Pay Per Click Advertising Explained

Pay Per Click Advertising Explained – Carl De Lucia

In traditional marketing, something we don’t like to talk about much here at Marketing Wiz, you purchase a space in the newspaper, you pay up front, and then you pray that people will see it. Boring and ineffective, you bet. I wasn’t in marketing at that time, but I’m guessing the method used to measure return on investment (ROI) was to measure sales prior to running the advertisement and post running the advertisement.

Welcome to the world of digital marketing and pay-per-click (PPC). PPC works like this – your advertisement appears only when a web user types in a word or phrase that’s relevant to your product or service. So, you target who sees your advertisement. You can also edit your advertisement, at any time, to tailor it to your target market’s needs , you can track who’s clicking it and see if it’s leading to a sale or not. But, here’s the real highlight of PPC, if nobody clicks your advertisement, you don’t pay a cent!

PPC originated in 1998 by a website that was eventually purchased by Yahoo. Today, Google dominates the PPC market with Google AdWords which was introduced in 2002. Google AdWords represents about 80% of the PPC market today. Why? Because Google is the dominant search engine. Google’s system is a little different than its competitors. Just because you pay more than anybody, doesn’t guarantee you the top spot in the search rankings, or the top advertising spot. Google uses an algorithm that assesses how relevant your advertisement is to the searcher. The result of this is that the more relevant advertisements will appear higher up (benefits the searcher) and well-written quality content beats out quality content that just pays more in an effort to take the top spot. So basically, Google AdWords works the same way Google Search does.

Google AdWords offers a very sophisticated set of tools and reports that help you manage your campaign. Each campaign is created from one or more Ad Groups, each of which is created from one or more PPC ads triggered by a specific set of keywords and phrases. The advertisements can be displayed in three places: the search results, within the search results of Google’s partners, and other Google entities such as Google Maps. The Content Network consists of websites signed up to Google’s AdSense program. Your advertisements can be shown in the Content Network, but they’ll function more like traditional “interruption advertisements”, because the user is probably browsing, rather than ready to actually purchase something.


I wrote an article about the importance of Keywords. Keywords are extremely important, if they’re too vague you won’t reach your target audience, and if they are too popular, you’ll fall to the back of the listing behind bigger companies.  Once you’ve selected your keywords, you place them into different groups for each. This becomes what Google calls Ad Groups. You’ll create different advertisements for different Ad Groups. Each advertisement will be shown based on what keywords the user is searching for. The primary benefit of this is that you can compare the different keywords and see which is working the best for you. Are you wasting any money with useless keywords and advertisements? You’ll know by looking at the results.  Focus on the click-through-rate (CTR), the percentage of viewers who click on the advertisement.  Keep track of the keywords, keep the ones that are attracting clicks, and ditch the others. When you start your campaign, you’ll want to pay attention to every detail, but once you’re campaign is off and consistently attracting clicks, you can focus on other aspects of sales.

If this sounds too complicated or time consuming, think about outsourcing your AdWords management. Situations in which outsourcing is ideal are if you simply don’t have the time to properly manage your AdWords campaign to the best of your ability and if you don’t feel like monitoring your progress on a day-to-day basis. AdWords is an essential component of any business that operates online, neglecting it would be costly to your business.