaign. This can be sales, lead generation, traffic increase, product presentation, brand popularization, mobile app promotion, or campaign with no specific purpose. If you hover the mouse over each icon, hints with more detailed descriptions will appear.

Ads Google

We clicked on sales and move on. Now you need to choose the type of contextual advertising. Google is now offering to set up smarter, more vibrant personalized ads that will appear on the Display Network. But for those new to PPC, it’s best not to risk it and choose one of the top four options. As before, on mouseover, Google provides information about each campaign.

Ads Google

Determine what targeted action the user should take after seeing the ad. This could be a visit to a website, a phone call, or an app download. Provide a landing page, or phone number.

You can also install a dedicated tracker to track sales as a conversion action.

Ads Google

These were preliminary settings, now it’s time to set the main parameters of the advertising campaign. You will be taken to a page where you need to write the name of the campaign and choose where the ads will be displayed. In the search or display network, determine the audience for the ads. There are detailed explanations near each item, so if you have prepared in advance and defined a portrait of the target audience, then quickly fill in all the items. Open the windows with advanced settings. There are many important details in hiding.

An important life hack: in one campaign, it is better to choose impressions only in one of the networks such as search or display-media. If you want to have ads in both, set up two different campaigns. Remove the extra checkmark, it has thereby defaulted.

Ads Google

In addition to geolocation and language, you need to choose the interests of the target audience. Thanks to the service prompts, this is quite easy to do. Take time for each item.

Ads Google

Remember that you are the one who specifies the budget that you are willing to spend on displaying your ads every day. By default, Google chooses the maximum bid cost, but you can set the amount you are willing to pay per click on your ad. This will be the limit that the search engine will not go beyond.In this case, your ad may sometimes not be demonstrated or be in a disadvantageous position, but this way you can use your budget more wisely.

Ads Google

Once you have filled in the basic parameters, you can proceed to create ad groups created for specific keywords. Even if you have prepared the keywords in advance, you can see what Google advises you. Perhaps you did not take into account some options. For the best results, one ad group should describe one product.

Ads Google

After choosing your keywords, you can proceed to create advertisements. Google recommends creating at least three ads for each product. The service indicates that the ad will not always be displayed in full, but you can make sure that the user will see the most important part of the ad. Always put keys at the beginning of both headings and text.

Ads Google

In the final review phase, Google will offer to reconcile budget, keywords, and ads. If everything is well, you can launch an advertising campaign by clicking the Publish button.

Another important life hack is to carefully read all the tips of the service and try to fill in all the fields. This will make your advertising more effective and cheaper.

Your ads start running after you provide your billing information and Google verifies the information. This may happen immediately, and sometimes it can take a week. The exact period for checking and processing data is indicated by Google in the account itself. Also, the launch time depends on the ads. The search engine should check them before starting the auction.

You can make sure that ads are shown without leaving your personal account. Click on the Tools icon and select Ad Preview and Diagnosis. You can also check your account statistics there.

Ads Google

Optimizing Your PPC Campaign in Google Ads

After creating an advertising campaign, you need to constantly analyze its effectiveness and manage it correctly. This is what will allow you to use your budget wisely. Google likes regular activity.

What do we have to do?

  1. Expand the list of keywords. Research the search queries for your product or brand.
  2. Add stop words. These are words and phrases that do not bring you conversions. For example, if you’re mowing lawns and Google is showing your ad to someone looking for a barbershop. Stop words help weed out uninterested audiences and increase relevance.
  3. Remove unuseful high-frequency keywords. They are too expensive for the campaign.
  4. Try to split your ad groups a little more. Perhaps a more targeted tactic is exactly what will help increase conversions.
  5. After all the changes, take another look at your landing page. Maybe it needs to be slightly improved, to highlight accents, or to change the CTA altogether. Each ad group needs its own page.

PPC Advantages and Disadvantages

After we have covered what PPC advertising is and how to set it up correctly, you can talk about its advantages and disadvantages.

The main disadvantage of contextual advertising is that it can quickly and ineffectively spend the budget if it is incorrectly configured. What makes a PPC campaign unprofitable?

