Pay per click (PPC) advertising, is also know as cost per click (CPC) which is described by Wikipedia as an internet advertising model used to direct traffic to websites, in which an advertiser pays a publisher (typically a website owner or a network of websites) when the ad is clicked.
In reality, what that long-winded explanation really means is that you can pay money to advertise your services on large search engines (like Google or Bing) for fee based (bidding on keywords) advertising on a per click basis.
Okay, let’s be honest – my explanation isn’t much better. Let’s look at some examples instead.
Let’s say you have a Toronto plumbing business and you want to advertise online for plumbing repair services. You go online, and you open up a Google AdWords account - enter in your credit card information and set up your AdWords campaign.
Since the service you are going focus on is “plumbing repair” you might use keywords such as:
Plumbing repair
Toronto plumber
Emergency plumbing
Keyword targeting is the ‘magic’ in PPC advertising. A successful campaign may end up targeting 20 to 30 keyword variations so….
Spending all your ad campaign on one keyword will result in a poor performing campaign.
As you imagine there may be hundreds of plumbers in the Toronto area so you will be competing with other plumbers to advertise online.
Your keyword options are the following:
Keyword Term Position 1 Position 2 Position 3
Plumbing repair $3.50 $2.75 $1.99
Toronto plumber $19.50 $15.00 $11.25
Emergency plumbing $9.95 $8.25 $5.50
On Google, paid advertising typically appears at the top of the search page and at the bottom with the Google organic search links appearing in the middle. If you don’t know how organic placement works, don’t worry about it for now but check back later to read a future article on this topic.
In our example you decide you want leads ‘at all cost’ so you target position 1 for all three keywords you want to target.
The top of the Google page for search term "Toronto Plumber"
The bottom of the Google page for search term "Toronto Plumber"
You set your campaign up to target the 1st position (typically the higher up the page, the more confidence the consumer has it’s the right choice, so the theory is you receive more clicks for the higher fee)
You set your campaign up to run for 7 days and after 1 week you log back into your interface and you find the following:
Search Term 1: Plumbing repair
1. Ad impressions: 13,815
2. Ad clicks: 985
3. Google Spend: $3,447.50
Search Term 2: Toronto plumber
1. Ad impressions: 9,815
2. Ad clicks: 215
3. Google Spend: $4, 192.50
Search Term 3: Emergency plumbing services
1. Ad impressions: 12,815
2. Ad clicks: 812
3. Google Spend: $8,079.40
Your combined advertising success looks like this:
AdWords Campaign*: “plumbing repair”
1. Ad impressions: 36,445
2. Ad clicks: 2,012
3. Google Spend: $15,719.40!
* It is important to understand that the actual price you pay for bidding for keywords is constantly changing depending on the day of the week, targeted keyword, and even hour of the day. Most of Google is bid-based PPC where advertisers compete against other advertisers by setting the maximum amount they are willing to pay for a given spot on the page.
Aaron Johnston
Google Expert & Marketing Guru
Email: aaronj@gbma.ca
Website: www.gbma.ca
About the Author:Aaron Johnston grew up in rural Ontario and has run multiple companies in varies industries over the years. After attempting to hire “the wrong guys” to try online marketing he decided he could do a better job! After 11 years of online marketing experience he shares his experience with others from Taiwan where he now lives with his two daughters.