Pay Per Click (PPC) Advertising: Definition & Strategy

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  • 0:06 Quick, Click
  • 0:55 Defining Pay-Per-Click
  • 2:30 Implementing Pay-Per-Click
  • 4:04 Evaluating Your Options
  • 4:52 Lesson Summary
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Lesson Transcript
Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

This lesson will explore the pay-per-click (PPC) model of advertising, in which advertisers pay website owners when their ads are clicked. We'll also discuss ways to implement this strategy in a digital marketing plan.

Quick, Click

You're searching for a new car and have very specific requirements. You want a hybrid vehicle that you can customize its features, including satellite radio and sunroof options. Color, make, and model are less important. You want the best deal with the most choices.

Your first instinct is to jump on your favorite search engine and input the terms 'hybrid,' 'customize,' 'satellite radio,' and 'sunroof,' and to your surprise, the first listing that comes up is a perfect fit. Did your search engine just read your mind? Most likely, no. Instead, you stumbled upon a paid ad specifically worded and designed to appeal to you, the consumer, and your keywords of choice. These ads are part of a unique advertising family called pay-per-click ads.

Defining Pay-Per-Click

In pay-per-click advertising, or PPC as it is sometimes called, ads appear in search engine results alongside natural, non-paid search results. Advertisers pay a fee to the search engine site each time a user clicks on their paid ads.

Ads are sold in an auction format with advertisers and marketers setting a bid for what they're willing to pay per click. Outbid other marketers for your specified search terms, and your ad has a pretty good chance of appearing in the number one slot in the paid ad positions.

For example, if you enter a maximum bid of $5 per click for the search terms 'property tax appeal' and win the bid, you would appear in the number one paid ads slot. You would pay $5 for each person who sees your ad, clicks on it, and arrives at your website.

Pay-per-click advertising has its positives and negatives. On the one hand, pay-per-click ads can generate consumer interest and web traffic to a site almost immediately. Because you spent enough on your bid, prospective customers will see your ad first, increasing the likelihood that they will click through to your site and purchase your product. PPC ads are also easily modified and adjustable in almost real-time with tweaks and changes taking place almost immediately.

And, while pay-per-click advertising can be quite inexpensive, it can also become more expensive if a bidding war starts over certain keywords or if a poorly worded or designed ad generates meaningless clicks from a segment of customers you were not intending to target.

Implementing Pay-Per-Click

If you're new to pay-per-click advertising, start by establishing who you are aiming to reach through a paid ad. Ask yourself: Who is your target market? What keywords is your desired target audience searching for? Are the same keywords readily apparent in the text of your landing page, which is where users will land when they click your ad and arrive at your website? What is your desired outcome for the ad? Is it to make a purchasing decision, download a white paper, or call your office for more details? Whatever the intended outcome, make that clear, both in your ad copy and on your landing page.

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