  1. Wrongly chosen portrait of the target audience: age, geolocation, interests.
  2. The announcement is formulated inaccurately and there are no specifics, important details, or triggers.
  3. Incorrectly grouped keywords and one ad group set up for multiple products.
  4. Not all the fields in the ads are filled in and mistakes were made in other settings.

One disadvantage of a PPC campaign is that it brings traffic to the site only when it is launched. As soon as you stop paying for impressions, your potential customers will stop finding you. 

Fortunately, contextual advertising has much more advantages:

  1. It fits naturally into the SERP results. Google even makes ads look like organic search results. In order not to mislead users, it marks paid ads with a corresponding mark. On the one hand, advertising is not annoying, on the other hand, it can be distinguished.
  2. Advertisements match user requests. This is exactly what the person is looking for, so they are most likely interested in your product and will take the targeted action.
  3. All actions are carried out within a budget that you set yourself. You can choose the daily amount limit, the maximum cost per click, and configure other parameters. For example, to show ads only at lunchtime. Google gives the advertiser almost complete control over the situation. That is why there are so many settings in your personal account.
  4. When the ad is not producing the desired effect, you can optimize it. Google provides analytics so that advertisers can reconfigure problematic PPC campaign parameters.
  5. You can track the behavior of potential customers. By running an advertisement, you will see: from which geolocation and device there were the most visits, what language your users speak, from which channel they switched, at what time of day they visited the site most often, how many minutes they spent on a particular page, where they went further. Experienced PPC specialists evaluate this data to change parameters and increase the effectiveness of PPC advertising.

The main advantage of PPC is that advertising is quickly set up and quickly gives a significant increase in traffic. In some cases, this is very beneficial.

When to Set Up a PPC and When to Focus on SEO

When configured correctly, PPC works great and brings interested customers to the site. This type of ad campaign will not bring organic traffic.  For organic, Invest resources in SEO.

Let’s take a closer look at when to launch a PPC campaign, and in what cases it will not bring the desired result and you need to work on SEO.

Contextual advertising is usually used in such cases:

  1. The need to quickly attract customers to the site and make a profit. Set up retargeting.
  2. Targeting a specific audience. For example, you sell a collectible Rolling Stones and other rock magazines. Target correctly and customers will notice you immediately.
  3. The need to test a new site/design/CTA. Run A/B testing and actively drive traffic with PPC. Get relevant results in a couple of weeks.
  4. Desire to test a niche. Has anyone in the city sold robotic vacuum cleaners before you? With the help of contextual advertising, you can find out if there is a demand for them. This is very convenient so as not to invest in a business that will eventually burn out.
  5. The need to quickly promote your brand. This is useful when no one in the market knows you yet. Even giants such as Amazon and Facebook still use PPC tools to be on the radar.
  6. Reputation damage needs to be fixed. Was your product not so good and was it written about in the media? You can get rid of the negative impression by launching an advertising campaign with your version of what happened.
  7. The new site and Google does not want to index its pages and bring them to the top according to queries, although you paid attention to SEO. PPC can help SEO. Contextual advertising is able to attract the first traffic to the site, and if it is of high quality, Google will quickly recognize the resource as useful for users. This means that you will pass the stage of the imaginary sandbox faster.
  8. The desire for maximum user coverage on all sites from all devices. Customize your ads on Search and Display Networks so no one hides from you.
  9. Want to get mobile traffic. This is where PPC comes in handy. Contextual advertising on mobile devices is displayed at the top position. Smartphone owners rarely go through the pages of search results. They don’t always scroll to the end of the first page.

If you set up your PPC campaign correctly, you will get the first results within 24 hours. Tempting, right?

Sometimes PPC complements SEO and sometimes it wastes budget. There is no need to invest resources in contextual advertising in such cases:

  1. If you have a small budget and need results in the long term. It is better to invest in SEO because there will be no new traffic after you disable PPC. SEO always works.
  2. You are promoting prohibited or dangerous products. It is unnecessary, and Google will ban you for it anyway. You’ll end up wasting your money.

If you need fast conversions, feel free to use PPC.

About author
Eugenia Pasichnyk is a content creator with 10-years’ experience in the profession. Worked as a Project Manager at a Marketing Agency. Has been studying SEO processes for over 5 years. Interested in PR and other promotion methods.